Welcome to the updated Slickdeals redesign beta. Learn more and give us feedback. Or, return to the classic view.

Search in
Forum Thread

The Slickdeals Approach to Negotiating the Price of a New Car (Updated July 22, 2010)

thelnel52 2,440 March 26, 2010 at 01:29 PM
Deal
Score
+74
212,486 Views

Thread Details

car-photo


By: Alex Craig (SD User: thelnel52)

Preface: There have been numerous threads in the past (on this site and on others) that have dealt with the topic of buying a new car. The approach that follows is the author's (who worked as a car salesman for all of a summer) suggestion, based on personal experience, advice from elsewhere on the web, and basic econ theory. We plan to update this article periodically if users have suggestions for improvement. Although it is a work in progress, it has been verified to work and is more effective than what the majority of new car shoppers end up doing. Also, stay tuned, as more "Slickdeals Approach to..." posts are coming, covering other auto topics (selling/buying a used car, financing a car) as well as other general financial topics...

March 26, 2010
Updated July 22, 2010

NOTE: The article originally featured carsdirect.com as the first source for information. A user pointed out that truecar.com actually does a better job- I gave the site a try and found that (1) the prices seem to be lower for a number of different cars and (2) there is much more information, including holdbacks, average prices paid, etc. That's why, in the update, I changed the links. Also, I reached out to TrueCar.com and a representative of the company will be here, in this thread, starting Friday the 23rd of July to answer any questions that you guys might have about TrueCar specifically or car buying in general.

Some people know offhand how many lb-ft. of torque a Mustang GT has and how long the Prius' battery is under warranty. Without even thinking, they know the tissue on a 3-series, what a money factor of .00015 translates to in terms of APR, and when the Hyundai Genesis is due for a redesign. They know how to find if a dealer is close to a volume bonus or if he's struggling to pay his lease, and they know how to figure out how many days a particular car has been on the lot. Armed with this information (and tons more), these people can walk into a dealership, stare into the dealer's soul, and get the absolute best price. If you're one of these people, skip to the end of this post, because it will bore you, but please stay around to answer some questions below.

For the rest of us, the Slickdeals approach to negotiating the price of a car, although not as effective as the soul-reading approach, is beautiful in its simplicity. I worked as a car salesman, and about 95% of the people who bought from me could have done better if they had followed the approach outlined below. The overriding goal is to get the dealers competing with one another for your business; there are only three steps.

1. Find a Starting Point
Once you know the model and the options you desire, go to www.truecar.com, build the car, and SAVE THE PRINTOUT (this will be handy for the rest of the negotiation)

2. Get Them Bidding
Send a message to every dealer of that make within a 100-mile radius (this can be done by going to the brand's website and searching, most of the time there is a "contact us" button) that includes:

a salutation (better if you can find a specific name, but "Fleet Sales Manager" is ok)
the specific model and options you desire,
the date you will purchase the car,
an indication that you are soliciting "bids" for two days
an indication that bids should not include taxes or dmv fees, but should include everything from the dealership (including destination charges, etc.)
the TrueCar price,
your phone number and email address,
your name
(use the letter below as a guide):

Dear Fleet Sales Manager,

I am planning on purchasing a new '10 Ford Edsel EX, with the comfort package. I am indifferent to the color. For the next two days, I am taking bids- please contact me with your price for this car, with these options, inclusive of the all fees except for tax and dmv fees. If you have the lowest bid, I will come in on Monday morning at 11:00 to take delivery. As a starting point, I have a bid from TrueCar of $21,324 on a car with an MSRP of $24,333, including destination charges.

I can be reached at 909.234.5678 or by responding to this email.

Sincerely,

Mr. Slickdeals

3. Declare a Winner
Wait two days- Save emails, and if a dealer calls, be polite, but as direct as possible. Ask "what is your bid and what is the MSRP of that particular car?" and write the numbers down. Next, ask "what is your name and do you have a direct number?"- write that information down, too. Also note the time and date that the call took place.

Once all of the bids are in, hopefully there's one clear winner. If no one could beat TrueCar, then just go with TrueCar dealer. If you end up going with a dealer, email the fleet manager and say "Your offer of x for y with z options was the lowest. Please let me know the VIN and I would like to come in Monday to take delivery". When you come in, make sure to have a copy of this email and his response (or your notes from the phone conversation), just in case there's a "misunderstanding".

