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

thelnel52 2,541 March 26, 2010 at 02:29 PM
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Last Edited by thelnel52 July 22, 2010 at 12:44 PM
<p style="text-align: center;"><a title="car-photo" href="/blog/wp-content/uploads/2010/03/car-photo.jpg"><img class="attachment wp-att-1232 centered" src="/blog/wp-content/uploads/2010/03/car-photo.thumbnail.jpg" alt="car-photo" width="500" height="332" /></a></p>
By: Alex Craig (SD User: thelnel52)

<em>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...</em>
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<del datetime="2010-07-22T18:35:55+00:00"><strong>March 26, 2010</strong></del>
Updated <strong>July 22, 2010</strong>

<em>NOTE: The article originally featured <a href="http://www.carsdirect.com">carsdirect.com</a> as the first source for information. A user pointed out that <a href="http://www.truecar.com">truecar.com</a> 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.</em>

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.

<strong>1. Find a Starting Point</strong>
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)

<strong>2. Get Them Bidding</strong>
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

<strong>3. Declare a Winner</strong>
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

<a href="http://www.freedigitalphotos.net/images/view_photog.php?photogid=5">Image: Andy Newson / FreeDigitalPhotos.net</a>

494 Comments

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#481
Quote from floete View Post :
I am looking at a Mazda3 Sport, automatic, 2015. Here's what the dealer sent me:

$20,790.00 MSRP
$ 1,000.00 (Mazda Customer Cash)
-$1,009.00 (Dealer Mazda Discount)
$18,781.00 Your Sale Price

TrueCar estimate for the car is 19,216. But since we know that figure is inflated, I'm trying to figure out how to dicker with the dealer for a better price than what he emailed me. $18,340 is the lowest price paid for an M3 as reflected on TrueCar, which is about $340 less than what i've been quoted. And I still don't know if that's the price I should shoot for. Or should I go lower.
Thoughts anyone?

Here's the rest of the pricing:
$ 1,328.60 Sales Tax
$ 199.00 Doc Fee
$ 199.00 Protection Plus
$ 120.00 Reg Fee (we will refund difference if it costs less to register)
$ 24.00 Temporary Plate (if needed)
$ 20.00 Title Prep Fee
$20,671.60 Your Bottom Line

I think the Protection Plus fee is for etching. And, of course, there's the doc fee. I hate to pay for these things. Can I negotiate them down?

If they won't negotiate on those things, I thought I'd try to get em to sell me a few extras at their dealer cost, but I can't find dealer cost for things like all-weather floor mats on the 'net. Can anyone help w that?

Thanks!

btw / i will be paying cash, and i won't be trading in a car.
I would refuse to pay the "Protection Plus," as this is an add-on you don't need to be paying. Other than that, I would send this offer amount to other dealers and tell them they need to beat it or you're going with this dealer.

If you have a local dealer, go to them last and ask if they'll just match the best price and convey the desire to stay local. If yes, go with them. If no, go with your best price. They should be fine with it, as all the work is done and they simply have to locate the car (easy) and prep some papers (also easy).
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#482
I would add that sometimes you can get a $500 military/veteran etc discount added even if its not an advertised perk at the moment. We got this last year at Hyundai and the guy mentioned they can sometimes push them through regardless of date.

Also, have every single important word anyone says written down and signed - we randomly went to look one day at the start of our search and the nice but typically overeager kid said the usual "what will it take" - we said Car X in color Y (impossible to get for some strange reason) and we want it new at XXX (about 4k under, 1500 under any other quote.) 10 mins later he says "done" - we took a card and said call us if you get one, but didn't think he would be able to do it.

2 days later he calls and says he found one. Emailed the paperwork and it said $500 more- he swore up and down that was the # I said (it was an even # so 100% sure) We went back and forth and even did one last search for our color - only one available was a used one 4 hours away that was more than the new lol. That $500 was wiped out due to our military discount but I was still annoyed. It was a stressful shopping around (after an accident with a guy that sped away and we had a rental) and still the best price by far for an impossible color so we bit.

Great purchase and we are happy with it but I still think about that $500...
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#483
Quote from vyahoo View Post :
My approach is similar, but slightly better. Try this method.

