I mentioned before that I am shopping for a new car. I’ve been to multiple dealerships since this is the first new car I’ve ever bought, and (for some odd reason) wanted to experience the new car buying experience complete with high-pressure sales tactics. Here are some examples of lies and deceptions that I’ve run across so far from different folks.
MSRP “Market Value Adjustment”
Apparently, MSRP isn’t good enough for some cars. I like the Honda Fit, which is a relatively popular car in my area and one in which the MSRP isn’t that much higher than invoiced (as confirmed by TrueCar.com) and thus doesn’t have that much built-in profit.
So, they add another $1,000 to $2,000 and tell customers that this makes the price “market value”. Of course, as I finish negotiating back down a bit below MSRP they admit “oh, the first price I said is only for folks who don’t know how to buy a car. But one person every week walks in and pays it!”.
And people wonder why car-buying isn’t a fun experience.
Options That Aren’t Optional
Another way to boost profit is to package a bunch of options like floor mats, wheel locks, or keyless entry and make a non-official $600 options package and put it on all the cars. When you don’t actually want something, say, wheel locks, they just say “oh, it’s already installed, sorry”. I can remove the floor mats in about 30 seconds, pal. If you push, they’ll let you buy one without options only if you commit to one that hasn’t arrived yet but is on their shipping list.
Jacked Up Options Prices
If you’ve already artificially tried to raise the price of the car, and then tack on default accessories, what is left? Make the price of the accessories above MSRP.
I wanted to buy a cargo cover for the back, and was told it was $225. When trying to negotiate, I got the sob story “oh, I only make $20 on this anyway”. Really, then why can I go online to another genuine Honda Dealer at College Hills Honda for only $119 plus shipping? And the retail price is shown as $165??
Always look online for a dealer that has fair prices on direct accessories, and either use that price to haggle or buy the accessories separately if you’re willing!
The Magically Disappearing Newspaper Ad Car
Finally, they even whipped out the magic for me. I saw a dealer with a newspaper ad for a 2009 model car at a great price, only $150 over invoice. I called them, and they said it was in stock. I drove over, and they said to take a seat and they’d bring it over. “Oh! I’m sorry, that car has just been sold. Can I interest you in something else?” I was pissed and started walking out the door. “Okay, okay! What if I offered you a 2010 car that had identical features or better at the same price!” Fine, show me. Now. After we look for a 2010 that was similar for about 10 minutes, the 2009 was miraculously available again!
That’s it for now, I’ve got to catch another flight, but I’ve got more salesman deceptions to share later…
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When you call the dealership to ask about an advertised car, first ask for a salesperson. Then ask if the car is available and let them know in no uncertain terms if the car disappears in the next twenty minutes you will walk out and will send a written complaint to every person and regulatory agency you can think of.
Whenever I see add ons like floor mats, I simply point to the charge and say that number doesn’t exist. When they say we’ve already put it it/on the car, I tell them, “You shouldn’t have.”
I have no sympathy for the salesmonkeys at the stearlerships. I really think that the cars should be priced for what they are and the only negiotating is done on the trade in. Buying a car is a rip off to begin with but then the stearlerships try and eak out as much as they can on top of that, this article didn’t even get into the ploys that the F&I department will work on you for gap insurance, extended warranties etc, etc. after you decided to accept the raping the salesmonkey gave you.
When I bought my Fit, the dealership general manager told me that the “fabric protection plan” was mandated by their corporate owner, Penske. Well, I called Penske directly & learned that this was not at all the case. Within 3 hours, the dealership had called me back & told me that the item was being removed from the invoice.
Uggh!
Thanks for sharing your experiences – I’ll be doing this in the next few months and I’m not looking forward to it. Once you decide on the make and model you want, are you going to follow the email strategy? That seems to be the generally-agreed way to get a decent deal…email 4-5 dealerships with specs and get them to give you an out-the-door price. You can ask for counter-offers once you have initial quotes from everybody and you only have to go to the dealership to pick up the car.