Note 1: The 100 mile radius suggestion is applicable if you life in an area that isn't particularly densely populated, such as the central valley of California. If you live in an area with car dealers every five miles, then you can probably reduce that number. If you live in North Dakota, then you might expand it to 250 miles.

Note 2: You can also include more than one make/model with your note. In fact, it's preferable that you do. Just think- if you're buying a 52" LCD tv, you don't just go out looking only at Samsungs. You probably find prices for a Samsung, a Sony, a Panasonic, an LG, and a Vizio. It's tough to tell what the best deal is until you know what the prices are relative to one another.

If you have a better method, or suggestions to make this method better, please post below.

Thank you Andy Newson for the image above

Image: Andy Newson / FreeDigitalPhotos.net

470 Comments

3 4 5 6 7

Sign up for a Slickdeals account to remove this ad.

#61
Great thread!!! Looking to get a 2010 prius. I went through carsdirect.com - but it appears it connected me up with a "Certified Dealer program" That being said the price they gave me was fairly good. I wonder if this was what one would be expecting when you go through carsdirect. Anyone else test out this and see what type of data/info that carsdirect.com provides?

I now need to collect the email address of 5-10 dealerships in my area to send them notes requesting bids.

My only concern, is that I believe I may get a better price if I wait for the 2011 Prius to come out, and/or if I waited until the end of the month to actually look to purchase the car.

Any thoughts?

Thanks
Reply Helpful Comment? 0 0
L7: Teacher
2,440 Reputation
Original Poster
Staff
#62
Quote from ducker View Post :
Great thread!!! Looking to get a 2010 prius. I went through carsdirect.com - but it appears it connected me up with a "Certified Dealer program" That being said the price they gave me was fairly good. I wonder if this was what one would be expecting when you go through carsdirect. Anyone else test out this and see what type of data/info that carsdirect.com provides?

I now need to collect the email address of 5-10 dealerships in my area to send them notes requesting bids.

My only concern, is that I believe I may get a better price if I wait for the 2011 Prius to come out, and/or if I waited until the end of the month to actually look to purchase the car.

Any thoughts?

Thanks
I could be wrong, but I think the Prius just had a redesign. So, waiting for the 2011 might save you a bit of money, but nothing mind-blowing. (just look at the deals that can be had now on a 2010 Sonata) As for waiting until the end of the month, someone else can probably speak more intelligently on that. If you're not in a hurry, it probably wouldn't hurt.
Reply Helpful Comment? 0 0
#63
Quote from thelnel52 View Post :
I could be wrong, but I think the Prius just had a redesign. So, waiting for the 2011 might save you a bit of money, but nothing mind-blowing. (just look at the deals that can be had now on a 2010 Sonata) As for waiting until the end of the month, someone else can probably speak more intelligently on that. If you're not in a hurry, it probably wouldn't hurt.
Na you're dead on correct. the line did have a major overhaul from 2009- 2010. So the 2011 won't be coming out until the fall (some people have written sometime in Sept.)

So any truth that people have seen with even internet prices --- getting a dealer to drop even lower at the end of the month?
Reply Helpful Comment? 0 0
#64
Question: If you're looking for a slick deal, why are you buying a new car? Everyone knows how much the value depreciates once it is driven off the lot.
Reply Helpful Comment? 0 0
Password: ••••••••
1,587 Reputation
#65
Quote from pCarson92 View Post :
Question: If you're looking for a slick deal, why are you buying a new car? Everyone knows how much the value depreciates once it is driven off the lot.
Because there's more to a SD than just the bottom-line price. SlickDeals isn't always about getting the absolute cheapest cost item. You can have a SD on an expensive item.
Reply Helpful Comment? 0 0
#66
Quote from thelnel52 View Post :
You guys have some very good comments. I'll agree that the email approach has the downfall of making you seem like a less sincere buyer, but I'm not really suer what a better approach would be.

