New Car Buying Tips, Please??

[UNF2007]

Bought a new Highlander recently after both our vehicles were totaled in a hail storm. First question they ask is payments vs total cost, obviously negotiation of total cost is the way to go.  With the negotiation I anchored them with a low offer, of 6,000 off MSRP. Went back and forth, including asking for things I didn't care about like adding a TV. Finally they came back with 1,500 off. I wrote down my number and final offer of 4,000 off, and they said it would be selling at a loss, couldn't do it , etc. etc. So I left them my number and said the offer was good for 24hrs, call me if they decide otherwise, and walked out with my wife. I had to coach her that sometimes to get a good deal, you have to be willing to walk away from a deal, so she wouldn't freak out. They called us back in like an hour and accepted, we drove back and bought the car.

 

As an aside we tried to buy a used one first from Carmax, I learned a few things in the process. The sales people there are not particularly knowledgeable about any given car, since they sell practically every make and model.  They are also very low key, no pressure, since the commissions are just based off making a sale, and not the price paid for the car. They offer a free CarFax report, on their site, unfortunately I didn't realize this prior to going in person. The car we were interested in had been in 3 accidents, used as a rental vehicle, and hail damage, which we didn't find out until we were about to buy it, when they pulled the report. They will ship cars from other locations, but apparently it takes a month, unfortunately we didn't have that much time left. I think when I get my next car I will go the Carmax route again, except spend more time looking over the CarFax report, rather then just type, mileage and price.

[KJP]

Last month I bought a new, fairly popular car for a little above invoice.  I knew the model and trim level I wanted, so I emailed the five largest relevant dealerships in the area and asked for two quotes: (i) out-the-door for cash, and (ii) out-the-door with manufacturer/dealer financing.  They all replied promptly, and I went back and forth a few times until all the quotes got to around the same level.  I was open about contacting multiple dealerships and would forward a quote from one dealership to another to try to get them to beat it.  Several tried to get me on the phone, but I declined and asked for all quotes in writing.  Then I went to the dealership that was the easiest and most straightforward in their emails and bought it for exactly what the emailed quote was. 

 

Other than the ridiculous amount of waiting around at the dealership, it was fairly painless.  The dealers know that new cars are low gross margin commodities with the profit likely coming from future service, so they have a big incentive not to lose an initial sale to a competitor.  So, assuming there are multiple relevant dealerships in your area, with a bit of research and some emailing you should be able to get a fair price pretty quickly and without much hassle.

 

 

[Spekulatius]

I had the experience that it was difficult to extract a clear price for a vehicle using email quotes. Some dealership just wouldn’t do it, so I dropped them. They wanted me to come in personally, which I refused to do, because I consider it a waste of time.

 

Then after getting a satisfactory price, I had the experience that a dealer was adding back extra costs (advertisement fees, a fee for paperwork) to the cost, which I rejected and actually was starting to walk out on them. So they relented and dropped this stuff after some back and forth.

 

Depending on the area where you live, you can run out of dealerships fairly quickly, when you start to walk on them.

[bizaro86]

I had the experience that it was difficult to extract a clear price for a vehicle using email quotes. Some dealership just wouldn’t do it, so I dropped them. They wanted me to come in personally, which I refused to do, because I consider it a waste of time.

 

Then after getting a satisfactory price, I had the experience that a dealer was adding back extra costs (advertisement fees, a fee for paperwork) to the cost, which I rejected and actually was starting to walk out on them. So they relented and dropped this stuff after some back and forth.

 

Depending on the area where you live, you can run out of dealerships fairly quickly, when you start to walk on them.

 

I had that experience almost exactly. Basically no dealership in my local area would provide an email quote. Or they emailed back with the MSRP and said to come in to discuss options/incentives.

 

My wife had the idea (which worked) of contacting out of town dealerships. We negotiated a purchase down to exactly invoice with all incentives to us from a newly opened dealership three hours from us. They were willing to negotiate by email once we said we weren't driving to them without a firm price based on the distance. My in-laws live in that city so we went for a visit at the same time, not wasting a trip.

[KJP]

I had the experience that it was difficult to extract a clear price for a vehicle using email quotes. Some dealership just wouldn’t do it, so I dropped them. They wanted me to come in personally, which I refused to do, because I consider it a waste of time.

 

Then after getting a satisfactory price, I had the experience that a dealer was adding back extra costs (advertisement fees, a fee for paperwork) to the cost, which I rejected and actually was starting to walk out on them. So they relented and dropped this stuff after some back and forth.

 

Depending on the area where you live, you can run out of dealerships fairly quickly, when you start to walk on them.

 

I had that experience almost exactly. Basically no dealership in my local area would provide an email quote. Or they emailed back with the MSRP and said to come in to discuss options/incentives.

 

My wife had the idea (which worked) of contacting out of town dealerships. We negotiated a purchase down to exactly invoice with all incentives to us from a newly opened dealership three hours from us. They were willing to negotiate by email once we said we weren't driving to them without a firm price based on the distance. My in-laws live in that city so we went for a visit at the same time, not wasting a trip.

 

Spekulatius and bizaro:  How many dealerships do the relevant manufacturers have near you? 

 

The manufacturer I bought from has 10 dealerships within 30 miles of where I live, so there is plenty of competition. 

[bizaro86]

I had the experience that it was difficult to extract a clear price for a vehicle using email quotes. Some dealership just wouldn’t do it, so I dropped them. They wanted me to come in personally, which I refused to do, because I consider it a waste of time.

