I buy a new car every 5 years or so and I never feel like I get the best deal possible.
After the financial collapse in 2008 I bought a new car from Toyota and even with the pending doom they barely budged on the price. Then I went back and asked if they had any deals for repeat customers but they didn’t. At that point I ditched Toyota.
A few years ago I bought a new Hyundai and talked the guy down a bit. As I was closing the deal I asked what kind of deal I could get if I bought two cars at the same time and he said no deal (this was a serious question as I was possibly in the market for another one). I could have sworn multiple car purchases would result in a better deal but not so. Apparently the guy behind me would buy the other car immediately anyway to no reason to haggle with me.
Now I’m in the market again and feel there has to be some kind of proven methodology for getting the best deal that I just don’t know about. I know to set a max price I’ll pay and walk out if they don’t meet it but I’ve got limited time for car shopping and not much patience for this to start out with, which explains why I settle for a less than perfect deal. I have friends that seem to get great deals but I’m not really seeing their methodology other than they have personalities that negotiate better and have more free time to spend on this.
I also have a car I’ll use as a trade-in and want to just drive it up and let them know from the start it’s included in the deal.
[ol]
[li]Do the research and choose the best make, model and options for your needs over the next five years.[/li][li]Find out local dealer cost, including transportation, for that car within 100 miles of your location.[/li][li]Go in with pre-approved financing for that amount, rounded up to the next $1000, and start by offering $100 over dealer cost. If you can’t get it within $4-500 of dealer cost, move on to the next seller. ETA: It should be easy to make a list of preferred dealers based on location, reputation, etc. - spiral out from best to worst. You can take the car to a completely different dealer for service.[/li][li]Say no to absolutely every option, upsell, you-gotta and come-on that’s thrown at you.[/li][li]Walk out exactly one hour after discussion with a salesman begins if they aren’t substantially bending your way. Walk out after two hours no matter what.[/li][/ol]
Pretty much all there is in a nutshell, unless you’re going for an insanely desirable model of some kind that is getting list or list-plus from buyers.
Do you happen to have a Costco membership? They have a new car program where basically they have pre-negotiated no-haggle prices. My impression is that those prices are usually pretty close to what you’d get doing the usual days of back and forth horsetrading with the dealer.
I’m sure someone who’s good at it can probably get a better deal, but just being able to walk in and buy the car at a good price might be worth whatever small difference there is. You can also use the Costco price as your baseline bid if you do the “collecting bids” method, although it may very well be nobody will go lower.
There are quite a few “buyer programs” - Costco, Sam’s, AAA, and others. My collective understanding of their performance is that it’s pretty meh. The deals are about what you’d get with an hour of knowledgeable haggling (once a dealer knows you know to start with cost and work up, and won’t sit still for any shell games or upsell, he’ll either close the deal or let you walk). Many times going in with a Costco or AAA deal in hand is just a different start on all the upsell, shell gaming, and wearing you down.
I think the car buying services are best for someone who already knows which options you want. So there shouldn’t be any upsell, shell gaming or wearing you down.
Absolutely 100% agree with these. Have a price in mind and never go over it. If you tell them you can do $300/moth payments and they tell you the best they can do is $310, even though it seems close to your figure, walk. They’ll eventually come down to your price 99% of the time (there’s money in it for them, despite the fact that every single one will tell you they’re doing it at a loss), and if they don’t, there are plenty of dealerships that will.
Just don’t let them intimidate you. I always go in with the mindset of “This person’s a lying sack of shit and I don’t care about hurting his/her feelings”, which, whether it’s true or not, gets me in the right frame of mind to stand my ground.
Never, ever, buy a car at a Toyota dealership. Cars are fine, salesmen are crooks.
Do not buy by monthly payment, buy by price and Interest %.
Go to a Credit Union and get a finance offer there.
Buy a new car every 10 years, not five.
Do go online to Edmunds, etc and see what other people are paying. Use their system or others to contact the dealerships by email and have them make you an offer.
Besides the other good advice, never go to only one dealer. When I bought my Prius, I shopped around for the two best prices, and went back and forth between the two Toyota dealers, the price dropping each time I went. If you don’t leave, there is no reason for them to drop their prices.
We went looking for a used (former rental car) car at one place, with the highest price in hand. The salesman said he couldn’t do it, so we walked. (Literally - we went to a restaurant next door, though the salesman didn’t know that.) Fifteen minutes later he called agreeing to our price.
