Haggling With Car Salesmen Over Price

Factual Questions
1

I have never had much luck in getting a new car dealer to come down on the price.
They may include a factory incentive or some such but never to a significant amount. On one occasion I had a very specific budget and could not move from what I thought was a fair price. The dealer told me that he’d sell the car to someone else and to beat it.

However, I have heard from many people that they have talked the dealer down several thousand dollars.

So the question:

Can you really get a new car for a lot less than MSRP? Is the amount of haggle room different by make, model, or price of the car? Are people who claim to have saved thousands really just victims of what the salesmen want them to think?

2

You might be interested to read Confessions of a Car Salesman. Or, skip to chapter 9 for car buying tips.

3

You have to have the facts on your side when attempting to haggle. A popular model, early in the model year (summmer), will be easy to move at MSRP or even a little better. Wait until later in the model year (the next winter/spring), towards the end of a month, and the dealer will be more motivated to reduce the cost.

There’s a lot more to it than what I’ve written above. You don’t want to pay for unwanted features or procedures, for example.

There’s more room to move on used cars, especially cars that are less than a few years old.

4

Start off by regarding an automobile as a tool for transportation and not the apple of your eye. In short, don’t want the car too much.

Buy before you absolutely have to so you can walk out if the deal doesn’t suit you.

Remember, the salesman wants to sell the car. However he js willing to work hard to preserve an extra $500 on the price. That’s a pretty good fractional increase in his commission. To you it’s only $500 in a total $20000 and if you want the car badly, well … He has all the advantage.

Decide up front what you can afford to pay and stick with it. Look around until you find something that fits your purse and your needs.

I don’t haggle any more since I don’t have to but when I did have to I would decide on what I was willing to offer and stuck to it as cloesely as possible. It must be a reasonable offer. The dealer will not sell the car for a price that doesn’t give him a reasonable profit. If he did, you wouldn’t have a dealer to buy from before too long.

5

If you are not willing to not buy a car, you will pay more for a car.

When you decide to settle, write a check immediately for the total amount you intend to pay. (finance elsewhere, by the way.)

Don’t bring another check with you.

Don’t be even a little bit shy of saying, OK, guess I will look elsewhere, even after you write the check.

Tris

6

Don’t buy a new car from a dealer and then you don’t have the problem. Even when the dealer shows you the invoice it does not mean anything, they have other incentives that are not reflected on the invoice. They also make a big markup on any addons that they can talk you into and if you do your financing through the dealer you are asking to be ripped off.

Obviously everyone cannot buy a used car or we would run out of them, but the sensible solution if possible, is to buy a used car from a private party, after having it inspected. The dealer price on used cars is enormously inflated. A salesman can make 10 times as much selling a used car as a new one.

7

One variable is the model you are buying and the options. If you are purchasing a low-end car with few options the dealer may not have much room to go. The more expensive cars have a lot more margin, and they can usually come down on the price on them. The low end stuff is priced to get you into the showroom to look at the expensive cars anyway.

You also have to remember, and this is key, that the dealer is better than you at this game. He’ll sell more cars in a month than you’ll buy in a lifetime. You wouldn’t expect a beer league golfer to go against the club pro and win. You just do your best not to get hurt too badly. As someone else said, the only way to win is not to play. If you buy a late model used car, the loss belongs to the original owner, and you can break even.

8

Absolutely. The trick is not to negotiate down from the MSRP. The key is to negotiate up from the dealer’s invoice price.

Even if you were to buy a car for the “dealer invoice” price, realize that the dealer is still making money on the car with dealer incentives, etc.

Take the dealer invoice, add the non-negotiable “destination charge,” and tell the dealer you’ll pay a reasonable profit on top of that. IMHO, “reasonable” is about $600 (for a $30K vehicle).

I bought a new Toyota 4Runner from a dealer for $600 over dealer invoice + dest charge. I bought my wife a new Subaru Outback for exactly dealer invoice + dest charge.

For both of the negotiations, the MSRP never even came up. (I take that back, at the very beginning of negotiations for the 4Runner, the salesman started to say something about the MSRP, and I just laughed at him. He didn’t mention MSRP again.)

Don’t be afraid to walk out if negotiations don’t go your way. I walked out of two Subaru dealerships and one Toyota dealership before making those deals. For the Toyota, the dealer so wanted to make the deal that he trucked the vehicle I wanted in from out-of-state (for no additional charge).

Also, you shouldn’t be discussing dealer financing, trade-in, or any other superfluous issue until you settle on a bottom-line price for the new vehicle. If you negotiate properly, they won’t offer you much for your trade-in when you do bring it up. This is a sign that you got a good price on your new vehicle. (Then sell your old vehicle yourself–you’ll get a much better price.) Arrange for your own financing before going to the dealer, and you don’t have to go with the dealer financing. If they offer you some great financing deal AFTER you settle on a good bottom-line price (possibly due to some incentive they’re getting), you can always choose to take it then–but don’t go into negotiations needing the dealer financing.

