Specifically, I’m interested in used cars. I haven’t gone car shopping in a while and I’m wondering what effect the internet has had on pricing and negotiating. Do dealers normally list their lowest price on the internet, their starting position or somewhere in between?
If you gone used car shopping lately, I’d like to hear about your experience. Thanks.
To a degree but not like they used to. You name a price you want to pay, they “run it past my manager” where basically they talk baseball, kids and everything except the price and them come back with a figure just under the sticker price ------- that sort of thing. But between the internet and lemon (and associated) laws, it isn’t like it used to be. Best negotiating tool is bringing along your own mechanic and asking them to put the car up on the rack.
A few weeks ago I bought a used brand-L vehicle from a brand-L dealer. I got the asking price down 6% almost at the start, and another 7% upon further inquiry. And this was off a price that was already very competitive (judging by weeks of research on AutoTrader and Craig’s List).
Yes, there where 2x where he “had to check with the sales manager”, but no hemming-or-hawing or gamesmanship; it was either they could or they couldn’t, and communications were very straightforward.
YMMV based on your salesperson, even at a specific dealer, I think; ours was very laid back.
The car is actually for my son, a college student without much, if any, credit history. He can get a car loan from our credit union, of which he is a member at around 4%. Due to his youth, he wouldn’t qualify for any of the exceptional deals that new car dealers offer.
But private parties can be worse. People make a living out of flipping stuff on CraigsList, for example.
An informed person shouldn’t worry about buying a used car from a use car (only) dealer. I’ll support your position a little and state that I’m quite informed, but have only every completed a transaction at a used-only dealer once in my life – I was 18 and uninformed, although there were no issues at all, fortunately.
I suppose this simply means you have to be an informed buyer, regardless of whom you purchase from.
The whole “start at an astronomical asking price and just expect to be haggled down” routine is definitely becoming less common, but it depends on the dealer. Some of the dealers are realizing that listing reasonable asking prices on the internet means that even though they might be missing out on the occasional sucker who pays full asking, they get a bigger customer base and cars move off the lot way faster.
I think the best strategy these days is to try to do as much negotiation as possible over e-mail before you even show up. Some dealers will be pretty dead set against this and will try anything to get you in the door for the full Lundergaard treatment, but I’d just avoid them if at all possible. With newer used cars, you can probably assume they’re going to be pretty fungible in terms of condition and so talking to multiple dealers and getting “bids” isn’t a bad idea either.
Private party transactions can be a pretty good deal, although I agree they require a little bit more caution in terms of looking at the vehicle history and such than buying from a reputable dealer. The one drawback is that the paperwork to do a private party transaction on a higher dollar used car with financing on both ends can be pretty daunting. A few years back I bought a 4 year old pickup from some guy off craiglist and though I paid probably about $5k less than I would have at a dealer, it took about two weeks for my bank and the seller’s bank to get the funds and title transfer worked out.
My experience is that most dealers have accepted the reality that buyers have access to a lot of online information that works in their favor. If you walk into a dealer armed with Carfax printouts, prices from Edmunds and Kelley, etc., they’ll sigh and make a perfunctory attempt to dispute your research, but they won’t just refuse to acknowledge it.
There is one dealership in my town that is still notorious for playing hardball with buyers (when I pointed out that their price on a used car was $1600 above Black Book, the salesperson replied “What’s ‘Black Book’? I’ve never heard of it,” with a straight face). But in general, I think starting prices are somewhat better and the haggling has gotten easier. YMMV.