As to the comments regarding finding the invoice, my problem with using invoice (or MSRP) is that it's just a piece of a puzzle. If you remember, when the ps2 came out, MSRP was $300 (I think), but you couldn't buy one for less than $500. Cars work the same way. I'm sure that, in the near future, it's going to be a lot easier to get a Camry for invoice -$500 than it was two months ago.
If cars are selling and the economy is good then they manufacture a lot of cars and they have to sell them if their inventory gets to high.
You want to look at the big picture, dealers want to sell and you want to buy. They want to sell at the highest price you want to buy at the lowest price. Their system is what they call track and jack. Get you on the negotiation track and try to jack you into paying as much as they can while still selling you a car.
Invoice does matter, the dealer had to pay some price for that car.
Use your financing, unless the car companies is better.
Use math all the way through the purchase, inventory, price, financing and depreciation for the model, brand so you don't get upside down in your equity and have to wait to buy another car longer than you want to.
Use your head not you emotions.
Cheers!
Reply Helpful Comment? 0 0
#67
Hopefully I can simplify this, I currently work at one of the largest Toyota dealers in the Mid-Atlantic area, and I have been in the retail end of this for close to 30 years. An informed customer will always pay less for an automobile, period. I don’t believe it is necessary to jump thru hoops to get the right information that ensures a great price on the car you choose. Here are my recommendations:
1. Find a large dealer. The larger dealers can work closer to invoice and sometime below invoice, based on their volume
2. Visit the dealer’s web site and find a vehicle that suits your needs. Print out all the options that come with that vehicle. It is important that you use a real vehicle to price out in the next step; this is the way they are being built. If you build your unit from the Edmunds site, you may build something that is not being produced.
3. Visit Edmunds.com and price out that vehicle. Every time I do a price comparison with my invoice and Edmunds pricing, I come within $10-$15 of invoice. After selecting the Year, Make, and Model you will get to the base vehicle‘s price on the Edmunds site, click on the tab that reads “a note about advertising fees”, this is important because Edmunds does not track these fees, they are regional and vary from one part of the country to the next. However, Edmonds does point out that these are real costs (if it appears on the dealers invoice) incurred by the dealer. Next click on “price with option” and build your unit from dealer’s web site printout. Once you have completed this step you will receive 3 prices: MSRP, Invoice, and TMV (true market value). Now you have the dealers invoice. Remember to add Advertising costs to the invoice amount ($400 to $500.00). Ignore the TMV price; you want the invoice price on that car!
4. Call several of the larger dealers in your area and ask for the sales manager, and ask him if he is willing to sell you a vehicle at invoice or close to it. You will find that most large dealers will work with you, especially towards the end of the month when they are trying to hit their factory number. Remember that in many cases you will have a factory rebate, if a dealer is selling you a car at invoice and that car has a $1000.00 rebate, your net cost, at invoice, should be $1000.00 under the original invoice amount.
These simple steps will save you, and a lot of dealer personnel, valuable time, getting bids, working one dealer against the other will get you a great deal also, but with a great deal more effort and time. Most Car Salesmen today are not the stereo typical, and are folks just like you, trying to make a living, support their families and save a dollar or two when they can.

Happy to answer any question privatly or publicly!
Reply Helpful Comment? 0 0

Sign up for a Slickdeals account to remove this ad.

L7: Teacher
2,440 Reputation
Original Poster
Staff
#68
Quote from spknicks View Post :
Hopefully I can simplify this, I currently work at one of the largest Toyota dealers in the Mid-Atlantic area, and I have been in the retail end of this for close to 30 years. An informed customer will always pay less for an automobile, period. I dont believe it is necessary to jump thru hoops to get the right information that ensures a great price on the car you choose. Here are my recommendations:
1. Find a large dealer. The larger dealers can work closer to invoice and sometime below invoice, based on their volume
2. Visit the dealers web site and find a vehicle that suits your needs. Print out all the options that come with that vehicle. It is important that you use a real vehicle to price out in the next step; this is the way they are being built. If you build your unit from the Edmunds site, you may build something that is not being produced.
3. Visit Edmunds.com and price out that vehicle. Every time I do a price comparison with my invoice and Edmunds pricing, I come within $10-$15 of invoice. After selecting the Year, Make, and Model you will get to the base vehicles price on the Edmunds site, click on the tab that reads a note about advertising fees, this is important because Edmunds does not track these fees, they are regional and vary from one part of the country to the next. However, Edmonds does point out that these are real costs (if it appears on the dealers invoice) incurred by the dealer. Next click on price with option and build your unit from dealers web site printout. Once you have completed this step you will receive 3 prices: MSRP, Invoice, and TMV (true market value). Now you have the dealers invoice. Remember to add Advertising costs to the invoice amount ($400 to $500.00). Ignore the TMV price; you want the invoice price on that car!
4. Call several of the larger dealers in your area and ask for the sales manager, and ask him if he is willing to sell you a vehicle at invoice or close to it. You will find that most large dealers will work with you, especially towards the end of the month when they are trying to hit their factory number. Remember that in many cases you will have a factory rebate, if a dealer is selling you a car at invoice and that car has a $1000.00 rebate, your net cost, at invoice, should be $1000.00 under the original invoice amount.
These simple steps will save you, and a lot of dealer personnel, valuable time, getting bids, working one dealer against the other will get you a great deal also, but with a great deal more effort and time. Most Car Salesmen today are not the stereo typical, and are folks just like you, trying to make a living, support their families and save a dollar or two when they can.

