I plan to buy a new New Beetle to replace my old New Beetle in the next month or so. I am not very experienced at this, and have several questions.
I plan to pay cash. Do I tell the dealership that up front or wait until the end of the price negotiations?
I have my old Beetle and a Mini Cooper to sell. I have a family member interested in one, and a friend in the other. Am I better off financially to sell them outright? I was thinking of using the Blue Book price.
Why is buying a car so complicated? Ok, that one is rhetorical.
First, selling your other cars yourself is probably better, as a dealer will give you much less than the retail blue book. You’ll notice it lists two or three amounts for each vehicle, usually “retail”, “trade-in,” etc.
You don’t need to talk about money up front- wait until that time. Spend as much time picking out exactly what you want, then start negotiating on price. Once you have the offer you want, tell the salesperson you’ll just write a check.
Have fun! Car shopping can be fun, rather than excruciating. Do you have a dealership you already like and trust? If not, get a recommendation from someone (or advice where NOT to go!).
Be aware that paying cash does not necessarily inspire a discount. My understanding is that many dealers hope to make money off the financing and might not see full payment up front as a better deal for them. Perhaps all the more reason not to disclose your method of payment until you’ve reached a price agreement.
I have heard this too. So a different strategy might be to ask if there is any penalty for paying off early. Then allow them to finance it (to get the better deal) and the next month pay off in one big check.
I would suggest doing all the negotiating via email with their internet sales person. Don’t waste your time going in to the dealership. Internet customers, I have read, are assumed to be more savy and have done their homework, so there tends to be less BS.
I used Fighting Chance to get the lowdown on the state of sales for my car (ie - are they selling well and therefore can expect little negotiating room, or are sales way down and I can negotiate hard?). How much is the dealer invoice? What holdbacks does the dealer get? IOW, exactly how much is this car costing my dealer so that I know exactly how much is fair to pay? IIRC, I used them to contact dealers in my area (up to several hundred miles away) to get an initial quote, and then I used those quotes to drive my price down (So and So is offering x. How much can you beat that by?)
I didn’t step foot in a dealership until I went to pick up my car. Got exactly what I wanted at invoice. And the entire deal was done from via email. I was willing to drive to different cities to get my car. Don’t assume you have to choose from dealerships in your town. Don’t pay doc fees! One guy had a better price than the dealer I went with, but he would not get rid of $100 in doc fees. So, I went with the other dealer on principal. (The difference was $200 in price.)
Don’t tell them you’re paying cash. Don’t trade in your cars, sell them yourself.
Don’t buy a warranty from the dealer! If you walk in and anything is different than what you negotiated, walk right back out.
Use Edmunds to figure the sales value of your cars, and to see what others are paying for the car you want. Find the car you like, then use Edmunds to allow a couple VW dealers to make you offers via the internet.
Do not mention how you will pay. In fact, if they offer you 0% finacning go for it.
Do not buy any undercoating, overcoating or extra warranties.
Absolutely don’t tell them you’re paying cash until it’s time to sign the financing. They will make a very good deal on the car if they think they’re going to be able to get more blood out of you on financing charges. So the minute they hand you the documents to sign for the financing, say, “You know, I think we’ve got a good deal here. I’m just going to go ahead and pay cash.”
I am an internet salesman at an Audi dealership. Frankly, in some of the posts there still exists some of the apprehension from the old days of dirty car salesman and their tricks. The world has changed quite a bit and the way we do business now is nothing like it used to be. That being said, I commend Ejsgirl. Buying a car can be a fun experience with a little effort on your part.
During the sales process there are three ways a dealership can make money.
One is the gross profit on the sale price of the vehicle. Since our invoice cost is public knowledge, it’s fairly easy to determine what you feel is a fair price.
Second is finance profits. The dealership is allowed to mark up the interest rate offered by the lender and keep the proceeds. With a little effort, you should be able to find out what the buy rate is in order to avoid the mark up. As a salesperson, I have no problem telling customers this information. Finance profits are also made in other “products”. Most of these are worthless. Some have some value to a specific set of people. In general, avoid these products.
Third is on the trade-in. We view trade vehicles as a commodity. We look at auto auction reports to ascertain what we could buy a similar vehicle for. The trade value is always less than the private party value, though sometimes not by much. In some states you receive a tax benefit on the trade and when you factor the tax deduction and time spent, many customers opt to trade because it ends up being a wash. YMMV.
As a current VW owner there may be some incentives for you to finance the new vehicle, even if it is for only a month. VW’s retail loans are all simple interest, with no pre-payment penalties.
My company has a Volkswagen division right down the street, so if you have any specific questions I should be able to get them answered for you. You can PM me if you want me to look into the deals they have going on any further.
