New car buying - the omibus thread

In My Humble Opinion
1

Let’s discuss your new car buying experience. I am currently in the market for a new vehicle, and I have been overwhelmed with an avalanche of information. (This will be a fairly long OP… Right before the end, I sum my most recent dealership experience).

First, has anyone used one of the buying services, like TrueCar, Edmunds, KBB, AAA, etc? If so, how did it work out for you and would you recommend it? Also, does anyone know how these services work (with respect to what vehicles they show you, for example)? Also, do you actually see any tangible savings, or are these all tools designed to get buyers on the lot, and the money one pays for a vehicle is going to be relatively the same no matter what “service” they use (or no service at all)?

I have noticed a few things:

  1. each “service” shows you different vehicles. TrueCar, for example, will let you create the exact vehicle you want, but will rarely show you a car that matches exactly what you are looking for. They will give you a few local dealers, with current inventory that never matches exactly, but is pretty close. Before you say “well, they cannot sell you what they don’t have in inventory”, the vehicle I am looking for is fairly standard, with a standard equipment package. I am able to find this vehicle easily by looking at local dealer inventory, or on other service sites.

2). Edmunds gives a different guaranteed locked in savings amount versus TrueCar. However, that doesn’t mean you will ultimately pay a different amount. It seems to be a starting point for the negotiation process. And the other important thing to note is that you are never comparing apples to apples, at least in my experience so far. Each service shows you different available vehicles to choose from, and they never overlap. It would seem that each service has access to a subset of a dealer’s inventory, so you, as the consumer, cannot focus in on a specific car and get the best savings deal possible for that one car (i.e. The services do not seem to directly compete with each other).

3). TrueCar says it will guarantee the savings on the exact car you want if you order it from the factory, which is an 8-12 week wait. Of course, there is also fine print, which includes the handling of any available incentives, (interest rates, customer cash back, etc) and how the price is ultimately locked in. I don’t believe they are guaranteeing anything, although I assume they must be giving folks close to what they are showing, or the services wouldn’t be very successful or sustainable in the long run.

Then, there is the trade-in… Where to go for the trade-in value of your vehicle?

I have used 3 different websites.

  1. kbb,
  2. edmunds
  3. black book

All give slightly different numbers, although they all seem to be in the same ballpark. Anyone have any different sites or sources you use and find reliable?

My last question, and maybe this is for someone who is in the business, but anyone’s opinion is welcome. With all the data available, it would seem the consumer is in the driver’s seat. But I don’t think auto dealers are struggling to survive. So, my working theory is, there is a dollar amount that a dealer will NEVER go below on a vehicle. If you walk in with a savings certificate from, say, TrueCar, they may give you that, but they will get the money they want through low-balling you on a trade or killing you with a high interest rate.

There is a local dealer here who claims to be currently giving people $8,000 OVER Kelly Blue Book prices. Even if that is wholesale, that doesn’t seem possible without dealing with either fine-print exclusions, or impossibility high interest rates.
***** personal experience *****

I did a ton of research, went to a local dealer who was advertising a “rock bottom price” for the exact car I wanted. I printed that page out. I also printed out information regarding my trade. My trade, wholesale, in the lowest condition category (my car is in very nice shape, but it is not mint or pristine. However, it doesn’t need any mechanical work and would only require some minor detailing to make it sellable. No rust, no dents, no accidents. It just passed state inspection, so I am pretty confident in the car’s condition) is $9500. That is the LOW wholesale price. Local retail on a similarly equipped car with 10,000 MORE miles runs around $13k.

I printed out every ad, documented everything, and went into the dealership. I told them this would be a pretty fast sale if they were willing to stand by their advertised price and be fair with my trade.

90 minutes later, I walk out and drive home. They offered me $7000 for my trade (and they were doing me a favor), the price on the website included a few incentives, one of which was something that NO ONE could qualify for (there was one incentive that was an “either/or” kind of thing… You could get $x for being military OR a police officer… But you couldn’t get both, but they included both in their “rock bottom price.” :dubious:), and on and on. It was amazing.

I told the sales manager I wasn’t being unrealistic or unreasonable on my trade… Here was all the local data to back it up… And if he wanted to make the deal, he had my contact info.

He told me he couldn’t go higher on the trade. On the way out the door, he offered me $500 more. I said no. He sent me a text and called me the next day, asking me to come in so we could “work something out.” “Ok”, I said… “You know where I am with the numbers… If you agree, I will come in and sign the paperwork. If not, tell me now.” He says “well, the car you wanted was sold and is no longer here. But we do have a similar one that will cost $xxxxx.”

I said “you are telling me that car sold already?” He said “oh yes… Very popular car, as you know… But we have a similar one with about $2k more of options on it.”

I said “no thank you. I will continue to look.”