I would be happy to help any members with questions you may have (an insiders view point), send a message with your question and I will get back to you.
I appreciate that response- it's informative. Would you mind answering questions publicly?
Reply Helpful Comment? 0 0
#69
I also worked at a dealership and used that knowledge to write up essentially an identical (or close to) method. It doesn't have to be a difficult or time consuming process AT ALL. I'll answer anything that I know the answer to, but spknicks will have more experience to back his opinions for sure.
Reply Helpful Comment? 0 0
#70
If I got down to the lowest price after the Internet tactics, can I still get dealer financing? Some dealer said since they offered the lowest price, I can't get the special 0% financing any more. Is it true? Or I should still fight for it?
Reply Helpful Comment? 0 0
#71
Quote from tootoo View Post :
If I got down to the lowest price after the Internet tactics, can I still get dealer financing? Some dealer said since they offered the lowest price, I can't get the special 0% financing any more. Is it true? Or I should still fight for it?
Often 0% financing is in lieu of a rebate amount. If you take the 0%, you give up the rebate. Typically if you have good credit and can get a low auto rate, you will be better off to take the rebate. Only in circumstances where you otherwise cannot get a great interest rate can the 0% work out in your favor over the full length of the loan, but it is rather rare. I would almost always recommend taking the rebate because the 0% often will only work out in your favor if you keep the car the full length of the loan, which we know often isn't the case, even when it is planned.
Reply Helpful Comment? 0 0
#72
im glad i found this thread! bookmarked

im planning on buying a car but not a serious buyer yet. what should i do if i email the dealerships but don't want any of their offers? just walk away?

some what of a side note: my friend said they negotiated with a dealership and knocked off close to 10k from the msrp price. How much of a discount can i expect from dealerships if i follow the emailing approach? (assuming im a serious buyer.. by then hopefully)
Reply Helpful Comment? 0 0
#73
the amount of discount that can be acquired simply depends on the exact make and model you are looking to purchase

without that info nobody can give you any estimate
Reply Helpful Comment? 0 0
#74
Quote from thelnel52 View Post :
I could be wrong, but I think the Prius just had a redesign. So, waiting for the 2011 might save you a bit of money, but nothing mind-blowing. (just look at the deals that can be had now on a 2010 Sonata) As for waiting until the end of the month, someone else can probably speak more intelligently on that. If you're not in a hurry, it probably wouldn't hurt.
Timing is one thing (probably the only thing, other than the dirty details of financing) this thread has not really addressed. If I am flexible about when to buy a car, when is the best time? One person mentioned that just before New Years was a good time. So that's one idea: end of a year. What about end of a quarter? What about when the next year's model is coming out, especially a redesign? What about at the end of a promotion, or when there are no promotions? Any other factors?

Wanted to get some input because I have an old car ('96 Civic) that my wife is asking me to replace, and our agreed time frame is "sometime next year".

Thanks! Great thread, lots of great info!
Reply Helpful Comment? 0 0

Sign up for a Slickdeals account to remove this ad.

#75
Quote from thomez View Post :
the amount of discount that can be acquired simply depends on the exact make and model you are looking to purchase

without that info nobody can give you any estimate
umm for example, 2010 honda civic sedan EX (starting is around 19k according to the honda website)
Reply Helpful Comment? 0 0
Page 5 of 32
3 4 5 6 7
Join the Conversation
Add a Comment
 
Slickdeals Price Tracker
Saving money just got easier.
Start Tracking Today
Copyright 1999 - 2015. Slickdeals, LLC. All Rights Reserved. Copyright / DMCA Notice  •  Privacy Policy  •  Terms of Service  •  Acceptable Use Policy (Rules)