Also: Are you planning to pay cash? Are they trying to sell you on monthly payments instead of the actual price of the car?
If even if you don’t want to pay cash, it’s probably a good idea to have financing already available. Even if you go with the dealer financing at least you have a fall back option.
Thing is, a NEW car sold by one dealership can be priced significantly differently from the same model by another dealership. However, it is in the dealership’s best interest to make the whole process opaque (and frankly a little sleazy), and discourage people from “shopping around” Considering the amount you are paying vs. how many dealerships an average person visits before closing a deal, most people end up with a raw deal – the cards are stacked in the dealership’s favor.
The biggest mistake you can make is actually walking into a dealership looking for a car. The method I used successfully in the past was to compile a list of all dealerships selling the model that I am looking for in the area – I want a list of 10-15 dealerships to be successful. Then, write down the exact model and specifications that you want. You want to do this in on a Tuesday or Wednesday, near the end of the month. The point is to be able to identify dealers which are willing to give significant discounts as they are nearing the end of the month and need to get above a certain quota to get incentives from the manufacturer – in many cases, these incentives are retroactive to all the other vehicles sold that month (not just those above the quota), so the dealer has a incentive to significantly discount vehicles as they near that quota. Unfortunately, there is no way of telling who is at that point without applying the methodology below.
Then start running down the list of dealerships – calling each one of them and asking to be put through to the sales manager. You want to try to get to the sales manager, but often you will end up with a salesman. Say: “I am looking to buy XXX with YYY specifications. I intend to buy by the end of the month. I am currently calling up a short list of dealerships in the area to provide me with their best pricing. I would like to include you in my consideration. After I have spoken to all dealerships, I will reach back to you to let you know my decision, either way.” At this point, they will either decide to provide a price, or decline to participate. There will be a number that decline, but that’s OK because the initial list is 10-15 long.
At this point, do not negotiate. Just get the price, and promise to call back the next day. Remember to get the ALL IN price – i.e. what you will pay to drive the vehicle off the lot.
Run down the list, take down all the prices. Do not engage with the salespeople – they will often try to get you into the store, etc – simply say that you are not going to do that, and if they want to participate, they need to do it this way.
After you run down the entire list, you should have narrowed down the dealers to 8-10, as a number would have refused to participate or just quoted MSRP. You will have the lowest price quoted in this group.
Then, repeat the process, calling up the narrowed down list and speaking to the same person you spoke to before. This needs to happen shortly after (the next day at latest) the initial call, so you need to work quickly. Call each one and say something to the effect of: “thanks for participating. I have called a number of dealerships in the area, and the best price I have received was $XXX. So I will be going with that.” Then just SHUT UP. At this point, the salesperson will either say, fine, or will give you a new, lower price. If you get a new lower price, repeat the whole process, calling the dealers again until you get the lowest price possible.
Working this way got me $1000 off MSRP on a Civic. Your mileage will vary depending on the vehicle and your patience. But I guess the bottom line is, do NOT walk into a dealership without a deal already secured. That is when all these crazy tactics come into play and you are STUCK. When you are on the phone, you can always hang up
Hope this helps.
Dude, why bother? I bought a new car 1 month ago. I got my price online through a car-buying program from USAA (my wife’s bank). I got a guaranteed price with 3 dealerships listed. I took that print out to the local dealer nearest to me. They matched the price. They had no choice. It was “match this price or I go buy it from the dealer listed here”. Unless you’re just doing it for “fun”, there is never a need to deal with car salesmen. You can call and get the best prices from the Internet Sales manager or the Fleet Manager. Always have your price print out (with/without add-ons) and make them match or beat. Sales guys always have a sob story about how much they are or are not making..it’s part of the “game”.