The car was still for sale 2 weeks after this conversation. :dubious:

Clearly, this dealership is unethical and lies. It is also clear to me that they don’t believe anyone does any homework. Not only was it sitting on the lot, but it was still on their website and also showed up in the manufacturer’s inventory as “for sale”.

I was asking for them to honor the price they had on their own website and give me the lowest wholesale value on a vehicle they could flip for $4-$5 k more easily. They still wanted more from me.

Oh well. On to the next dealership!

So, share your experiences, if you used a service like TrueCar or negotiated on your own, how you did on your trade, etc. Anything you want to tell us about your personal new car buying process. Include ethical or unethical sales people/practices if you wish!

2

The last couple of purchases hubby and I made (a new car for him, one for me, at different times and different dealers), we’ve been lucky enough to be able to lay 100% cash on table for the cars we researched. The salesmen have been mostly fine. The problems come in when they make us sit down with the stupid finance guys.

First, I’m paying cash. Stop walking into the back room to “talk to your manager” but really just making me stew and fret.

Secondly, I’m paying cash. I don’t need to talk to your stupid finance manager. Oh, he’s the only one who is authorized to accept my money? Okay, fine, whatever.

But do NOT try to convince me to finance the purchase instead. Shut your pie hole. Stop with your stupid “four square” accounting tricks and your silly mind games. Do you want my money or don’t you?

The older I get, the crankier I get and the less crap I put up with. Next time, if the entire purchase process takes longer than 1 hour, I’m walking out.

3

I look at KBB and NADA.
http://www.nadaguides.com/

[QUOTE=JcWoman]
But do NOT try to convince me to finance the purchase instead.
[/QUOTE]

I’ve never had a dealership try to talk me out of paying cash. If anything it gives you more negotiating power.

4

Dealers make a lot of money off the financing, in some cases more than they’re making off the car itself. If you walk in these days and say “I’m paying cash” what they hear is “We are going to make less money on this deal”.

I just say that I’m still thinking of how I will pay for the vehicle. I mention I have my own financing but will of course look at what they can provide. No need to commit to anything until you’ve negotiated the price.

5

I have never heard of anyone getting a good price for a trade-in from a dealer. You of course have to remember that they aren’t buying the car to use, they are buying it to resell and any given car probably has $X of repairs it will need. The best advice is always to sell to a private seller.

6

When I was last in the market, I knew what I wanted (Hyundai Santa Fe, same model as I had before, just newer), and I knew exactly what options I wanted (V-6, 4WD or AWD, sunroof, heated seats, cell phone connectivity). I knew I wanted the vehicle to be black, but I would’ve been fine with a dark blue, green, or charcoal grey. I was not buying new; I wanted one a year or two old.

I figured out my budget and secured my financing before I went to look.

I looked up my former car’s trade in value under KBB and CarFax.

Then I found the *perfect *vehicle (a 2011; this was 2013) and checked its value. It was priced exactly what I wanted to pay and had a nice package of extras (leather, “wood” on the dash, that kind of thing). I test-drove it, loved it, and made an offer. Dealer accepted the offer. Then he made the offer on the trade-in, and it was slightly higher than I thought it would be. SOLD! No bullshit, no “I gotta ask my manager”, nothing. It was great. I’ll go back next time I want a vehicle.

7

From those two experiences, I learned that Pork Rind is correct. They used the financing hard sell to try to upsell us on the underbody coatings, extended warranties and other stuff when all we wanted was the car. Moreoever, they are able to sort of hide just how much money they make on the add-ons by burying them in the finance package. Say for argument sake that the underbody coating costs $200 if you buy it cash on table. However, if you tuck it into the finance package, the interest rate and loan period then applies to it also and you can easily end up paying around $1000 for that underbody coating without realizing it (if you keep the car until the loan is paid off).

8

I’ve done pretty well with trade-ins. I know going in what the car should be worth and factor in three more things:

[ol]
[li]The convenience of not dealing with strangers wanting test drives[/li][li]The simplicity of having both halves of the deal done at once[/li][li](At least in WA) the sales tax credit you get for a trade in makes the option more attractive[/li][/ol]

On my last trade-in, the sales tax offset was worth close to 3k, the price the dealer offered seemed fair, and there was zero interaction with Craigslist loonies. As I was unloading a fairly high performance rare sports car, I *really *didn’t want to give out test drives.

9

…and not just those upsell options. The dealer actually gets a commission (may not be the term they use) on the financing they sell. Financing is a product and a profit all to itself.

I read that the best option to retain your negotiating leverage if you want to pay cash is to take the financing (only if there’s no pre-payment penalty) and then pay off the balance on the first statement. That way the salesman might in theory at least have more room to move on the sales price since they know they’re making a thousand bucks or whatever on the financing. If they knew you were paying cash, they’d all of their profit came out of the sale alone.

