Oh, one other thing: if you’re leaning towards new cars, a great way to save money is to buy a service loaner. Typically these will have like 3-6k miles on them but are otherwise brand new cars. They are treated like new cars in every respect, you just lose the difference in the mileage on the factory warranty. You can save thousands that way. Some dealers don’t use their own new cars as part of their service loaner fleet, but many do. Check with your dealer and see.
It won’t happen every time, for sure, but it’s a very good place to start. And it does happen on occasion. The last vehicle I bought for my wife I got, from an established new/used car dealer, for right at 10% less than KBB trade in value. They had just taken it in on trade that day, obviously paid far less than wholesale for it and were willing to make a quick buck. I was lucky, for sure, but timing is everything.
ETA: I’ve also bought several used cars at public auto auctions and would never pay wholesale in that type venue. Dealer auctions may be different, as they usually run through much newer cars.
When you decide on a car, check the odometer. That is, make sure the thing is set on total miles, not trip A or trip B.
A Toyota dealer screwed me out of quite a few miles that way. In the end, it didn’t really matter warranty-wise. However, had I checked it, I may have been able to get the price down a good bit had I known it.
Wait though…10% less than trade value is one thing, wholesale is another. Wholesale is what a dealer would buy it for at an auction, or, what the dealer “black book” value is on a certain vehicle (they do change monthly, and can be reflective of the season too…4x4 vehicles are worth more at the auction during winter, for instance).
Now, getting a car for less than trade is in fact, a really good deal. Typical markup on a used car is about $4-5000 above what they own the car for. In your case, they likely took the car in for quite a bit less than what KBB or other resources said it was worth as a trade. In dealer parlance, that’s called “holding on the trade”, which makes everyone (at the dealership) more money on a car deal.
Salespeople make commission, and it’s a percentage of the sale. One place I worked at paid equal percentages on the front end (the gross of the sale) and the back end (warranties, Gap insurance, rust-proofing, paint sealant, etc). This percentage starts at 8% front and back and increases with your sales volume. You can get as high as 18% front and back. If you’ve sold 20 cars for a total of $40,000 gross, you’ve made $7200 for the month, plus any “spiffs” (sell three cars on a Saturday, get an extra $500, etc). That is a REALLY good month. Once you’ve paid back your “draw” (the money the dealership pays you to live throughout the month…at this place mine was $600/week), then less 46% taxes (commissions are taxed like bonus money…unfair but true), what’s left is what goes into your account.
So on that $7200 month, minus $2400=$4800, less taxes= $2592 is what hits your account. So basically you made five grand that month. That’s IF you manage to sell that many cars under that pay scale.
Another place I worked paid 25% front end only, 30% after 15 cars, retroactive to your first unit. So, $250 for every $1000 in gross you sell. They also paid “chop checks”, which are bonuses (untaxed!) based on gross. $50 for $500, $100 for $1000, up to $500 max.
Hopefully this illustrates part of the problem with buying a car. Your salesperson is under IMMENSE financial pressure to sell cars. If you don’t cover your draw, you get fired. Or they roll it over into the next month, which puts even MORE pressure on you.
Winter is actually a good time to buy a car. So is the end of the year. End of year, there’s tons of incentives. Winter, it’s slow as shit and dealers will do just about anything within reason to sell you a car and not let you leave without doing so.
I’d be interested to hear how this happened to you. Your paperwork when you buy a car includes an odometer disclosure statement that is a legal document. If your dealer failed to check the proper mileage, and your odometer statement reflected “Trip A” mileage and not the actual mileage, you could easily sue them. That’s a really lazy service department that documented that mileage incorrectly if so, and that is a big deal. The dealer could run afoul of the state and lose their license to sell cars.
The disclosure statement listed the trip A miles. I didn’t notice it until I had driven the thing off the lot. I determined to go back and complain, but a jury summons was in my mailbox the next day. I got busy preparing for the day off work to report, and ended up on a murder trial for a week. I figured after over a week they might be able to say I put those miles on it, so I just let it go. I have bought two new vehicles since then, and I definitely checked those!
I’m still haven’t decided whether it was an ignorant mistake or treachery on the dealership’s part.
I like to get to the dealership about 30 minutes before closing time. It cuts down on a lot of the BS.
This thread has been timely. I too am in the market.
For various reasons my price cap is 36k (it won’t need to be financed either note). And I’ve had my eye on the Civic Type R (Floridian so yes they are new here). It, naturally, has an MSRP at exactly that level. And I’ve been driving a Civic SI for 11 years now.
Now, I know going in having done the research that this car is in high demand (and low supply, only 3K being made for '18, and apparently discontinued after this year), with a lot of dealers asking for several thousand over the MSRP.
So I went to my 1st dealer yesterday, and when I express an interest in it, he instantly spits out a price 10k over MSRP, indicating the high demand. I indicate a bit of skepticism, and after he prints out a sample cost form, I note it is only 6K over. As I wonder about getting another SI, 25 thousand (is 100 HP really worth 16 grand?), he then asks me if I would spring if it he chopped 2 more thousand off. I demurred again and after a bit more chat left with his card in my pocket. [He called at work today but I cannot take calls when on the clock] Good news is that they unlike other dealers have no waiting list, if I spring for the 1st 3 grand (applicable to the price but nonrefundable) I get the 1st one in my color that is available.