As far as ad-ons go:
I got any extras at invoice price, not at MSRP (floor mats and a first aid kit in my case). Even with tax, tag and title I paid less than the sticker price. Sticker/MSRP mean nothing. There is always a monthly rebate, plus dealer hold backs to make sure they make a profit. Never pay above invoice for a car (most cars anyway). Also, always go in with financing done. The finance guy at the dealership will also try to stick it to you.
JC, I like your approach with calling and taking the lowest offer to each dealer, however, I took the other approach and put them in a position to meet my offer for the vehicle. I did the numbers ahead of time adding up the price I wanted to pay for the car, the price I wanted to pay for the options, and subtracting the value of the trade-in value I expected to get (all done with appropriate research, truecar.com, kbb and edmunds are awesome). I then called a couple dealerships to verify their sales tax rate and threw in a couple hundred bucks for fees (these are usually $500 to $1000, but there is no way I am paying all of them). Then I called the dealership, talked to a sales rep and told him I would be there in 20 minutes to drive a specific car, and he should have it ready when I get there.
I walked into the dealership with a file folder of papers (some of them blank, but you want them to think you always have something else), and spent 10 minutes driving the car. Then I sat down with the rep and told him I wanted a car with a specific list of options (no less and no more) at the price I calculated. I made it clear that if he could meet that price I would purchase the vehicle immediately.
He came back with an offer that was about $1500 higher than my target price, with extra fees all over the place, so I told him he should continue working on eliminating any unnecessary fees an options I did not ask for (wheel locks, undercoating, VIN etching, alarm). I then gave him my number, told him to call me when they met the price and walked out of the dealership.
I received a call about an hour after I left telling me that they had met the price. By meeting this one price I effectively negotiated the price of the new car, price of the options and trade in value all in one complete package, rather than fighting multiple battles for each item.
What Robert wrote, +1
beyond USAA, Costco and AAA both offer car buying programs that are negotiation/hassel free. Otherwise, I stick to the ad cars. Works incredibly well in Los Angeles for the ilks of Hondas/Toyotas/Nissan. Every dealer has a ad car every weekend. If a dealer says “already sold it”, just walk away and go to the next one. Someone will sell one to you in the 50 mile radius.
To save even more, and financing managers REALLY hates this: act as if you will finance. Get the price of car based on financing. At signing, pay cash. Dealers always get kickbacks from financing companies. They’re obligated to sell cars at the contract price regardless of loan/cash payment. Ca-ching.
Confessions of a Car Salesman
http://www.edmunds.com/advice/buying/articles/42962/article.html
A must-read for anyone considering a new vehicle purchase… thanks for taking the depreciation hit for me!
Couple of thoughts:
1) Car buying should be fun because you (the buyer) hold all the cards. If you don’t like any part of the deal or negotiation, simply walk out and don’t look back. There are plenty of dealers in any given area.
2) Use the internet to your advantage – learn as much as you can about the make/model you are looking for before you go to the delaership. When the salespeople realize you know what you are talking about, they will be much less likely to pull a fast one on you.
2) Don’t buy a brand new car! Prices on 1-2 year old models with 10K-20K miles can be up to 25% less.
Don’t buy a used car! You have no idea if it has been properly maintained, serviced regularly or outright abused.
Rarely does a one year old car with 10K miles sell for 25% less than the new model. Dealers make significantly higher margins on used cars . That’s why they are so eager to find out about your trade-in when you walk in the door. When I bought a new $33K van, used models with 30K miles were priced firmly at $28K. Why would you trade two years of less warranty, more wear, and loss of new car feel for a 15%? Even if the vehicle were perfect, the mileage depreciation is still $5K. So you are not being compensated for the risk of not knowing how the vehicle was driven and cared for. People buy used because they have a hard ceiling on what they can afford and they want the vehicle. But it is not necessarily a frugal decision.
I went through the experience this summer, when buying a Corolla, and did fairly well.