From here:

10

You are always better off selling your used car yourself. A dealer will nearly always tell you your car is in much worse condition than you know it to be, or that there is no demand for your vehicle, etc. I’ve never had a dealer offer me anything close to book value. I would also use NADA, as most dealers use it.

If you’re planning to trade your car, refuse to discuss it until you’ve reached a deal on your new vehicle. If the sales person asks “What were you thinking you want on your trade?”, respond with “Do you want to talk about me buying a new car or did you wish to talk about my old car?” If you start talking about both vehicles, the sales person in going to start playing the numbers game with you. I usually just kill that conversation by telling them I’m going to sell it myself, even if it’s not true.

If there is more than one dealer for the car you want, get price quotes from all of them and see if they’ll compete for your business. It can be time consuming, of course.

It’s tough to argue with the numbers. If you go in with what you know is the factory invoice plus shipping, and tack on a few hundred bucks for dealer profit, that’s a fair price. Your response to the negotiating tactics should be: “Why would I pay you more than what the car is worth?” Car dealers make their money from volume, as do sales people, who generally get a flat amount per car sold, rather than a percentage of sale price. The sales manager is a salaried position, and sometimes it’s worthwhile if you can deal with him directly. But they usually won’t do that unless you’ve made a lot of noise about being unhappy with the sales staff. At that point, however, he may just tell you to fuck off.

11

I dont trust KBB, they issue several version of their “Blue Book”, which allows a dealer to show you their car is worth lots and your trade in is worth squat.

12

A lot of interesting tips in here.

Financing profit interests me. If a dealer is working with the parent company (say GM or Ford Credit) do they get a cut, or is it only when they deal with their own, local financing options? Because I don’t think GM or Ford would have a problem with someone paying off a loan immediately. AFAIK, there is no penalty for paying early if you go through them… Probably because the percentage of people who can pay cash for a vehicle is very low.

Anyone know the Straight Dope on this?

Another thing I’d like to discuss is “dealer invoice”.

Dealer invoice is, as far as I can tell, a bogus set of numbers, made up by the auto industry to make consumers THINK they know what the dealer paid.

In reality, that number is BS, and the dealer makes money on the car even if he sells the car to you “at dealer invoice”.

Of course, I have no idea what the actual markup on a vehicle is, but dealer invoice numbers are now widely available, so I put little stock in them.

The other thing I learned is that the MSRP (and dealer invoice) can change on the same vehicle. I was looking at 2016’s in August, and the same car, same package went up slightly for September. I was a bit surprised at that, considering the 2016 numbers were already out there, and the 2016’s have only started arriving at dealerships. I thought there would be at least 6 months of price stability.

I agree that selling a used car on your own is the best way to maximize your return, but there is a lot of nonsense I really wouldn’t want to deal with, unless I actually knew the person I was selling to. I did the “random stranger from the wanted ads” thing once, and it was not only a hassle, but some of the people were downright spooky. For that reason, I am willing to take less than what the average “book value” would be.

That is why I thought I was being downright reasonable with my trade-in expectation. Not only was I using the lowest wholesale number I found, but the same dealer had the same car as mine one year OLDER sitting in their used car lot (different color and more miles, but it wasn’t like they were only into 1-2 year old trades and cream puffs).

Dealers, I think, are used to people coming in to the dealership ready to make the deal THAT DAY, and they need to use their current car as a down payment on the new one. Some of the conversations I heard in that dealership were downright sad. People quickly fold up and give in, and usually feel pretty abused when they leave the dealership. Most people have zero negotiation skills, and if the sales person bumps up the person’s trade a couple hundred dollars (after the Fargo-style walk out to “talk to the manager” and come back to tell you that “he’s never done this before”), they take it and go.

I don’t mind someone making a bit of money… But don’t treat me like a knuckle-dragging, mouth breathing idiot, either. There are enough of them for you to make a profit… I am the quickest deal you will have this month! Let’s go, already! You will move the iron in an hour!

And no, I don’t HAVE to have that color. I’ll take anything except red. God, I hate red vehicles.

13

Factory invoice is, the only real number, and it can be found on sites like Edmunds, along with the price you should be paying for the vehicle. Or at least it used to. I don’t know if Intellichoice is still independent or is now a shill for the industry.

I sold four cars in nine years through Craigslist and got asking price each time. If you’re worried about somebody coming to look at it, make sure a friend is with you for the meet, and both of you go on any test drive, with a copy of his license left with your spouse or some third party. Then meet at HIS bank for payment in cash ONLY, again with a friend in tow.

Honda is the only bunch of assholes who have ever insisted on trying to charge me full MSRP, and who refused to negotiate even one penny. I laughed at them and walked.

