I’m bad at negotiation, but I have enough self-awareness to recognize that about myself, so I only purchase online–I first do internet research to learn what a good price for the car is. Edmunds has a feature to show what other people in your area paid, and there are other sites that do the same thing. Also, Costco has a car purchase program–I’ve used that as a data point when they’re selling a model I’m interested in. Also there are forums for the more popular brands/models where people discuss what they paid and what are good prices.
Once I’ve established a baseline price, I email a few dealers asking for prices. I take the lowest quotes and leverage them against each other.
If I don’t get a price I like (i.e., lower than my baseline price), I drop it. I’ll try again later, or I’ll try again with a different car (I never put myself in the position where I’m in love with a particular model, or in a time crunch to buy).
It’s much easier for me to negotiate online because I know I would cave and pay too much face-to-face. Plus, when I’m sitting at my computer I have all the information I need at my fingertips to let me know if I’m getting a good deal. And I can compare prices at multiple dealers with no effort on my part.
Even though I don’t negotiate well, I always seem to end up paying less than “good negotiators;” I suspect that most of the people who think they negotiate well are just fooling themselves. Also I would never bother with any in-person negotiating tricks because I would never go into a dealership without an agreed-upon price.
If you’re bad at negotiation, don’t try to get fancy. It won’t work. These guys have a million times more experience than you do. Just do some research online to get the invoice price, average sale price, etc. Start out by asking what the price would be if you bought it that day. They’ll give you a price. Point out that the average sale price from the Internet is X (assuming X is lower), and can they match it? They’ll let you wait a while and then come back with some crazy excuse and probably an offer to lower your payments to some lower number (by extending the length of the loan or other such nonsense). Tell them you only want to discuss purchase price, and then wait some more. They’ll come back again, probably with a slightly lower price. Tell them you’ll pay cash right now if they’ll come down to Y (where Y is a price you’d feel good about paying), see what they do. Don’t hesitate to leave if you feel like they’re playing games or you wouldn’t be happy paying what they’re offering.
Other comments:
Forget about your trade-in. They don’t want it, and it’s just an extra variable for them to dick around with in the negotiation. Unless you literally just want to get rid of it, sell it yourself on craigslist.
Definitely consider a Hyundai Elantra. Mrs. Giraffe just bought one and they are really nice. Much nicer than the Civic, IMO.
When I bought my Honda Element several years ago, Honda’s website had a feature where you could get an online quote from a dealer. That price was the absolute lowest price they’d sell a car for – I got it from three dealers in our area and all three gave the same price to the nearest dollar. When I tried to include my trade-in in the deal, they basically told me that they couldn’t make it work, because they didn’t actually want the trade-in and the price left them no room to fudge the numbers. It was very cool. Definitely do that if you can.
In any negotiation, whether it’s trinkets in an Asian market, a car or a house, there are only two things you need: the highest price you’re willing to pay, and the ability to walk away.
With cars it’s tough to impose those two things, because it’s a slightly emotion-driven purchase, and because the dealers know an entire bag full of tricks and are good about throwing in ‘extras’ you don’t need in order to make you pay more than your bottom line.
Worse still is if you need credit and they say things like “it’s not about how much you owe, it’s about how much you can afford each month”. Bull - take a calculator with you and work out how much interest you’d end up paying over and above the price paid, and again walk away if it’s not enough.
Someone linked a fantastic article about car dealerships a few months ago, done by an undercover reporter but I can’t find it. If anyone remembers what I’m talking about, please link it for the OP!
Back when I first started trying to get serious about negotiation, I tried some stupid, weenie, idiotic, passive, dumb, not-smart, wimpy strategy of trying to use the monthly payment discussion against them.
I found out what a reasonable price would be and figured out what the monthly payments would be using their interest rate. I then went in and ‘let them’ discuss monthly payments rather than purchase price on a base model/no extra features low price car (I was a teacher after all).
It was kind of fun watching them sqirm around. I had cut off all possible avenues to fleece me. No extra features so they couldn’t ‘cheapen’ the car. The payments I said I could make were within range of them accepting but just barely…they wanted MORE out of this sheep. I was going for a 5 year loan which is the maximum possible length at that time…so they couldn’t extend the time period of the loan. They had nothing.
After a couple hours of negotiation and watching him squirm he comes back in all smiles and excited. He was given permission to give me a 6-year loan!
WTH? I never heard of a 6-year loan! The salesperson was all set to go for 6 years AT MY MONTHLY PAYMENT PRICE! (to hell with that). I figured out later that this was over $1000 more than MSRP!
Well, I’ve already embarrassed myself in this thread, so I’ll tell this tale. I was looking at Mustangs on a local dealer’s site and requested a quote. I assumed they would send me a quote via email. Turns out they CALL YOU ON THE PHONE! 5 minutes later I was chatting with an actual live salesperson. I was surprised because it was late in the evening (8:30? 9:00?) but I guess car places are open that late. To be frank, I was a bit tipsy and somehow the phone call ended up lasting like 45 minutes while we shot the breeze like we’d been friends for years. I felt HORRIBLE when I decided the car wasn’t for me.
I second the “don’t trade in” thing. When I traded in my Civic it had a KBB value of around $5000 in tip top condition. (I have no kids, so no spills, don’t smoke, etc all that.) The only cosmetic damage was a barely noticeable dent in the rear door that I never had fixed because it had the most hilarious/bizarre story behind it. I think they first offered me $500 got it. I said “Are you SERIOUS?” We went back and forth for like a half hour and the very very most they were willing to offer was $1000. Come on! I put up some flyers at work asking $4000 and almost had one of my co-worker’s sons buying it but he didn’t have enough money or something. I ended up selling it to my Husband’s nephew (nephew-in-law?) for $3800. Dealerships. :rolleyes:
a. Use something like truecar.com to figure out what people are actually paying for the car you want. You can also pay nominal fees on the net to get the actual dealer costs for the car. Configure the car the way you want it and know what the total should be.
b. Call a bunch of dealers, tell them you’re serious about buying the car, tell them exactly what you want and have them give you their best offer. Once you have the best price, call the other dealers and see if they’ll do better. If not, if the price is reasonably, go for it.