The idea is to go to the dealership ONLY to test drive the car, and check out features. Never go with the intention to buy.
Once you know exactly what you want, create a list of specs (including color etc) that you must have on the car. Then, use phone and email to get out-the-door pricing. Out-the-door means EVERYTHING included (taxes, all fees, useless ‘mandatory’ options they want to add in etc etc). This immediately weeds out the rip-off artists. Most of them won’t even try to compete over the phone or email-they won’t give you a quote.
ALWAYS get a VIN number for the vehicle they are quoting the price on, before you go to pick it up.
Result: It was very easy to separate the honest dealerships from the rip-off artists. It usually only took a single phone call, and no time wasted at the dealership. Yes, the rip-off artists can be persistent even on the phone, but make it a fun game – try to see if you can back them into a corner with their conflicting statements, just to hone your negotiating skills 🙂
I got a new Corolla LE with multiple options for $15850 (incl tax), which was way under MSRP, and also under invoice.
Sell your old car yourself, on the online version of Autotrader, for free. Don’t complicate the transaction (and give the salesman a place to bite) by doing it through the dealership. It took me only 3 days to sell my old car, for cash, at no cost, and a savings of $700 over the dealership offer.
I second JC’s approach… I used a similar one also to buy a 2009 Civic a couple months ago.
If you have test driven a Fit and know it is the car for you, you can use Edmunds Forums (http://www.carspace.com/csGroups) to get a good idea of what people actually paid (NOT the TMV, which you can do better than). You can also use realcartips.com and compare with what people have paid. Truecar.com didn’t seem quite as good as those sites. If you are getting a popular model, those sites are particularly useful. After you do your research, you should have an exact price in mind of what you will pay for the car, with all incentives factored in, OUT-THE-DOOR. Be sure you figure out your local area’s taxes and fees so your price is comparable to those on the forums. I didn’t pick the absolute lowest target, but one that seemed reasonable to me (and it was less than the TMV and USAA price).
I made a list of 10 dealerships within 45 mins and started calling. I also had the USAA Car Buying Service price as a starting point. They will get very irritated when you call around for prices and many flat out would not send anything in writing. But it helps to have a starting point especially when you know for a fact that the worst you can do is the USAA price. The price I ended up getting was almost $800 less than the USAA price when all was said and done, and I was able to get the dealer to negotiate the OTD proce over email with me prior to coming in. In fact, I agreed to the price via email when I was at work on a Friday, and I went in that night and picked up the car. Total time at the dealer was one hour to do a quick once-over on it and sign the papers.
Add-ons WERE an issue, but they always seem to be able to come up with a car that doesn’t have any. So that was easy enough to deal with.
It helps to be able to purchase that day or next day. If you can do it that soon, it makes negotiating much easier. Have the money ready in your checking account. The dealer that emailed me offered me a price OTD of $260 more than I was looking for; I countered with the price that I was looking for (based on my earlier research) and said I would be there that evening with a check to pick it up, and he agreed.
Anyway, whether you squeeze out a few bucks or not… congrats on the new car!
The one common theme of all these methods is to stay the heck out of the dealership. As long as you are outside the dealership you are in control of reality. The minute you walk into the dealership, even with all the documentation and printed counter offers in the world, you enter a reality distortion field where the salesmen control reality.
I was in the market for a Toyota Sienna LE. One salesman (at the test drive dealership) quoted $29,000 off the bat (at least $2K above and beyond MSRP). Another dealership tried to price me up on a cars direct quote of $24,500 by attempting to modify reality and explain why my perception of the cars direct was not real (it’s invoice, simply trying to ignore the quote, etc.). I guess I look like a sucker.
I finally got an offer I could not refuse from another dealership over the phone.
I ended up buying the same exact model+features for $23,500.
