I’m probably going to buy a used car from a dealership in the next few days, and I have a few practical questions.
I intend to pay cash, and have enough in my bank account to cover the cost. Will the dealer accept a personal check, or will he want a more guaranteed form of payment, like a cashiers or certified check? I have a debit card for this account. Can I use that for a payment that may be slightly over $10,000?
I’ll probably trade in my old car, but we’ve lost the title. I’ve ordered a replacement but it probably won’t be here before I go to the dealership for the first time. (It’s about 90 minutes away, so I’d prefer not to make too many trips.) I have the “Maryland Notice of Security Interest Filing” that we got back after paying off the loan, but it is marked “This is not a title.” Assuming we make a deal for the trade-in, can I leave my old car there and send the title later, or will he want the title before I take the new car and leave the old one?
The dealership is in Virginia and I live in Maryland. How will the sales tax work? I know I have to pay sales tax to Maryland when I register the car. Will the dealer just register it in Maryland and pay the tax to Maryland, or will I have to pay Virginia tax as well? Do I get a refund of that when I pay the Maryland taxes? Or does paying tax in Virginia mean I don’t pay Maryland?
Any tips for negotiating? This particular car has a lot of features I want, and there are no others nearby with this particular combination. I know I should not appear too invested in this one, and give the impression I have lots of other options, but I don’t have a lot of experience haggling, and the salesman does.
I may go down as soon as Tuesday, so I’ll appreciate your quick replies.
I imagine the dealer in question would be able to answer all your questions. Well, except the last one.
Last year I bought a vehicle from a dealer for cash for about $6500; they required a cashier’s check from my bank. They told me explicitely: no checks, and no cash - had to be a cashier’s check from a local bank.
I don’t want to ask the dealer before going there, because that’s essentially admitting I’m going to make a deal with them. I don’t want them to be that confident I’m buying from them.
The way I’ve had the State sales tax debacle explained to me is this:
When you go to register your vehicle in MD, you show your bill of sale to the DMV. If MD tax rate is higher than VA tax rate, you pay the DIFFERENCE in sales tax to register the vehicle.
As always, YMMV.
Call the dealership, ask about the payment policy. THEN call your bank, see if you can make a debit card payment of $10K. If it’s a big-name dealership, there shouldn’t be a problem with the entire thing being a debit card transaction, IF your bank will let it go through. The money is placed damned near instantly in the receiver’s account, and businesses LIKE that.
~VOW
VOW, thanks for the suggestion of calling the bank. They won’t raise the debit card limit high enough. Have to find another way. Perhaps a credit card.
As for price negotiating, you need to have in hand expected sale prices from Edmunds.com, Autotrader.com, and Kellys Blue/Black book (kbb.com). The sites will give you a tight price range you should pay for the area you are buying in, the specific car, the options on the car, mileage, and condition. If they can’t/won’t match (and they will initially claim the prices are nuts), walk out. You’ll get the, “I have to get approval from my manager” crap. You’ll get offered extended warrantees, and they will use the distance travelled argument against you. They are very good. Walk out - it’s just a car. Your price or the highway.
Do the price haggling via email. Don’t burn gas. Get the best price within the limits from the websites above in writing (print out email). Only after the price is settled, talk about your trade-in. The websites will also give you what to expect a dealer will pay based on an honest assessment of it’s condition.
Keep the negotiations separate. Only move from purchase to trade-in when the price is firm. Do not hesitate to walk- IT’S JUST A CAR.
When I bought a new car last year, the dealer let me put a deposit of $3000 on a credit card and told me the exact amount remaining. So I went to the bank and got a cashier’s check for that amount. So I’d recommend that you have $2-500 in cash on you. See if the dealer will let you use a debit card, credit card or cash for a deposit and then let you return the next day with a cashier’s check in the exact amount.
So I did call the dealership (without identifying myself, of course), and found out about their payment policies: they will take a personal check. And about the titling, inspection, and taxing process. I can do it myself, which means going to the DMV within 30 days, but I can drive off with the car that day. Or I can have them do all that, but I have to come back a couple days later.
Probably worth having them do it.
So I think my first few questions are answered. Thanks.
As for negotiating, the price they’re offering is between $2,000 and $4,000 lower than the retail prices quoted by the sites smithsb recommended. So I’m probably getting a pretty good deal without any haggling. I’ll try to push them lower, of course, and get a good deal on the trade.
That said, what do you think of this tactic: I go in with listings for two or three other lower-priced cars on their lot, and ask about all of them, saying that they’re really my price point. I have the listing for one I really want as my “luxury” option that I can’t really afford. I then let them try to talk me into that one, but protest that they’ll really have to bring the price down to get me to buy it. Do you think that might work?