This technique works best if the car is not constrained in availability. If the dealers are selling every car they can get (like after the tsunami), then you’re not going to get much of a deal. It also works best towards the end of the month or quarter when salespeople are trying hard to make their numbers.
Generally, trading in a car at the dealer only makes sense if its value is so low that you just want it to go away with the minimal amount of effort. If the car is in decent shape you can probably do better selling it yourself.
I haven’t read through the entire thread so forgive me if this has been mentioned before, but I’ve had good luck buying my last two new cars by calling up the dealership and asking to speak to their internet sales manager or their fleet manager. Both times, this person was an older gentleman, very “non-car salesmanlike,” and there was absolutely no hard sell or sleaze. We just sat down and chatted about what we were looking for (the spouse was there too, but I do the car negotiation), the fact that we already had financing, and what we were willing to pay. Then he told us whether he could do it or not. In both cases we ended up buying with a minimum of fuss, bother, or frustration. No running off to visit the sales manager, no upsells (he did ask us about things like rust protection once we were setting up the deal, but he wasn’t at all perturbed when we declined), and just generally a pleasant experience.
I’d never do it the old way again. I hate car salesmen. I always feel like I need to take a shower after I talk to them.
We just bought a new Honda 2 weeks ago, and got a decent price, according to truecar.com
We had took several months to buy - Thankfully we had that luxury. We visited the same dealer 3 times, and kept and eye on what pricing and availablility was.
We weren’t set on one specific car. We were actually within 30 minutes of buying a different brand car, when we decided to make one more stop at the Honda dealer. Honda had the car, just as we wanted it, on the lot.
It was December 30th. No more time for them to try to meet their targets.
We were looking for a manual transmission, and the one they had had been sitting on the lot for at least 3 months. They wanted it GONE.
“We’ve done our research” + “We’re ready to buy today” + “There is a car 3 miles down the road that I’m ready to make an offer on” + year end + non-moving inventory.
In regard to a new car purchase, how do you avoid the sales pitches for add-on’s like extended warranty, fabric protector, etc.? I don’t think it will be that hard to negotiate the price of the car online but even with a car-buying service eventually you have to go to the dealership to sign the papers and I dread the gauntlet of additional pitches for things I don’t need/want. “Just say no” is not a good answer because they are made to keep asking again and again…is there a way to get the paperwork done without going to the dealership? Maybe the lending bank could help?
It’s really not that bad any more. There are much fewer add-ons available now. (Most cars come in a few standard configurations.) And in my limited experience, the dealers are much less aggressive in pushing add-ons.
There is a book written by Bruce Bueno de Mesquita. I think this book.
In it he details the best way to negotiate a car using game theory.
Looking around on the internet, here is a video of his method. It seems pretty smart. You find the car you want, then contact a bunch of dealers on the phone and get them to negotiate with each other.
I did use negotiation to buy a car once, but it was used. I found a car I wanted, then I found a different car that was a few thousand less but was comparable. It wasn’t the same make/model, but it was a fairly similar car wrt size and options. The guy didn’t match the price but he cut 20% off the price.
You can probably (I don’t know for sure though) get more money selling your used car yourself than you would trading it in. Unless there are tons of dealer incentives.
None of the extra add-ons they try to sell you are needed at all. They are just adding gravy to the sale.
I have bought 3 of the same make and model cars so I knew what I was buying inside and out. When they tried to push extra undercoating I told them that is says right in the owner’s manual that no extra undercoat is needed or recommended. They shut up right away about that.
Fabric protector? It was already applied at the factory.
Paint sealant? The god damned paint is already sealed with a thick layer of clear-coat paint! You want me to seal the clear-coat? ALL cars are clear-coated now.
Extended warranty? Most cars come with high mileage warranties in the 40 to 60 thousand mile range, even higher on some. Any factory-defective parts will fail long before your new car warranty expires. Anything that fails after the expiration is normal wear and tear.
The last guy I dealt with just said, “you know, I have to ask these questions.” I said sure! Let’s wrap this thing up.
If they treat you like an idiot just tell them to stop with the spiel and finalize the deal, or you are going go home for the day and think about it. That is the absolute last thing they want in the world.
They expect you to be an idiot who doesn’t know any thing about cars except where to put the key. It all sounds so reasonable. “You know, they salt the roads around here and you really need the extra undercoat.” Bullshit. “The sun and bird poop can really damage your paint.” Bullshit. “Do you have children? You really need that Scotch Guard fabric protectant.” It is all 100% Bullshit.
And come in with pre-approved financing from your bank or credit union. Financing through the dealer is a whole 'nuther scam. Talk to whoever you bank with, tell them about how much you are going to need and they will pre-approve an amount. They may even give you a letter or certificate. Do this before you go to the dealer.
That’s usually pitched in the finance office, when their dude is writing up your contract and having you sign all the documents. Any I’ve dealt with have taken my “no thanks” first time around. They’re required by management to pitch it, but most know that ‘no’ means ‘no’. You have to do a certain amount of paperwork at the dealership; there’s really no way around it, as the car has to be licensed and you MUST sign papers agreeing to pay for the vehicle described. If the guy persists in trying to sell the add-on’s, just fix him with the fish-eye and ask him if he understands what “no” means.