Just bought a 2009 camry with 40K miles for $16K out the door. Includes 100K bumper to bumper warranty which I added for $995
Go for same year off lease vehicles.Save about $4-5K off new with same peace of mind. I only drive about 5K miles a year and hope to offset the miles in 5 years. 5 year old camry is stll around 10K. Which means depreciation is around $1K a year.
Financing – if you are negotiating at the dealership, do not tell them you are paying cash (or have outside financing – as far as they are concerned, that’s the same as paying cash). Part of what they hope to make in profit on the car is in the financing. If they think they might be able to make it up on the back end, you might get some leeway on the front end price.
Tim
Have you checked what the Costco price is?
I found this to be an eye opening read. Its about an Edmunds writer who goes undercover as a car salesman.
http://www.edmunds.com/advice/buying/articles/42962/page001.html
Have you tried buyers experience on
http://www.carspace.com/csGroups
people tell you how much they paid for their car and the area they bought it from. I mean if you are a money sensitive person, and willing to spend the time to do the research on the car, I don’t think that it would be that hard to find a great deal.
I hope you can find a good car for a decent price. We ended up buying a Ford Freestyle from someone privately last year and it’s worked out fabulously!
oh man! This just confirms it for me.. I’ll buy my next car, used, from one of you guys via Autotrader. That seems the simplest ; )
I would rather go for a root canal than some of the dealerships I’ve been in. I’ll have to post my 2010 experience we get a “new” car. Wifey and I are gonna need a new car for our ever expanding family. A coupe doesn’t cut it for three kids 😉
Consumer Reports once had an article on how to get the best pricing. They mentioned you call to say 10 dealerships within your area and ask them fax you (this was a number of years ago) their best offer. I never tried this technique though.
You forgot to mention trade-ins and how crappy of a deal they are. When I bought my BMW, I didn’t trade in my Honda as I got over 5k more selling it in the classifieds.
@Josh: I’ve heard Costco’s pricing isn’t so great.
Forget getting accessories from dealers… For Honda:
http://www.handa-accessories.com/
Just a little tidbit… (whether you are buying a car or anything else that is negotiable). Instead of thinking “he has the car, I really want it, what do I have to do to get it.” Instead think of it this way: “I have the MONEY, they WANT my money, what are THEY going to do to get MY money?” That way you are negotiating from the position of power… The money is the prize, not the car.
Wow. For a blog about car sales guys playing sleazy games….look at all the advice. These comments are the real games. The saying goes “buyers are liars.” Proof is above…”say this, but do that…” lol
MSRP is usually a single percentage profit margin, the FIT profit margin was $300 a couple years ago. Fair margins IMO since people buy cars 1-3 times a decade, while daily drinking starbucks and designer water at triple digit margins.
Plus the price is on the car…your the one looking to beet me up 🙂 basically stealing from me. And you wonder why they try to get some of their margin back. Can’t make a living on $50 mini commissions.
Best tip I can give to stop the games is to hand your deposit with your offer. It shows your ready to buy and not playing games. If you want it to be fun for everyone, make a reasonable offer, like $500-800 over invoice. If your going to make a stupid offer, do it up front with the deposit, who knows. But do it before making the sales guy test drive 3 models….they are not ponies, they don’t need the exercise.
Anyhow, good luck with the purchase.
@carsalesguy – I think a lot of car salesman feel this adversarial relationship with the customer. The customer lies, so it makes it okay for me to do it.
There is no official “Costco price” for the Honda Fit, at least for me, although there is for the Honda Accord and Civic. It is simply in too high of a demand given the small MSRP markup. You’ll probably be offered MSRP. The Insight hybrid also does not have a Costco price.
I’m leaving heavily towards a used car now, but the 2009 Honda Fit is barely old at all and used models don’t seem to be available at much of a discount at all. I don’t want the previous generation Fit (until 08).
Watch out for the “dealer prep” fee that some dealers add in during tax, title, & doc (after you’ve already finished negotiating a price). Look for th “Cash Price Accessories” line on the paperwork they have you sign, if there is a value there question it, and refuse to pay it if it wasn’t part of the original negotiation.