Also, don’t pay for any dealer add-ons, paperwork charges, etc. They will probably tell you that they charge “everyone” for these. Politely tell them that you will not be paying them. If they refuse to budge, walk out. For my Toyota, they tried to spring those on me twice. They told me that every customer pays them. If that was true, I was their first customer not to pay. (And it wasn’t true–every car buying advice site tells you to refuse to pay such charges.)

There’s no reason to be rude or aggressive. Just have all your facts in order and be firm. You will save thousands of dollars.

To find out the dealer invoice price, check out Edmunds and Consumer Reports (the latter sells reports). Read advice from Edmunds and Cars.com. When negotiating with the dealer, feel free to ask to see the dealer invoice price for the vehicle in question. By your research, you’ll know if the figure is realistic. (Don’t forget to add factory options into the figure–they are listed on the reports noted above.) If the figure is B.S., bring that to to the salesman’s attention. He may find an “revised” invoice report at that point. :rolleyes:

One more piece of advice. Don’t buy from friends. I bought my first vehicle from a close friend of the family who owns several car dealerships in Texas. I actually drove the SUV I bought from him back to New England because of the “good deal” I was supposedly getting from him. However, while I didn’t exactly get completely screwed over, I didn’t get a fantastic deal, either. I ended up paying for all kinds of dealer add-ons, paperwork charges, etc. (I didn’t know better, then.) Even if I had known better, it would have been difficult to negotiate firmly with such a close family friend. I wouldn’t have wanted to make trouble between the dealer and my father. I’ve gotten much better deals from strangers.

9

I used to use many of the tips above but in recent years (last 4 cars for family) I get my quote from the Internet and then just go pick up the car. Several of these types of services are available and they eliminate the hassle. You order the car and see who within your predetermined area offers you a price you like. Go to the dealer and pick up the car; decline all the “extras” including extended warranty which is much cheaper from other internet sites–even for the manufacturer’s warranty.

As a specific example, I bought my last car–2006 Honda Odyssey minivan–for $100 over Edmund’s invoice from Honda of Lisle (10 miles away) when my local dealer (McGrath Honda, St Charles) let me walk at list price. (“Sir I have people in line behind you to buy the car at list…”) They then made the mistake of calling me back but it was way too late…this particular deal was way below Sam’s Club, e.g. . Don’t worry about what a dealer paid for a car–what you are interested in is getting it for the lowest price possible, whether that is over or under the “invoice.” Use an independent source if you are interested in what the invoice is, but that’s not the whole story of the cost of the car to a dealer.

Negotiate what the number is on the check that will let you drive the car away with no further obligation to the dealer. That’s the price you are paying. Your head will swim with the way the dealer calculates this but you don’t care.

Go to Edmunds and visit the chat rooms for the car you want to buy. There is usually a subsection for “Buying Experiences” or similar, and that’s where you’ll get great tips for your area. People come from all over the country to Honda Superstore of Lisle, apparently. (Not a recommendation from me; I don’t know them from Adam except I did buy my car there w/o hassle)

Also, since the new car and the service department have their own books, I have found it’s a myth that a service department cares where you bought the car. I don’t know if this is true everywhere.

I pay cash for my cars but in any case don’t do financing at the dealer’s and don’t do a trade with the dealer unless the state tax advantage clearly makes it worth it. Have your financing arranged in advance so that from the dealer’s standpoint it’s essentially a cash deal. It will make it impossible to figger out what you are actually paying for the car itself if you muck up the paper with financing from the dealer. If you must do a trade there say you are not and then just ask at the end how much difference your trade will make. A good deal on the new car with a bad deal on the trade is just a bad deal.

10

The last couple of vehicles and a 5th wheel camper I bought I did pretty good, at least I didn’t get hosed. The idea was not to give them a price I was willing to pay.

Basically I’d go in and say I would give them one chance to make me an offer. It was an out the door price, sales tax, fees, a tip for the pizza delivery man, whatever they wanted to put in it. It was only the total price I was interested in.

They’d come out with some number. What ever it was I’d get up, shake thier hand and say, “Well, looks like we’re just too far apart. Thanks for your time.” And start for the door.

Of course they’d grab me and start in with some crap about what did I want to pay? I’d come back with something like, “It doesn’t matter what I want to pay, you know what you have to have and it’s evidently more than I want to give.” And start for the door again.

It would go on like that for a bit. They’d try again and I’d be deeply saddened by the thought that I’d never be the proud owner of whatever it was.

When they got down to where they started saying things like, “Take it or leave it,” then I’d start hinting at what I might want to pay. And that is where the real haggling started.

The best time, I understand, to try this is at the end of the month. Thier incentives are often on the bubbble at this time. Another sale or two can jump them up into the next level, or something like that. A friend of mine is the controller for some VW lots in OK and told me about that.

And sometimes they just need to make a sale. Be ready to walk, never, until the last commit yourself to a figure and remember that you don’t have to buy it, but they do have to sell it.

