Who is good at negotiating a new car purchase?

[Stressy]

Couple of items,

Don't say you are paying cash. Say that you have not decided, and it depends on the offers. Dealers often get paid on the financing side too, so they may deal on the price more if they get that $, you just need to make sure that you don't have a prepayment penality.

Second, shop your configuration to the Internet sales rep at multiple dealers.

Determine options you are willing to accept in addition to your must have items.

Dealers make a lot of their profit with ads, such as tint, weather protection, tire and wheel warranty, extended warranties, etc, but they also tend to have the most flexibility with these high margin items.

We skipped the dealership BS with our most recent purchae. Tesla sells direct only.

Harry

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Want to name the car and spec?

Also ask them if they prefer cash or finance.

A buddy of mine got a crazy deal that was improved by taking their 0.9% financing.

The small print of the financing said it could be repaid in full after 3 months.

So three months later he repaid the financing. The tiny interest bill was made up for in spades on the additional discount.

Agree with both of these posts. If you like your price, then find out what they will do with financing. They don't care about cash. You can agree with the financing (so they can make SOME money) and then pay it off later. I did this same thing nearly a year ago. Without going into the whole story, the dealership needed to make *some* money and at the rate I was negotiating they weren't going to. They tacked a measly 150.00 on to my bottom line price and asked that I take the 3.25 % financing. I used to work in lending so I understand buy rates with lenders and what they could achieve with me signing at the dealership. I allowed that to happen and simply paid it in full later.

 

[winger]

Check KBB, Edmunds, etc. what you would pay for that car in your area. You can then tell if you got a good deal. We recently purchased a 2017, got $3K mfg credit, $2K dealer credit, and $750 credit for financing it. Plugged the numbers into KBB and Edmunds and was very pleased with the deal. We paid the car off a few days later, incurring about $50 in finance charges. I also believe, but am not sure, that 'out the door' does not include taxes and license fees.

In my experience, the Costco program is a joke. The most recent experience resulted in the Costco dealer presenting us with 4 cars that did not include all of the bells and whistles we wanted and when I asked for a price of a car that did, no response. Never again will I waste my time.

Ingrid

My sister got a.bad deal with Costco a few years ago on a Camry, so she swears on not going back to them again.

 

[Talent312]

Check out https://www.truecar.com
Enter your zip code, make, model, trim, and then, scroll down to see:
(1) their i-net price, (2) avg mkt price, (3) factory invoice, (4) MSRP.
You can switch between local & national pricing.
Note: Registration is not required, but it's free.

When I bought a new car in 2016, I went to the websites of area dealers.
I checked their inventory and i-net prices. One offered a "special" that week.

IIRC, AAA and Am-Ex also had car-buying services, which I did not use.
.

 

[FLDVCFamily]

I am! I learned how online though. Google "how to negotiate a car purchase". One of the articles that came up said to never through out a number, and when they ask you what your ideal price is, say "zero" lol. I used this method, and we got our last new car way below what we were even aiming for. You never know how low they will go if you throw out what you're willing to pay first.

Our last used car came from Carvana. It was a great experience. The price is set, but we found a $500 off code online.

 

[Bucky]

I was in the auto business for many years so take my advice or leave it.

I sounds like you have no problem working directly with the dealer so that is a plus. If you are physically going into a dealership ask to speak with the new car sales manager. That way you take the going back and forth out of the equation. He will assign you a salesperson to show you vehicles and do any test drives but he will be the one you are dealing with. I recommend doing it this way because a salesperson or internet dept may let you walk if they cannot make a deal but unless they are physically going to lose money on a deal, a manager won’t. Salespeople are paid a commission on each particular vehicle they sell. Managers get a part of the total dealerships sales and usually make a bonus when exceeding goals.

It doesn’t matter if you are paying cash of financing when negotiating the price of the vehicle, in most cases. There are certain cases where you must finance to get a specific rebate. Just make sure there is no pre payment penalty and make one payment and then pay the contract off in order to retain that rebate. In today’s age of 0%-0.9% financing its not like they are going to make a killing. The lender may pay the dealership a flat rate of up to $100 per contract.

Invoice information is all over the internet, easy to find. The dealer will usually get 2% of that as a dealer holdback (profit). Which in your case could be $900 or more. The real investigating needed is to find out what type of rebates are out there on your particular vehicle of choice. There are the factory to buyer rebates and the factory to dealer rebates. At this time of year there are usually factory to dealer rebates you may be able to take advantage of.

To make a long story short if it was me I would offer a price of 15% off of MSRP +$3000. For example if it was a $50K vehicle I would offer $39.5K I would worry about any out the door price since you can’t control tax & title. But, you can control any document fees they may throw in. They can be anywhere from $400-900 in some cases. After I had negotiated my best deal I would come back and say, by the way, I’m not paying any documentation fees. In most cases they will deduct it from the price but still show it.

There is no 20-25% markup on any vehicles out there that I know of but you can take advantage of rebates and factory to dealer incentives. My starting point might not get you the vehicle but it will make the manager come back with another offer. If he is willing to let you walk it is usually his best price. At this point in time you have to make a decision if you can live with that price of not.