Hi Jonathan – I’ve been a big fan of CarMax. Bought 4 cars from them over the years for myself and my wife from two different locations (Hillside, IL and Merrillville, IN). Pricing is up front and on their website and they typically show you blue book value as well. I did a quick search this morning and found a few 09 Honda Fits with less than 10k miles for 15k-18k. They are very fair on trade in value as well. You can pretty much buy the car online and make a day trip to your closest store if you do not have one close by. I have NO vested interest in CarMax, just sharing my personal experience there.
Carsaleguy, almost every comment above say things like “negotiate for the best price with multiple dealers.” I don’t know how that is a bad thing or “lying” in any way. It’s how capitalism works. You don’t think companies lie to you (or ‘stretch the truth’) in their commercials for their products? There is a reason that car salesmen have the reputation in the general public that they do, and no matter whether it is deserved or not, it exists based on a historical pattern of manipulating information to their advantage. With the internet, now the customers have enough information that, if they are smart, they can finally have even ground in the transaction. If the information is equal on both sides, I don’t see what the problem is.
I just bought a new (used) car so I figured I’d share my experience as well. I figured out what I wanted first and searched cars.com and autotrader.com for what I deemed a decent deal. I decided I wanted a Civic Si sedan. Other than that, I was flexible (color, navigation, etc). The nice thing about Japanese cars is when you buy a trim level, most things come standard and there aren’t many options. After searching for a few weeks, you can see what the average prices are. I checked out one at a dealership that had a clean car fax. Then I negotiated the “out the door” price. The dealer knocked a few hundred off the price which I felt was fair as the initial asking price was already pretty good. I also got pre-approved through my credit union so I knew what sort of rate I could get. I ended up financing through the dealers preferred bank because they beat my credit union’s rate of 4.79% (I got 4.14%). I also put down a decent amount so it wasn’t 100% financed. So I bought an ’07 Civic Si sedan with 32k miles for $15,900 ($17,200 out the door). I’m pretty happy with the price and the dealership experience wasn’t all that bad.
my mom gave me her old car. it’s 25 years old now. it’s a honda. everyone says they last forever. well i’ll see about that. i drive it about twice a month. frugal living? take a bicycle! take a train! take a bus! works for me. VERY frugal and i’m also fit.
Brian, you are right. I was reading to much into the comments.
I read Bill slamming “salesmonkeys” and saw comments such as “do not tell them your paying cash…” to get a better deal. This made me think about the bad advise and lies I always hear…such as don’t mention your trade, don’t mention your cash, don’t mention your credit.
Also, when reading comments such as test drive at one place, then shop at 10-15 dealers, I started thinking about the lies I hear when the customer wants to leave. “I have to talk to my wife….I have to go to the bank….I have to think about it…I want to grab some lunch and will be back in an hour.” I love telling them “hey, I skipped lunch, here is $5, grab me a burger since your eating lunch at BK.” I won’t tell you how many of these test drivers are thieves as well 🙂
Carsalesguy said “Plus the price is on the car…your the one looking to beet me up 🙂 basically stealing from me.”
That attitude right there is one reason I don’t like car salesmen. I’m in a dealership making a very large purchase that I’ll more than likely be paying for over the next 36 to 60 months, and this guy feels like it’s stealing from him when attempting to get a fair price for the car. If that’s how you feel, quit your job. Nobody is forcing you to sell cars with sh**ty profit margins. Go sell starbucks coffee.
Your job is to sell the car for the highest price possible, my job as the consumer is to get the lowest price possible. You aren’t being beat up…it’s a fight numb nuts. In the end, if you make the sell, you come out on top because you walk away with cash and I drive off with a depreciating “asset”.
Robert, that is why included a smiley face…to show it was a light hearted comment. That is how people show humor in the internets.