1. Go to carquotes.com and pick all the cars you are interested. You will have to pick a financial institution,- pick any credit union. Give your details. You will get a detailed brochure of the car, options, invoice price, ongoing rebates and a pre-negotiated price on the car, and a dealer to go to, whom to contact, etc. It will also give you the rebates, etc. Note the dealer name, price.
If you do not like to hear from the dealer, register for a Google voice phone number. Callers can leave all messages they want on that. You can call them back using the same number...nobody need to know your real number.

2. Go to Zag.com, buy a car, and pick a car, options. This will give you a price on the car without
actually giving your details. Note this price down. Don't give any details here.

3. Go to Edmunds.com and see if there are any 'manufacturer to dealer' incentive on the car. Note that down.

4. Avoid the dealer nearest to your house. Reserve that for the very last.

5. Pick another dealer for test driving the car. This dealer should not be the one from 4, and should not be the one from 1. Test drive the car and mention to the dealer that you did not like it, so that you are never bothered by them.

6. Collect one more reference price from carsdirect.com. Note that down.

7. Now you have 3 reference prices from 1, 2, and 6.

8. Go to cars.com and invite bids via email from different dealers. Avoid dealers from points 1, 4, and 5. You can do 3 dealers at a time. You can repeat the bids for as many dealers as you wish...for as long as you can travel. You will get a bid, if you mention that you are serious about buying and are willing to do business with in the next 5 days. Make sure the bid includes destination charges, and carpet floormats, which the dealer rips you out. Request him to itemize the quote - price, - rebate - dealer cash, + destination charge. Verify the prices and dealer cash info from e-brochure from 1 and information from 3.

9. I would pick dealers couple from two different neighboring states as well. Sometimes rebates are regional... if you pick a different region, you may be eligible for a different set of rebates. That is truely for a MOTIVATED bargain hunter...like me. You can ignore this one if you are not.


10. Pick the lowest of the bids from 8. Compare it with the prices from 1, 2. Subtract 500 from the lowest bid and then invite fresh bids again - stating that this is the lowest bid. Allow the dealers to get back to you with their revised bids. You can continue this process a couple of times more, - either by picking different dealers each time or same dealers and asking them to respond to a revised bid. You can play one dealer against the other openly.

11. Once the price stops going lower, you have hit rock bottom. Note that price and the dealer. Thank dealer that responded with the price you got and the dealership that gave you the price and mention that you are buying the car from the winning bid.

12. All along, keep watching the inventory on the dealer from 4, from his website. Watch out for cars that have been sitting for a long time. You can do that for a couple of other dealers too if you are motivated. If you are a credit union member, pre-apply for a loan and be ready with the best rate you can get outside..

13. Go to the dealer in 4. Ask for the car/color/options... Ask for a test drive. Act like you are one of those impulse buyers.. Ask him what specials the dealer will offer him in terms of service - like free oil changes, free loaners, carwashes, etc. Let him boast about how good a dealer he is.. He will cough up a lot of freebies. Tell him that you are pleased and will buy the car and ask him what his best deal would be. Compare with your notes. If the offer is better than what you already have, then you are good. Else, make an offer of $500 below the price from 11. Tell him that you will buy it now if he honors that price. 99% chance that you will get it. Close the deal - making sure that you do not buy anything extra - like fabric protection, rust proofing, mudguards, or extended warranties. You can shop for all that later on.. The dealer will ask you to finance thru him. At this point, you can say that you have an approved loan - rate from your bank.. He will hate that but will beat that rate by at least 1%. If you have been following this dealer's inventory and the car you have picked has been on the lot for some time...then you can use that to your advantage as well.

14. If you cannot get it for that price, then just walk away and wait for a day or two. If he does not call back, then you have the dealer /price from 11. You are good to go there and close the deal.

15. If 14 does not work, then you have the deal from 1 and 2. You have multiple options for the same car. You are truly powerful at this point.

16. I have bought 2 cars using this method. My friends, family, everybody has used this method, accounting for dozens' of cars without ever stepping into a dealership for negotiations ( other than test driving ).

Try it out and any feedback is welcome.
‚Äč
Quote from vyahoo View Post :
My approach is similar, but slightly better. Try this method.

1. Go to carquotes.com and pick all the cars you are interested. You will have to pick a financial institution,- pick any credit union. Give your details. You will get a detailed brochure of the car, options, invoice price, ongoing rebates and a pre-negotiated price on the car, and a dealer to go to, whom to contact, etc. It will also give you the rebates, etc. Note the dealer name, price.
If you do not like to hear from the dealer, register for a Google voice phone number. Callers can leave all messages they want on that. You can call them back using the same number...nobody need to know your real number.

