Qs about buying a used car from a dealer, need answers fast!

[Tim_T-Bonham.net]

@jtgain

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.

Well, I don’t think it’s as effective as it used to be.
Mainly because a lot of dealers would prefer that you finance the vehicle through them – then they make a profit on both the sale and the financed payments.

Cash is a little bit better than checks or credit cards, because those cost the dealer in fees or reserve for bad checks.

The main advantage of this technique seems to be a psychological one – the salesman sees that bundle of cash right there on his desk, starts to think about part of that being his commission, … That’s part of the reason the salesman will ‘have to get approval from his manager’ – the manager doesn’t see the bundle of cash in front of him, and is less influenced by it.

[UltraVires]

@brickbacon

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.

I don’t necessarily disagree with anything you said. My points were that even if you do your homework and get a bottom-line out the door price over the internet, they still can’t give you a firm price on your trade-in without seeing the vehicle. And while, they sometimes aren’t out simply to screw you, they will try to make up whatever profits they lost by low balling your trade-in. (See the interior is worn, hair line cracks in the dash, etc.) The trade in that you rated as “good” and worth $3700, they rate as “below average” and offer $1150. The last time I bought a car, after several hours of negotiating the trade in price, the paperwork came back with a $300 “reconditioning fee” on my trade-in. They said it was standard and non-waiveable. I asked for my keys back, and the salesperson came back and said that his manager agreed to knock it down to $100 and surely I wouldn’t walk over $100 on this deal. I said I would and made it to the car before the salesperson came to my window and agreed to take the final $100 off.

So you are now doing the same dance that you used to do, now only on the trade-in side. Sure, you can walk if they do this, but you’ve already seen the shiny new car, they’ve got your old keys, etc. Basically the same as pre-internet days.