11

Do research, I was with a buddy of mine and we walked into a dealer. He told a sales rep he wanted this car which was worth this much and told them they would make X ammount of profit. And said they had 15 minutes to put it together. Fastest car buying experience i have ever seen.

12

In my experience, some salesmen are very stubborn. I always look up the Edmunds.com TMV price and use that as my target price. On the second-last car I bought, the salesman wouldn’t meet my price, so I walked out. He ran all the way out to the street and caught me as I was getting into my car and agreed to my price.

On the car I just recently bought, one salesman refused to go less than $1,000 over MSRP, so I walked out. He let me go. Then I tried submitting a request for an internet quote, and two different dealers quoted $100 under MSRP, so I ended up buying it from one of them. So there can be a wide range, depending on the dealership, whatever internal logic the salesman and/or manager is using, and I imagine their mood at the time.

13

Pretty much what others have said. Ignore MSRP’s. Do some online research and learn the invoice prices. Based on that, pick a figure you’re willing to pay. Offer it to the dealer. Be willing to walk away if he says no. Go to another dealer and repeat.

14

I hope you mean “invoice” because these figures for MSRP mean that you didn’t get a good deal – not even close. In fact, you overpaid, and by a helluvalot.

I never acutally heard that myth. Common wisdom would say there’s no reason at all that a service department would care where you bought your car, or even the make of your car (the local Nissan dealer brags that they service all makes). The dealer is more likely to make a larger profit on you over the course of three years visiting the service department than they are on the profit for the vehicle they sold you. Yeah, even if you have something like free maintenance for the first 50,000 miles, the manufacturer still pays the dealer. That’s just maintenance. Look at post warranty profits, too.

15

It really depends on how much you know, how much you want to know, how much time you want to spend researching, how many lots you want to visit, how many salesmen you want to haggle with, how many Web sites you want to visit, etc. The list goes on and on and on. Some people live for this stuff. They love cars and they love bargaining and researching and they often get good deals. I know next to nothing about cars, I bargain a little, and I knock a few bucks off the price. I know I could do better, but I don’t have the time, the knowledge or the interest.

At the other extreme, I have a friend who refuses to bargain. She walks into the showroom, finds a car that suits her, asks how much it costs and writes a check. She considers outsmarting the dealer to be a pathetic little bourgeois game for people who are deluded into thinking they’re scoring a big victory in the capitalist moneyfest. Needless to say, she’s lots of fun at parties.

16

There are times when where you bought the car can make a difference. If there are two cars and only enough time left in the day to finish one, I have seen shops where the car that got bought at that dealer, got the nod. Also if you are being a PIA, there is a slightly higher tolerance for your bullshit if the company had made some money off you in the sale of the car. I myself have told people that were complaining about how something on their new car worked (In a perfectly normal manner, I might add) that they should take it up with their salesman at the other dealer.

While I understand the lack of love for dealer financing, I fell I should point out that car makers often offer low cost / zero percent (hard to get cheaper financing than that) which is only available through the dealer.

My secret plan for buying a car cheap? As other have said, do your homework. Also understand that the dealer has to make some profit. They have to to keep the doors open. Know what the factory rebates / financing offers are (available at the car maker’s web site)
Buy at the end of the month. At the end of the month everyone is trying to make their sales numbers. Car makers will often throw extra money at dealers on the last day of the month to make sales numbers. (Sign at my old office In the car business you are a hero 30 days at a time).
If the month closes on a Wednesday, go shopping on Wed evening. If it is raining, even better. You want the dealer to be hungry. February and March are excellent months, as lots of people are not buying cars due to taxes.

Lastly, consider the options the dealer offers. I don’t necessarily say buy them, but consider them. If for example you are going to put an alarm system in the car, and it will cost you $300 from the dealer, or $300 from the alarm guy, I would get it done at the dealer. First off it gives the dealer another source of profit, so he can cut his price on the car a bit. Secondly if there is an issue with the alarm installation, I can take it to the dealer and bitch. If you try this with an alarm that you had installed down the street, the dealer will point and laugh at you.

17

A good question is “What is your best price?” And act like that’s still a bit too much, negotiate down from there.

18

It’s people like this who make it possible for to me to purchase a vehicle for only a few hundred dollars over dealer invoice.

On both my Subaru and 4Runner, the MSRP was about $2,500-3,000 higher than what I paid. If someone wants to pay this, it’s their nickel.

Hey, I guess somebody needs to pay to keep the lights on at the dealership.

On the other hand, I do use the local dealers for service, so I’m keeping them in business that way.

19

No, you’re just giving the salesman the opportunity to set the opening price - you should make the opening offer and then let him try to negotiate up from it. The good question to ask the dealer is “What did you pay for this car?” except you shouldn’t have to ask because you should already know the answer. Then you can set a reasonable price on the car - invoice plus a small profit for a minimal effort sale. Know exactly how much you want to pay and don’t go a dollar over it.

20

I dunno, I think asking them what their best price is lets them know you’re not too interested in the price on the window sticker. If that’s the price they give you, walk.