Salesmen can’t help themselves. They’ve got to try to run the game, regardless of what you tell them. On one occasion, even after telling them that I was a vehicle salesman myself (RVs) at the time, they still tried the same tired bullshit.

14

Yes and no. It’s a real number, but there are so many other things that a dealer makes from selling a car, he can sell cars all day at below dealer invoice and still make a profit.

15

The last two vehicles I bought we used CarCostCanada and I think it made a difference. We bought both cars for what the invoice was from CCC plus or minus a few hundred dollars. We knew the rough blue book value plus I looked at private sales to decide what our cars were roughly worth. They tried the whole upsell thing at both dealerships, but we went away happy at the end of the day.

I also gavethis a good read before we went in as well.

16

Oh, thank you for this link! I’m in the midst of doing research right now (I have to replace my poor 10-year old Jeep). It’s been eons since I last bought anything from a dealership – fact is, it terrifies me in some ways :shudder:

17

Thank you for this link. I assume it is not Canada-centric, but Even if it is, I’m hoping tomget some workable advice from this.

I’ll update this thread after this week, when we go for round 2. I am also trying something differnet. I am going to leave off a couple of desired optiond and see if the cars that come in through TrueCar will actuall reflect the car I actually want but didn’t tell them. They have yet to show me the exact car I want, but even though i know the exact car I want is at a participating dealership. So, if I give them a car that leaves a few things out, I want to see if true csr shows me a similar, but more expensive model that is actually the very car I want.

Also noticed through my notes from August and September that the destination fees have gone up $60 on the 2016 models, and there are significant changes in both Dealer Invoice and MSRP. One month (actually a few days) and the same vehicle with the same options is over $1200 more than if I bought in August. Of course, they low-balled me an offer for my trade, so maybe this go around, I will get a better trade value, and the dealer will get approximately the same out of me no matter which way I go.

The last vehicle I purchaeed was a “no haggle” deal. A “Take it or leave it” price, and I preferred that to this process immensely. I was out of there in less than an hour. It was a late model used car, and not only did I save a ton of money on that car from the depreciation, they gave me a fair price on the trade. They made a nice chunck of money, and I went home relatively happy. However that was a low mileage, late model used car place. They only sold used. New cars are such a wasted of money from a depreciation POV, i really didn’t want to go there… But my better half wants to go new this time, and since it will be her car, I am giving it the due consideration.
Looking forward to some of the experiment results I get from websites in the next coupld of days. I’ll update the thread as appropriate.

18

Here’s a vehicle question: I’ve been told it’s better to go to a dealership for a used car rather than a dedicated used car dealer because 1) dealerships tend to take better care of any mechanical issues, and 2) not all used car dealers are the same way. For instance, I never would’ve known that a used car dealer I’d been considering simply buys cars at auction and puts them up for sale and it’s up to you to deal with any issues…nope, no thank you.

I cannot believe prices now, even for used. When I got my Jeep 10 years it something like 14K. The same model now goes for 17-20K used :eek:

Even though I’m doing research I’m still petrified. I was hardballed at a dealership last month when I asked about a particular vehicle. I was by myself. Nice to see how the dealership industry still as sexist as ever (I walked out, btw).

19

I would say that if you are financing, give the dealership a shot at it, and that’s something I never thought I’d say. The last time I bought a car, my credit union called just as the test drive was ending. The salesman heard their quoted interest rate (2%!) and as soon as I was off the phone told me “We can beat that by half a percent” and they did.

I love buying cars because I love the haggling process and calling them out on their bullshit, but I will say the last car I bought went really smoothly. One the price was established, I simply told the salesman that “all of the things you ‘have to’ tell me about, like paint protection, let’s just mark those all down as ‘no’ right now” and he did!

20

We bought a new car this year and used a car buying concierge service. It’s really just a guy who is an expert at buying cars. We paid him $500 and he arranged test drives, negotiated the deal, and accompanied us to the dealer to sign the papers to make sure they didn’t try to change the deal. The price he negotiated was about $2,000 lower than what TrueCar listed as an “unusually low” price for the car we chose.

It was all so easy. He helped us narrow down our selections to two cars. He arranged test drives at dealers. We walked in and said “We’re here to see [salesguy] for a test drive.” Salesguy handed us the keys and we drove away. We brought it back and gave the keys back and left. There’s was no selling at all. We picked a car and the buyer found one and negotiated the price. We approved the deal and met the buyer at the dealership. He made sure the paperwork was correct (it wasn’t, but I didn’t need him to know that) and made sure they didn’t try to rip us off in the sales manager’s or finance guy’s offices (we weren’t financing so we never went there). We didn’t need him to hold our hands like that (we know how to say “no” to salesmen) but he was interesting to talk to while we waited. It was the easiest car buying experience we have ever had and we won’t buy a car without him now.