First question: How old is the car and what is the condition? $2 to $4k off retail might be good, but I would try to get near private party value. How do you know that it’s not some piece of shit that they are trying to pawn off on you? Can you take it to a mechanic you trust? Are they offering a warranty? Any grace period during which you can cancel the deal? (And no, your state does not have a 3 day “cooling off” period in which you can return the car, internet rumors notwithstanding)
Second: I wouldn’t start asking about the lower priced cars. The sales people are looking at profit margins and sometimes they will talk you into lower priced cars if they are making more money from them. Especially used cars. They might be telling you not to go with the more expensive one.
Best to stay with the regular negotiating technique of knowing what the car you want is worth and walking out of there unless they give it to you. Back up your numbers to the salesperson and be ready to walk if he wants too much. As others have said, It’s just a car. Millions of them on the road!
Third: Take all of the free drinks or food that they offer. If it goes to hell, at least you got something out of 'em.
Missed the edit window: I think a reasonable start is when the salesperson sits down to point a pistol at his head and explain to him that you don’t want any tricks, and at the first sign of any tricks you are walking, and that you aren’t paying for extended warranties, reconditioning fees, service fees, gratuities, customer service packages, or any other dealer bullshit. Then call him a motherfucker. Tell him you just want “out the door” prices only!
The only part I’m kidding about is the pistol and the motherfucker part.
Then be wary of the tricks they will try. That’s where they make their money.
I honestly haven’t had a “genuine car dealer” experience in a long time. The last few times I’ve bought a car (all new) I’ve basically gone in with internet research that showed what the national average sales price was, and then I found out what the lowest 10% of reported sales prices were. I basically demanded a price in that range and got it every time. The salesmen didn’t even negotiate with me. I basically just sent an email to the dealership saying I knew they had a car I wanted and the price I was willing to pay (which again, was in the lowest 10% of prices paid for that vehicle) and they agreed to it before I ever showed up.
I’m guessing used car salesman may be just as bad as they always were, but I have to imagine even they know that everyone comes in with a mountain of numbers from Edmund’s, AutoTrader, kbb and etc. Every dealership around my area has an internet sales division and I’d definitely just negotiate through them. If you’re not good at haggling I think it’s easier to do it through email, if you pick a price that is in the lowest 10% of prices paid nationally you are getting a good deal. It is unreasonable to expect better, they aren’t going to totally eliminate their take home pay on the sale.
It sounds like you know your specific dealer’s policies, but I will mention that many/most dealers do not want you to put the entire price of a car on a debit or credit card. Interchange fees are % based and would be substantial on say, a $25,000 car. The dealerships around here will only allow you to put $2500-3000 on a card and if you can do that it isn’t bad, because of cards with frequent flyer programs and such, as long as you have the cash to pay it off immediately. But the dealer eats a big percentage of the total sales price if they let you put the whole car on a credit card.
Oh, and I don’t know that any dealer will outright refuse cash. I learned the hard way relatively late in life that when people say “bought a car with cash” they mean with a personal or cashier’s check. I plopped down over $20k in cash and I’d say it added 3 hours to my car buying experience.
One technique that has worked for family members:
Go to your bank, and take out cash enough for the price you’d like to get – say $9,000 on this car that they have priced at $10,000. Take that cash with you to the dealer.
Then early while negotiating, maybe when you are looking at the cheaper cars, take out that bundle of cash and toss it on the salesmans’ desk, saying “here’s $9,000 – that’s what I’ve got to spend on a car.” Then look at the better car, and ask if they can get you that one for money you have. Don’t let them tell you you can write a personal check for the difference, or put it on a card – keep repeating that this $9,000 cash is all you have to spend. (But be prepared to actually do that to make the deal work. Hopefully though, the total will be $9,500 or so, rather than the $10,000 they were asking.)
If you have the cash, why go to the dealer and pay him his outrageous profit? Private party all the way. Did a quick CL search cars by owner range 9-12K There’s some nice nice cars. Some guy has a car listed for 12-13K and you show him 10K worth of hundreds, you’re driving away 90% of the time.
"probably going to buy [that] car in the next few days"
Based on the above, I’d say the dealer will win this one. Your chances of making a good deal are pretty slim if you’ve already settled on *that *car, and are in a hurry to get it.
What’s the rush? Good car deals happen when you need a vehicle that meets a certain set of requirements (not one particular car), and are taking your time to find it.
Good luck to you, but I’d betting on the dealer for this one. (Hope I’m wrong, tho’)
I was just in this siutation, as I bought a new car from a VA delership, but I live in MD. For your first question, generally, the policy varies by dealership. You can usually call anonymously to find out what their policies are. For us, there was a cap on the amount that could be processed as a credit card (4k in or case). It was worth it for us to maximize that as it means we get several percent back in rewards. They accepted a personal check from us, but I can imagine the rules vary by dealership. Do you mind me asking what car/dealership you are loking to buy from? I got to know a few of them, and would love to offer further insight.