Should I try to push him down to the MSRP? If so how would you recommend I pursue things? My trade in should more than balance taxes and fees based on the form I perused. I’ll be going to a different dealer tomorrow note, will see what they say before I call him back.
I want to point out that for that amount you can get a Alfa Romeo
https://www.alfaromeousa.com/?campaignid=10771339&advertiserid=6315033_PPC&KWNM=alfa+romeo&KWID=43700017980898908_google&channel=paidsearch&gclid=EAIaIQobChMIwJ3OxO6U2AIVBqlpCh2etQOuEAAYASAAEgKWPvD_BwE#
which iirc is one of Car & Driver 10 Best this year.
Never pay more that sticker. Ever. Try a car broker.
That’s my bad - I use “trade in” and “wholesale” interchangeably. I would imagine that, to those in the business, there is a big difference!
I didn’t know this, but am finding out how true it is. As mentioned in other threads, I’m shopping for a large truck (3/4 ton w towing specs). I looked at a diesel 2500 last night with a sticker price of $58,000. By the time I left the dealership it was down to $49,000. It’s a 2017 model with some “not in demand” features* so I expect they’ll give a little more to move it before the end of the year. So I’m going to wait them out to see who blinks.
Wish me luck, I’ve been shopping and bargaining now for 9 months. I really don’t “need” the larger truck until March, so I’m not in a hurry.
*Long bed, without interior carpet. Not a big seller in the city.
<Gasp>! An Actual work truck? I’m kind of jaded because I live in an area surrounded by “Cowboy Cadillacs”.
As you note, the Type R is a very limited production car, similar in many ways to the Focus RS (not the least of which is that it took forever to migrate across the pond as an American model). My experience in situations like this is that the 10k markup over sticker is a typical tactic with cars like this, and that dealers will probably only ever see one, MAYBE two of these cars, which means that there are very few in your locale (unless you live in like Los Angeles or something). My advice: make them an offer of a thousand over sticker, plus taxes and fees, cash money, out the door.
The issue you may run into is that if you try to wait them out, you may never get one, and these are typically not a car I would want to buy used as they get thrashed by their owners.
Is the extra power worth the extra money? The enthusiast in me says yes…by all accounts the Type R is an order of magnitude more fun to drive than a regular Si. But it’s your money. If you do end up buying it, post pics, please! It’s a special car.
Are you sure that the Alfa that won that award isn’t the 505hp Quadrifoglio? And frankly, every single review I’ve read about any of the current crop of Alfas always includes caveats about reliability. Car and Driver and Motor Trend have both experienced issues, electronic and otherwise, with every new Alfa they’ve driven…and it isn’t like Alfa Romeo’s quality control, or lack thereof, isn’t a known issue. Their resale value has to suck as a result of that…Hondas, not so much.
As far as not paying over sticker, well…this isn’t a Corolla we’re talking about. It’s a very specific, rare, purpose built sports car. And I suspect that a broker wouldn’t be able to get you one any cheaper (if they can get one of these at all) than you could get for yourself with cash money in hand, ready to buy.
I figured as much. It’s all good. Common mistake.
Sounds like a diesel work truck with vinyl flooring. While $9k off sticker is a good deal on a diesel 2500, I think you’re right to hold off for a bit longer, perhaps almost until the last couple days of this month, then offer them their $49k out the door (includes taxes, fees, etc) and see what they say.
Update: got out the door quotes from four dealers. Lowest was about 2000 lower than the highest. Shared the lowest quote with the other three dealers, all of whom refused to meet or beat the lowest price. Strange, that. Will have to drive three hours and into another state to get the lowest price but we will save about 600 bucks so I’m cool with that. Thanks all!
Good deal! I don’t think it’s so strange for the other dealers to not match that price. Subarus are an extremely hot brand right now, and almost all of their vehicles sticker at right around 30k. As a result, they’re thinking “We will sell it to someone else for the price we’re asking if this guy won’t”, especially if the more expensive quotes came from busier, urban-based dealers as opposed to a slower one that you had to drive awhile to get to.
Thanks for your advice (in this thread and others). They came down to $47,600 and I bought it. (It was sort of buried in the details, and they raised the offer for my trade in considerably, but using the most common trade-in offer I teased out 47.6 as the “real” price. I also got a few freebies like running-boards etc.). It was diesel, but one of the nice packages with heated 10-way seats, all the fancy Bluetooth/nav screen doodads, autostart, and a dozen other goodies I’m too cheap to actually order. It definitely wasn’t a work truck. Looking at the odd selection of options, I got the impression it might have been ordered and then not sold.
What a strange combination of options…all that and no carpeting? Hmmm. I don’t think I’ve seen that setup before. But you did get a good deal. A really good one, in fact.