 

[WinniWoman]

I agree- never tell them you are paying cash. Just make like you will be taking out a loan and see what they offer. The best rates come from the car manufacturers themselves. The dealers skim off the top of the outside bank loans. If the rate is very low, you might consider keeping your money in the bank and only withdrawing it to make the car payments, but the rate would have to be lower than what you get in the bank, so that is not likely. If you can pay the loan from income and the rate is fairly low- like under 2%-and invest your money elsewhere where you get a good return, then you might decide to take out the loan.

When we picked up our new used car 2 weeks ago, we told simply told them at that time we decided to pay cash instead of the loan. Of course, they told me they thought I would be better off taking out a loan. I told them why would I take out a loan for 2.49% when I am only getting .75% on my money allocated for the car?

And- don't take out those expensive warranties. If you so desire, you can always get one later elsewhere when the cars warranty expires.

I think car buying is much easier today. You go on line to the different sites and do the work there beforehand. (sites like True Car, Autotrade, CarMax, for example- and also the dealers' websites). Have them send you quotes. Once in the dealership, you can try a bit more negotiating. Sometimes they won't budge, but you can get the manager to throw in some things like the cargo and floor mats, touch up paint for the car, and a full tank of gas- stuff like that.

Oh and check out sites like Edmunds and Consumer Reports and Kelly Blue Book so you have an idea of what the buying price should be and for reviews of the car you want. I never buy a car (or appliance) that doesn't have a recommendation from Consumer Reports.

 

[geist1223]

Taxes on a car buy? Oregon also lets you keep your plates and transfer them to the new car. This saves a bunch on licensing and registration.

 

[ronparise]

$39,500 is "out the door" - that means the total with all fees and taxes.

Dave - I just want a new car.

I have been looking around - availability of the car and model I want is low.

Im with you

I hate the car buying experience.

I recently lost the argument with my wife, that we needed a new car (vs used) So off to the new car dealership.. we were in the same position as you.. cash buyers. The sticker price was about $4000 more than their offer. I asked if they could do better and was told that they post their best price and dont negotiate after that.. I had the money, so I accepted, signed the papers and drove home.

I understand that I could have gone to other dealerships, and to the internet and probably could have gotten the car cheaper, Call me a sucker but whatever my refusal to negotiate cost me, it was worth it.

 

[SMHarman]

I agree- never tell them you are paying cash. Just make like you will be taking out a loan and see what they offer. The best rates come from the car manufacturers themselves. The dealers skim off the top of the outside bank loans. If the rate is very low, you might consider keeping your money in the bank and only withdrawing it to make the car payments, but the rate would have to be lower than what you get in the bank, so that is not likely. If you can pay the loan from income and the rate is fairly low- like under 2%-and invest your money elsewhere where you get a good return, then you might decide to take out the loan.

When we picked up our new used car 2 weeks ago, we told simply told them at that time we decided to pay cash instead of the loan. Of course, they told me they thought I would be better off taking out a loan. I told them why would I take out a loan for 2.49% when I am only getting .75% on my money allocated for the car?

And- don't take out those expensive warranties. If you so desire, you can always get one later elsewhere when the cars warranty expires.

Another advantage of finance in the first 18 months of the rate is low enough on gap cover then it is is insurance company money that pays up for a total loss during that time.

See the gap cover pays out the difference between the loan and the primary insurance value. Often significant at that time on a cars life due to tax / fees / day one depreciation.

 

[presley]

I've had numerous people tell me that they just call dealerships and tell them what they want and how much they are going to pay. They do ask for the sales manager right up front. If they cannot sell at the price you will pay, you just move on. No need to negotiate.

Not saying you are paying cash, not telling if you have a trade in and not telling how much you want to put down are all helpful in getting the bottom price. When I bought my last car from Toyota, they were recovering from a lot of bad press and gave me 0% financing and 2 years of free car maintenance. It was cheaper for me to buy a new car than a used one. It was insane. Just do all your internet research and see what your car is selling for. Be open to traveling to pick up your car. You may save thousands of dollars by buying your car further away.

 

[DaveNV]

My sister got a.bad deal with Costco a few years ago on a Camry, so she swears on not going back to them again.

I don't know the details of this situation, but since Costco doesn't sell cars, the "bad deal" was from the dealership, not Costco. If she wasn't satisfied, did she walk out? Did she complain to Costco about her experience? Car dealers are supposed to abide by their agreement with Costco, and if they don't, Costco needs to know about it. They will remove a dealership from the program if they don't follow the agreement. If the deal she got wasn't to her satisfaction, she should have done more research.

Dave

 

[VacationForever]

I often put in the exact specifications that I want on a new car and it goes into the factory HQ to manufacture with it. I believe I lose leverage in bargaining for a better price because of this. Only once they gave me 1.5K off the MSRP. Has anyone does that and how do you negotiate for a good price?