2. Go to Zag.com, buy a car, and pick a car, options. This will give you a price on the car without
actually giving your details. Note this price down. Don't give any details here.

3. Go to Edmunds.com and see if there are any 'manufacturer to dealer' incentive on the car. Note that down.

4. Avoid the dealer nearest to your house. Reserve that for the very last.

5. Pick another dealer for test driving the car. This dealer should not be the one from 4, and should not be the one from 1. Test drive the car and mention to the dealer that you did not like it, so that you are never bothered by them.

6. Collect one more reference price from carsdirect.com. Note that down.

7. Now you have 3 reference prices from 1, 2, and 6.

8. Go to cars.com and invite bids via email from different dealers. Avoid dealers from points 1, 4, and 5. You can do 3 dealers at a time. You can repeat the bids for as many dealers as you wish...for as long as you can travel. You will get a bid, if you mention that you are serious about buying and are willing to do business with in the next 5 days. Make sure the bid includes destination charges, and carpet floormats, which the dealer rips you out. Request him to itemize the quote - price, - rebate - dealer cash, + destination charge. Verify the prices and dealer cash info from e-brochure from 1 and information from 3.

9. I would pick dealers couple from two different neighboring states as well. Sometimes rebates are regional... if you pick a different region, you may be eligible for a different set of rebates. That is truely for a MOTIVATED bargain hunter...like me. You can ignore this one if you are not.


10. Pick the lowest of the bids from 8. Compare it with the prices from 1, 2. Subtract 500 from the lowest bid and then invite fresh bids again - stating that this is the lowest bid. Allow the dealers to get back to you with their revised bids. You can continue this process a couple of times more, - either by picking different dealers each time or same dealers and asking them to respond to a revised bid. You can play one dealer against the other openly.

11. Once the price stops going lower, you have hit rock bottom. Note that price and the dealer. Thank dealer that responded with the price you got and the dealership that gave you the price and mention that you are buying the car from the winning bid.

12. All along, keep watching the inventory on the dealer from 4, from his website. Watch out for cars that have been sitting for a long time. You can do that for a couple of other dealers too if you are motivated. If you are a credit union member, pre-apply for a loan and be ready with the best rate you can get outside..

13. Go to the dealer in 4. Ask for the car/color/options... Ask for a test drive. Act like you are one of those impulse buyers.. Ask him what specials the dealer will offer him in terms of service - like free oil changes, free loaners, carwashes, etc. Let him boast about how good a dealer he is.. He will cough up a lot of freebies. Tell him that you are pleased and will buy the car and ask him what his best deal would be. Compare with your notes. If the offer is better than what you already have, then you are good. Else, make an offer of $500 below the price from 11. Tell him that you will buy it now if he honors that price. 99% chance that you will get it. Close the deal - making sure that you do not buy anything extra - like fabric protection, rust proofing, mudguards, or extended warranties. You can shop for all that later on.. The dealer will ask you to finance thru him. At this point, you can say that you have an approved loan - rate from your bank.. He will hate that but will beat that rate by at least 1%. If you have been following this dealer's inventory and the car you have picked has been on the lot for some time...then you can use that to your advantage as well.

14. If you cannot get it for that price, then just walk away and wait for a day or two. If he does not call back, then you have the dealer /price from 11. You are good to go there and close the deal.

15. If 14 does not work, then you have the deal from 1 and 2. You have multiple options for the same car. You are truly powerful at this point.

16. I have bought 2 cars using this method. My friends, family, everybody has used this method, accounting for dozens' of cars without ever stepping into a dealership for negotiations ( other than test driving ).

Try it out and any feedback is welcome.

Thanks a lot vyahoo and all the users who has spent selfless effort to put together these great car buying tips. I followed vyahoo's suggestion to purchase 2016 Mazda CX 5 with i-Activesensing and Technology package, Mazda mobile start, and all weather mats. For this car including these options MSRP comes out to be $34,240. From TrueCar I got the following dollar values:
Average Paid: $33,520
Factory Invoice: $33,321
TRUECar Estimate: $32,871
Good Price: Less than $34,226
Great Price:Less than $33,352
Exceptional Price: Less than $32,126

I started vyahoo's step on Sunday and by Thursday I made this purchase. For this car with all these options I paid $30,975 with 1.45% APR on 60 months loan. Only thing is I couldn't get the nearby dealers to match this offer so I drove 101 miles to get this car. But 101 miles drive for this car at this offer is nothing. I would suggest anyone in OH to check this dealer (Chuck Nicholson, Dover OH) and specifically the sales manager Ted Mast if you are looking to Mazda or GMC. I was in and out the dealership in less than 45 min and they did not even ask about any carp like additional warranty or anything. These guys are great. Ted never called my phone and we only chatted via email.
Thanks again guys for all the help.