If you are ready to walk, and do it, the price will decline.
True but off-tangent, IMHO: never, ever buy something based on the payments. Don’t shop based on your payment limit. Don’t haggle over “price” by arguing payments. It’s a false-front argument that will lead to trouble many more times than otherwise.
If you need to budget for a car based on how much money you can spend per month, work backwards to determine the approximate financed cost that represents; use that as your purchase value and THEN get a preapproved loan that meets that limit and THEN try to drive the lowest purchase cost you can. Never let a payment amount drive the bargain. Ever. That’s the greatest shuck foisted on us by car sellers and the worst advice “consumer advocates” can throw out.
A preapproved loan based on fully thought-out financials before you turn on to Automall Road is the greatest way you can load the odds in your favor.
I knew exactly what vehicle I wanted and got a loan for it before going to the dealer that had it in stock. I had my husband drop me off so there’d be no distractions or attempts at splitting us. I waited till the last week of the last month of the model year (12/27, it was), knowing the dealer’d have to pay SC tax on all their vehicles the following week. I got my test drive, listened to the salesman’s blather and let him pull out a blank four square before simply handing over the check for what I wanted to pay. A tense hour or so later he (and the other men who seemed to gravitate during our discussions) gave me the price I wanted, $7K less than sticker. It helped that I found a few flaws, one of which made them look stupid and gave me a delightful upper hand. (There was a service alert light flashing and they ‘looked into it’ when I mentioned it; they told me it was a loose gas cap - I reminded them this vehicle has NO gas cap.)
I did not have a trade in, as I knew I’d be able to sell my car for higher than KBB (and did a month later) and I had a second driver w/ me.
Keep it simple. Take the list price and multiply it -x.88. Thats 12% off sticker and where most dealers need to be. Also shop near the end of the month as dealers and salesmen are all about making quotas.
You also mentioned a trade in. Remember thay cant and wont give you top dollar for your car and tae bottom dollar for theirs. It has to be wholesale to wholesale or retail to retail. Not retail for your, wholesale for theirs.
Search on the internet and find out what the dealer price is for the car (and that includes all options).
Add a reasonable profit to that price. Five percent is good.
Shop around at dealerships. Find ones that have the car you want. Offer them the amount you decided to pay in the second step. Stick to your price. Don’t let them treat your offer as an opening bid that they can negotiate upwards with counter-offer.
Accept that some salesmen are just not going to sell you a car at the price you’re offering. You’re offering them a profit but they may feel they can make a bigger profit by selling that car to another customer. Move on.
Thanks everyone for all the fantastic feedback here.
The technique on SlickDeals seems like a great approach. I’ve signed up on TrueCar.com and selected the first make/model I’m interested in and found two TrueCar certified dealers in my area. Using the TrueCar price I can now send emails to other dealers in the area asking for bids to see if they can beat this price. I didn’t see how to select various options on TrueCar so I’ll need to investigate that further but it could be this site only supports prices on a base model.
I could have sworn Consumerist had an article this past week about TrueCar or a similar service where the dealership tried to get out of the price and it was suggested they be reported.
This. Everytime I have bought a car in the last 25 years, it’s been through the Costco buying service. First, you don’t deal with the regular sales department. You deal with the Lease department. These guys are used to the Costco service, and don’t give you any problems. You tell them the car and the options, they quote you the Costco price. Invariably, the Costco price has been very close to “invoice” price.
Best, THERE IS NO HAGGLING, no high pressure, no delaying tactics, and no games. I think I may have been asked if I wanted undercoating, but a simple “no” ended all discussion of that.
I’ve bought 3 new Toyotas in the past 8 years using Edmunds.com as a guide.
If you have the window sticker of the vehicle you want Edmunds will give you exact invoice and MSRP on the vehicle. Along with a “true market value” price.
For example a loaded Camry might have a sticker price of $28,055, an invoice of $25,602, and a “TMV” of $26,009.
I’ve never once had a dealer pass on giving me the car for the TMV price on the spot.
I suppose I could argue for hours or attempt to get dealers in a bidding war to eat into their $500 profit but honestly my time is worth more than a few extra dollars i’d save.
I also find that by returning the favor of not wasting their time results in a higher level of customer service.
I also look at current national auto loan rates on bankrate.com. I give the dealer that number and offer them the opportunity to beat it. They do every time. Bankrate recently listed a 48mo. loan at 2.6%. The dealer got me 1.9%.