Most dealerships in the DMV will register the car for you, give you temp tags, and mail your real tags to you once they receive them. You will pay the taxes for the state where the car will be registered regardless of where it’s bought. Maryland taxes are 6%. I think VA taxes are 3%, but you pay property taxes on the vehicle every year. Also, in our case, VA dealerships can often charge more because there is no cap on processing fees in VA (unlike MD). This can signifianty raise the price of a vehicle beyond the price quoted on the phone. Our “processing” would have added roughly $800 to the price of our car (roughly 32k out the door).
Negotiate via email. There is no reason to drive there as you will gain no advantage doing so. Don’t mention your trade-in, and get a firm price commitment before going in. This is a busy time for them, but also a time to get good deals as they want to bump up their sales numbers for the year. This is a good guide for buying new cars, but it would work just as well for a used one. Email all the dealerships nearby with that particularly car. Get the lowest price for a comparable car, then get them bidding against themselves. Although we were buying a new car, we got them down to nearly 5k under msrp., and well below the truecar price and costco price. Make sure they commit to a price before you go it, and also that the it’s the “out the door” price, inclusive of processing fees and taxes Lastly, depending on the dealership and the type of car, they may be offering 0% financing, so keep that in mind. iIf you are able to qualify for that, it would be to your benefit. Good luck!
Is this trick really that effective? From talking to dealers, they really don’t care about cash, because whether you pay by cash, personal check, certified check, or finance the vehicle, in the end it is all cash to them.
It’s not like the guy on Craiglist who would like cash because he knows he will get paid and can get away with not reporting it to the IRS. If they are running a legitimate business, it goes through the books.
From my experience, this doesn’t give you a leg up because then when you mention the trade in, they will rip you blind making the earlier price quote that you drove in for not such a good deal.
So, then you back off and say that you will sell your vehicle on the private market (which is a pain in the ass—you now have two cars to insure, license, pay taxes on etc. at least for time) they will say that they “thought” that you had a car to trade-in and that was a “trade-in” price.
You will go nuts and ask them why they thought that since you didn’t mention a trade in or what difference that would make and they would blame somebody for taking down the wrong information. Or they would say that the price was contingent on using their financing which you unfortunately only qualify for an 8% rate, or something, something, anything to mess with you.
About 5 to 10 years ago the internet trick was great. Now dealers have adjusted to it.
I sold cars for awhile. Salesmen love cash transactions because they don’t have to worry about the deal falling apart due to bad credit. However, the dealership hates cash transactions because they often make most of their profits on the back-end with the financing.
If a bank approves a customer for x% on a loan, and the dealer gets the customer to agree to finance at x+1%, the dealer gets to keep that +1% for themselves.
Not every dealership is out to screw you. Of course they want to make money, but they also channel their energy where it is gonna be most profitable. They generally aren’t trying to screw people who have done their homework, and who are willing to walk out. That said, I should have been more clear. I think the OP should treat the trade-in as a different transaction so to speak. He should try to do both before he sets foot in the door.
Regardless, the dynamics of the situation don’t change much. The dealer wants as much profit as possible, while you want to pay as little as possible. The negotiation via email just ensures that you don’t get pressured into a bad deal while at the dealership. You are able to take a more dispassionate appraisal of the situation, and you get to skip over all the layers of salespeople you will see at the dealership. If you go in, you will basically have to talk to at least 3 people before you actually get the bottom line price. It’s important that you don’t start to see them as people, or else it’s harder to walk away from a bad deal if need be. Doing it via email generally cuts to the chase, and puts them in a position of having to compete against other dealers as oppsed to trying to break you down.
I completely disagree. It’s not an “internet trick”; it’s the availability of information coupled with the ability to avoid some of the high pressure tactics that give people well versed in salesmanship an advantage. Dealers can’t adjust any more than travel agents or the post office can. It’s a new age. It doesn’t mean they aren’t profitable, but the amount of dumb money out there has shrunk considerably. Dealerships may have adjusted in the sense that they have to try to make their money via financing, or volume, or servicing, etc., but the game has completely changed in the favor of the comsumer. There is little they can do about it. Now, mostly, they just tr to make it as hard as possble to get an email address to send anything to. Go ahead and try to find an email address for your local dealership. You will likely just find a form email on their website. As much as you think they may have adjusted, they seem to just want to make the process of negotiating outside the office as seemingly inconvient as possible because they know they lose that battle most of the time.
So even though you probably can’t strong arm them into selling vehicles below cost, you can be far more certain you are getting a good deal than any outsider was in the past. For example, for the car I just bought. I could see exactly what others paid for the same car in my area, the invoice price, the msrp, the inventory at most dealerships in my area, and the price offered by yhe individual dealerships. There is basically no information assymmetry anymore. While I am fairly confident the dealership made a tiny profit, I know I paid less than damn near anyone for the car I got.