 

Then after getting a satisfactory price, I had the experience that a dealer was adding back extra costs (advertisement fees, a fee for paperwork) to the cost, which I rejected and actually was starting to walk out on them. So they relented and dropped this stuff after some back and forth.

 

Depending on the area where you live, you can run out of dealerships fairly quickly, when you start to walk on them.

 

I had that experience almost exactly. Basically no dealership in my local area would provide an email quote. Or they emailed back with the MSRP and said to come in to discuss options/incentives.

 

My wife had the idea (which worked) of contacting out of town dealerships. We negotiated a purchase down to exactly invoice with all incentives to us from a newly opened dealership three hours from us. They were willing to negotiate by email once we said we weren't driving to them without a firm price based on the distance. My in-laws live in that city so we went for a visit at the same time, not wasting a trip.

 

Spekulatius and bizaro:  How many dealerships do the relevant manufacturers have near you? 

 

The manufacturer I bought from has 10 dealerships within 30 miles of where I live, so there is plenty of competition.

 

There are 8 relevant dealerships in the metro area I live in. The farthest would have been about a 1 hour drive, but the other 7 are all within 30 minutes. Maybe it was a Canadian thing?

[sundin]

This is an excerpt script of buying a car from a great book I read recently. It relates to changing the buying dynamic between the buyer and seller and having more leverage in the sale process - a similar strategy to what many of you have already mentioned. Quite an interesting application of game theory.

 

“Hello, my name is Bruce Bueno de Mesquita. I plan to buy the following car

1. today at five P.M. I am calling all of the dealerships within a fifty-mile radius of my home and I am telling each of them what I am telling you. I will come in and buy the car today at five P.M. from the dealer who gives me the lowest price. I need to have the all-in price, including taxes, dealer prep [i ask them not to prep the car and not charge me for it, since dealer prep is little more than giving you a washed car with plastic covers and paper floormats removed, usually for hundreds of dollars], everything, because I will make out the check to your dealership before I come and will not have another check with me.”  If you are making your first call, be sure to tell the salesperson that you will tell the next dealer the price you’ve been quoted. After the first call, make sure the future salespeople know that you will be repeating whatever is the lowest price offered to you so far.

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The Predictioneer's Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

[Jurgis]

This is an excerpt script of buying a car from a great book I read recently. It relates to changing the buying dynamic between the buyer and seller and having more leverage in the sale process - a similar strategy to what many of you have already mentioned. Quite an interesting application of game theory.

 

“Hello, my name is Bruce Bueno de Mesquita. I plan to buy the following car

1. today at five P.M. I am calling all of the dealerships within a fifty-mile radius of my home and I am telling each of them what I am telling you. I will come in and buy the car today at five P.M. from the dealer who gives me the lowest price. I need to have the all-in price, including taxes, dealer prep [i ask them not to prep the car and not charge me for it, since dealer prep is little more than giving you a washed car with plastic covers and paper floormats removed, usually for hundreds of dollars], everything, because I will make out the check to your dealership before I come and will not have another check with me.”  If you are making your first call, be sure to tell the salesperson that you will tell the next dealer the price you’ve been quoted. After the first call, make sure the future salespeople know that you will be repeating whatever is the lowest price offered to you so far.

==========

The Predictioneer's Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

 

Have you done this or have you only read it?

[Spekulatius]

In one case, I had the choice of 3 dealerships within a 30 mile radius. Welcome to suburbia. I bought get from non of them,I chose to buy from a dealership 50 miles ago, basically based on positive online reviews (Yelp, Google). Contrary to popular believe, I have found that large numbers of positive or negative reviews on Yelp or Google tend to be deserved.

 

In some cases, you have the to “trade” distance for better service or prices.

[Jurgis]

In one case, I had the choice of 3 dealerships within a 30 mile radius. Welcome to suburbia. I bought get from non of them,I chose to buy from a dealership 50 miles ago, basically based on positive online reviews (Yelp, Google). Contrary to popular believe, I have found that large numbers of positive or negative reviews on Yelp or Google tend to be deserved.

 

In some cases, you have the to “trade” distance for better service or prices.

 

What do you do with service? Aren't you forced to go to original dealership for free warranty service?

[Spekulatius]

In one case, I had the choice of 3 dealerships within a 30 mile radius. Welcome to suburbia. I bought get from non of them,I chose to buy from a dealership 50 miles ago, basically based on positive online reviews (Yelp, Google). Contrary to popular believe, I have found that large numbers of positive or negative reviews on Yelp or Google tend to be deserved.

 

In some cases, you have the to “trade” distance for better service or prices.

 

What do you do with service? Aren't you forced to go to original dealership for free warranty service?

 

If the dealership offers freebies, like oil changes,  than yes. For all other things, you can get service for warranty at any other dealership and I found it not to be a problem. I have moved my cars a couple of times across state lines, so I know. A  dealership with a good service department will beat a crappy dealership with a bad one, regardless where you bought your car in my experience.

[boilermaker75]

In one case, I had the choice of 3 dealerships within a 30 mile radius. Welcome to suburbia. I bought get from non of them,I chose to buy from a dealership 50 miles ago, basically based on positive online reviews (Yelp, Google). Contrary to popular believe, I have found that large numbers of positive or negative reviews on Yelp or Google tend to be deserved.

 

In some cases, you have the to “trade” distance for better service or prices.

 

What do you do with service? Aren't you forced to go to original dealership for free warranty service?

 

The dealership gets paid by the manufacturer for warranty work. So they welcome the work even if you did not buy the car from them.