Gajju
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#484
Would you guys modify this process in any way for shopping for a lease or is it basically the same process??
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#485
Trying to buy 2016 honda pilot lx-awd,so the best offer i got is 28,991,truecar says factory invoice is 28 608,not sure if this the best price,need to buy car in 2 weeks.
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#486
Quote from hellis001 View Post :
Trying to buy 2016 honda pilot lx-awd,so the best offer i got is 28,991,truecar says factory invoice is 28 608,not sure if this the best price,need to buy car in 2 weeks.
Aim for the lowest price paid on truecar data. simple as that. you have 2 more weeks of emailing and phones. keep up the work. The best price is whatever you are willing to pay when you get tired of calling/emailing or when your time is up.
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#487
Don't forget to try pricing through Costco auto buying program. Saved me over $3k vs Truecar on a new Acura with same specs. I still got them to come off $500 more than the Costco price. YMMV and may be different among brands/dealers/areas of the country. But Costco is a great comparison/negotiation tool
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#488
I was able to score a 2016 Elantra with a msrp of $19555 for $15155 on truecar. legit deal.
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#489
Quote from long_time_lurke View Post :
I was able to score a 2016 Elantra with a msrp of $19555 for $15155 on truecar. legit deal.
Have you tried the uber driver coupon seen in the incentives on trucar for Elantra? Based on Uber support that knocks off another 1k as long as you have a screenshot showing your name on the Uber dashboard (simply creates an account with them and ignore the rest).
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#490
Quote from teetee1 View Post :
Have you tried the uber driver coupon seen in the incentives on trucar for Elantra? Based on Uber support that knocks off another 1k as long as you have a screenshot showing your name on the Uber dashboard (simply creates an account with them and ignore the rest).
I saw the Uber but did not try it. Someone has to fund it (Uber), and I figure if the dealer verifies with Uber, may have to repay it. So, did not try it.
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#491
is 28600 for a 2016 Kia Sedona EX (no addons) a good price before taxes and fees?
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#492
Quote from rohandm View Post :
is 28600 for a 2016 Kia Sedona EX (no addons) a good price before taxes and fees?
i dont think so.

i was getting 25,595$ for a 2016 Honda Odyssey. and im pretty sure most people will take the odyssey over the sedona in a heart beat.

car choice aside, truecar in my area was pricing the Sedona @ $25,196 in southern california
Last edited by jaqnabox December 30, 2015 at 08:37 AM
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#493
Quote from jaqnabox View Post :
i dont think so.

i was getting 25,595$ for a 2016 Honda Odyssey. and im pretty sure most people will take the odyssey over the sedona in a heart beat.

car choice aside, truecar in my area was pricing the Sedona @ $25,196 in southern california
While it's true for both counts, people who have not done research on 2016 sedona should watch this funny review video which includes a pretty long list of features:
https://www.youtube.com/watch?v=9PHEEbnwycg
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#494
Quote from jaqnabox View Post :
i dont think so.

i was getting 25,595$ for a 2016 Honda Odyssey. and im pretty sure most people will take the odyssey over the sedona in a heart beat.

car choice aside, truecar in my area was pricing the Sedona @ $25,196 in southern california
Is that the 2016 Honda Odyssey "LX" version?
Last edited by Behave December 30, 2015 at 05:28 PM
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#495
Quote from Behave View Post :
Is that the 2016 Honda Odyssey "LX" version?
LX base model

Quote from teetee1 View Post :
While it's true for both counts, people who have not done research on 2016 sedona should watch this funny review video which includes a pretty long list of features:
https://www.youtube.com/watch?v=9PHEEbnwycg
That is quite a list of features, but to be fair you are comparing the ody LX to the sedona SXL. and it comes the appropriate price tag $10k more.

to compare apples to apples.
Sedona SXL - truecar 35k
Ody Touring Elite - Truecar 40k.

Sedona EX- 25k
Ody LX - 25.5k

Sedona L - 23k
Last edited by jaqnabox December 30, 2015 at 06:06 PM
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