Thanks for the career insight…but I rather get into law or the medical field. Nobody ever negotiates with their Doctor or Lawyer.
Did not realize it was ok to call someone “numb nuts” on this blog. /insert “your mama” joke here.
carsalesguy, what’s the biggest profit margin you made on a customer?
Alex.
The magin on new cars averages 8%. Selling full MSRP = around $1600 over invoice. 20% of that will be mine or $320. Not to bad if I sell 1 a day, but my monthly average on new cars = $200 per car.
Used cars are where the money is at. Most BMW and AUDI’s on the lot have markups of $2000-$5000. I can’t figure the exact margin because it varies so much. My monthly average is $350 per used deal.
I do ok because customers keep returning, and I make every deal as simple as possible. I also enjoy working because I turn over any ball busters to a green pea. I have no time to spend 10 hours on a $50 mini. At the same time I will bring any 30 minute deal to the manager for $50.
Hi, Carsalesguy,
But now people are buying cars at or below invoice. What is the margin left for you guys then?
If a dealership has the model you want but with additional options that you don’t want, will they be willing to order a new car from the factory? I don’t have any time constraints, so I’m willing to wait for the shipment.
I have been looking for a used audi and was wondering why they were priced so high on the dealers lots – way over any edmunds or kbb retail pricing. Im assuming they manage to sell them at those inflated values?
X,
The guys on the floor make mini’s if a deal goes at or below invoice. That ranges from $50-$100, depending on the pay plan. Most guys making these deals last about 2 months before going broke or get fired.
The rest of us learn to sell the car, not the price.
Bucky.
I think if you where looking at a hard to find color or a new model car, it can be ordered.
Regarding ordering options, I will use the example of power locks or power windows because I do not know what one your considering dropping. I don’t think that would NOT be available because it would cost more to install manual windows and locks then to keep the assembly line going.
Mike,
Keep in mind I was asked what my largest margin ever was. The normal mark up on an Audi is $2000-$2500. Once every 6 months you steal one from an auction because the dealers where in the wrong market and had to get rid of it. That is where I had a couple home runs. We always sold them because we spent a ton on advertising every month.
After going out and shopping for cars recently I learned a few things to avoid (and still haven’t found the car i want)…
If they pull out a 4 square, leave…
If they don’t have business cards with their name on it, but were sales man of the year… what the heck.
If the sales manager won’t give you a price on a car, but instead insists you just “make an offer” that he will “consider”, leave.
I agree wholeheartedly with the people who said go into a dealership with the intent of test driving the car and do the “dickering” later based on what you can find online.
Locally there is a ford dealer who consistently sells cars at invoice or below, in fact they advertise cars at invoice prices. Then there is another chain that claims that they will beat the other guys price or give you the keys the car… well they definitely don’t match other places prices.. they always have a loophole.
For those who suggest you buy a used car with a few miles on it, find out first if it is a previous rental car and decide if that is what you want, once a car is a rental, it is flagged as such forever.
I just got a new car through Costco Auto program. The final offer is $600 below invoice, though the invoice including advertising fee of $200 and fuel charge of $187. But the process is relatively painless and quick. At the begaining the offer was only $300 below the invoice, but then I mentioned the cash rebate I found on the edmunds.com of $500. The dealer agreed for $300 to meet in the middle. I guess the dealer really didn’t want to spend too much time on a mini like me, my test drive was led me a mechanic who was idling at the time while the dealer working with another customor. Then 1 hour go through all the numbers.
I might not have gotten the best deal in town, but I spent far less time. So, I am pretty happy with the Costco Auto program, as I know I am not a good haggler and don’t like to cut people too thin, but don’t like overpay either. the price I got still $400 below the great price on truecar.com
Are dealers still using 4 square? I have brought cars twice in last 6 years, no 4 square both time, just direct price talk with invoice as reference line.