 

[klpca]

I don't know the details of this situation, but since Costco doesn't sell cars, the "bad deal" was from the dealership, not Costco. If she wasn't satisfied, did she walk out? Did she complain to Costco about her experience? Car dealers are supposed to abide by their agreement with Costco, and if they don't, Costco needs to know about it. They will remove a dealership from the program if they don't follow the agreement. If the deal she got wasn't to her satisfaction, she should have done more research.

Dave

Our last car purchase was through Costco. We were happy with the experience - no haggling. We bought a 2016 Ford Edge in Jan 2017. The manufacturer rebates were substantial, as was the financing - 0%. We wanted a specific configuration so I went on Ford.com and found exactly what we wanted and they drove it down from LA. It was the easiest car purchase ever.

 

[Luanne]

We worked with a broker a couple of times and were very happy. We knew exactly what we wanted, and he found it for us. No hassle, no fuss.

 

[DeniseM]

To make a long story short if it was me I would offer a price of 15% off of MSRP +$3000. For example if it was a $50K vehicle I would offer $39.5K

I am confused by your example:

15% of $50,000 is $7,500

$50,000 - $7,500 = $42,500

$42,500 + $3,000 = $45,500

 

[Wyominguy]

Denise,

Check out Truecar ( https://www.truecar.com/#/) for typical prices paid for any car in your area. You might even find a dealer that is in their network. I used this information a couple of years ago to get the best prices and then took that to the dealer I wanted to purchase the car from. I saved some decent $ that way.

Neil

 

[PigsDad]

I am confused by your example:

15% of $50,000 is $7,500

$50,000 - $7,500 = $42,500

$42,500 + $3,000 = $45,500

I think Bucky meant to say the discount should be 15% of the MSRP plus $3000. That would make it the total discount $7500 + $3000 = $10,500 discount. So $50,000 - $10,500 = $39,500 offer price.

Kurt

 

[DeniseM]

OK - thanks - he said "offer a price" so I didn't get that, but I do appreciate his taking the time to write an informative response.

 

[amycurl]

I often put in the exact specifications that I want on a new car and it goes into the factory HQ to manufacture with it. I believe I lose leverage in bargaining for a better price because of this. Only once they gave me 1.5K off the MSRP. Has anyone does that and how do you negotiate for a good price?

The first time we used CUABS, the dealer they found ended up ordering our car and we had to wait for it to come directly from Germany. (It was a VW Passat, pre-diesel scandal.)

 

[amycurl]

Apparently, Consumer Reports has now entered into a partnership with TrueCar and offers a car buying service as well. I *totally and completely* trust CU, so would feel very comfortable using this service:
https://www.consumerreports.org/cro/car-prices-build-buy-service/index.htm

 

[PigsDad]

OK - thanks - he said "offer a price" so I didn't get that.

Yes, it was confusing as written.

Kurt

 

[CalGalTraveler]

My sister got a.bad deal with Costco a few years ago on a Camry, so she swears on not going back to them again.

Costco can be hit or miss depending on the car and the dealers. I tried to use them in 2006 for a new Suburban and it was not the best price. Similar to rental cars, I look at Costco but still shop around.

With kids in college, and working from home I hardly drive anymore. I will consider leasing my next vehicle because leasing deals often outstrip purchasing if you keep within the mileage limits.

 

[DavidnRobin]

Dave - I looked at the Costco program, but I'm unclear abou how it works - dumb it down for me.

Added - sorry - hadn’t read thru thread before posting.

The Costco site describes the process .
Identify the car you want (including options - essentially the car package) - if the Dealer is part of Costco system, then go to that Dealer and use their Costco person at stated price. (No bargaining on the Identified car - including options, but there will be typical add ons - window tint, undercoat etc)

Be forewarned that they will still try and upsell you- also make false claims.
In my case - Lexus RWC CA - I was told that this was Costco price by non-Costco rep - I forced the issue requesting to actually see the Costco termsheet - saved $700.

It was however the car that Angel Pagan was riding in during the 1st WS parade... ahhh... those were the days. I still find confetti
Go Astros! Do not let the Dodgers win the WS !!!

 

[RX8]

I am going to buy a new 2017 car.

I am going to pay cash.

The window sticker price (MSRP) of the car I want is $44,075

The dealership's first offer to me is $39,500 - out the door.

What would you offer?

What you have listed doesn’t really help to know if you got a good deal. Don’t confuse rebates with a dealer discount.

It would be better to know MSRP and what the selling price is before tax, license and rebates. The rebates are going to be the same regardless of the price you pay. Tax and license may vary only slightly. This would tell you the true dealer discount. Another recommendation, if it truly a great deal the dealer should be fine showing you the vehicle invoice, if you ask.

 

[DavidnRobin]

I don't know the details of this situation, but since Costco doesn't sell cars, the "bad deal" was from the dealership, not Costco. If she wasn't satisfied, did she walk out? Did she complain to Costco about her experience? Car dealers are supposed to abide by their agreement with Costco, and if they don't, Costco needs to know about it. They will remove a dealership from the program if they don't follow the agreement. If the deal she got wasn't to her satisfaction, she should have done more research.

Dave

This is correct - see my post. Treat car dealers like TS salespeople - get it in writing- ask to see the documentation, due your due diligence.


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