@carsalesguy I think it’s a little unfair to disparage customers who want to both test drive a car, as well as get the best possible price for the car. These seem like reasonable desires to me.
no problems with test drives
no problems with people shopping for fair price
not to fond of those who have no intention of buying from you and think we are 6 flags.
You call 10 dealers, someone is going to beat you by $100.
Not good when manager asks why we got beat by $100 after spending 2 hours driving around.
@Matt – what’s wrong with rental cars? They are late-year, low mileage, very well maintained, and driven by a “wide cross section” of drivers (mostly middle aged people on business) a day or two each. With a non-rental car, were you might get one that was not maintained, driven every day like it’s the Indy 500 (or Baja 1000!). I know a few people who have very good experience with rental fleet cars.
@carsalesguy Well, what would you advise a consumer to do?
Personally, I wouldn’t buy from a dealer in Lower Uzbekistan to save $100. I’d rather buy from the local dealer in case there are issues.
But certainly you must agree that there has to exist some limit on the amount the local dealer can “lose” by, before it becomes worth it to buy from the dealer out in the sticks.
Bob, this is just my opinion.
Visit the dealership you want to buy from last.
I assume that will be the dealer closest to your house or want it serviced.
I usually ask those I drove to give me a crack once they finished pricing…but that rarely happens. That is why the pressure is on to close the deal that day.
@carsalesguy How can I know which car I want to purchase if I don’t do at least a little test driving?
you will have a ton of offers to test drive. As soon as your looking for info and numbers, someone will try to get you to have an emotional attachment to the car via a test drive. After that they earned the right to ask for your business.
I like what X did with costco. He liked the price, he went to the dealer and will buy if he likes the drive. Why spend your vaulable time messing around?
My approach and it has worked everytime and pissed off the dealers. First find the invoice price of the car. Next get online quotes from various local dealers. They all have internet departments now at days. And finally find message boards related to the car you want. Typically you can find what others are paying locally. ALWAYs and I mean always start from invoice pricing or below. It always drives them crazy, but if you go to the dealer educated you will always get hte best price. Just laugh when the quote you something around MSRP.
Why is it that a salesperson isn’t allowed to make any profit??I see
lots of adds like get the true invoice on the car you are looking for,
OK lets just sell all our cars at invoice and not make any money hmmm let me see if you owned a business isn’t it about profit???
Not a dirty word in my mind.Can i get that invoice on that polo shirt that they sell at the mall for around $60.00 to $80.00 Let me see i think it cost them to make that shirtabout $16.00 hmmm do the math how much mark up is that?
New cars have about 10-12% markup How about that sofa i want to buy O letsnot forget that nice dinner at red lobster that so marked up can i get the true cost on that hmmm i wonder how much it cost them to make it?
I sell cars and i luv it some people make it harder then it is..We Dont
like the back and forth stuff that all customer talk about we have whats called
a msrp that the Consumer dosent want to pay so we do the back and forth for them.If we marked all our cars down people would still want even a better deal.
I know we have a bad rap but things have change like surveys we send out to all our customer put yourself in my shoes if your manager at your job told you ok you can make $100.00 on this deal or you can make $600.00 what would you do????
Do some reseach like kbb.com find out the true cost and offer like 500 over its good for trades also.
We work hard just like you, and we should make profit this is america profit makes economy not saying we have to make alot just a little…..
Longtime reader, first time poster. Great website, btw. Anyhow, just wanted to chime in and say how interesting this particular post is. I definitely think “Buying a car” should be included as its own category on the right-hand side. Don’t you agree?
Well, I think that it really depends on the dealership. Most dealerships are actually gnawing on each others fingernails to pay the bills. Someone has to pay the 5k a month light bill, lol.
When you’re ready to buy a new car don’t go to the dealer until you’ve done your research at sites like kbb.com and http://www.truecar.com
to find the lowest price. Knowing the true price ahead of time is the only way not to get taken advantage of