Negotiating a New Car Price -- Your Stories.

[Big TR]

We bought an 07 Honda Pilot a few months ago.

Step 1: Used our super credit rating to get a blank check pre-approval for financing from Capital One.

Step 2: I emailed several dealerships in the area and got their lowest internet price.

I went to this website: http://www.carbuyingtips.com/car4.htm
and downloaded this spreadsheet : http://www.carbuyingtips.com/offer.xls

I then looked around Edmunds to get invoice, holdback, factory to dealer incentives, etc., information.

Step 3: I took the lowest offer to the dealer closest to my house, whom I didn't get a quote from, and told them to beat the lowest offer and get my color. They did and we got $6,200k off the MSRP, ~20%.

Step 4: I told them if they could beat the rate on the financing, they could finance my purchase. They beat it by a few basis points, so that helped them make a little money.

Step 5: I told them if they gave me a fair price on my trade in, I'd sell it to them. Otherwise I'd just private party sell it. It was a fair offer based on work needed to be done on the 6 year old vehicle and my hassel to sell it and the tax credit I got on the net new purchase price.

Done and done. The happy wife has her new gas guzzler.

[MegaFossil]

Since some of the people in this thread used to be dealers I was wondering if they could answer a question I've always had.

Do dealers like it when you can just pay for the entire car on the spot with cash or would they rather have you finance the car b/c they can make a little more on bad finance deals?

[CappyAA]

Big TR has some good points in there.

I just recently bought a car 2 weeks ago and I used the fax attack method recommended by fightingchance.com. I strongly recommend this method.

The gist of it all is that you contact 8-10 dealerships around you and tell them that you are going to buy a car and that you'd like to communicate via fax. Make sure you talk to the manager and not some lowly salesman in the chain. After you speak with the manager and get their fax info, the packet fighting chance sends you includes a great template fax to send over them as well as all invoice prices, holdback, incentives, etc. Include this in your fax.

You will probably get responses from 5-6 dealers which will quote you a price. You can also use this by renegotiating with dealers (i.e. some dealers will beat other dealer's prices).

I bought an '08 Infiniti G37 Coupe fully loaded. The MSRP was about $44k and the invoice was $39k. I calculated using the car buying tips spreadsheet that a $41k offer would be good and fair. Well I got a $41k offer from one dealer and another brought that offer down to $40k. So the method got me $4000 under MSRP (~10%) on a model that just came out 2 months ago. The $40 I spent on the packet (which was like 50 pages worth of info) was well worth it.

[One Outer]

Salesman don't care, but people who do that generally are going to be total asses about price. The finance people, or course, hate it.

[One Outer]

[ QUOTE ]
Great stuff, everyone.

Some questions.

Is there a simple resource that should tell me what invoice is for a Matrix?

The dealership told me yesterday that their "break-even" price was $18,515 (the sticker is $20,060). I wish I knew if that were truly their break-even.

My two current offers (which should improve today):

1) $400 trade for my falling-apart 1998 Dodge Neon with 136k miles, additional $1300 off, total price of $18,315. Dealer tells me that this would be selling it at "$200 above break-even." Warranty is standard 5-year, 60k on power train.

2) $500 trade; $900 off for a total of $18,660. Lifetime warranty on power train, but warranty seems designed to be voided.

Both dealers have said, "We could re-evaluate the trade value."

[/ QUOTE ]

I kind of suspected that that would be the case with the Matrix, given that the Vibe is the same vehicle. Don't expect to do any of this with any other Toyota model.

The price they're giving you is legit. I'd be shocked if that were more than $400 over invoice. And that would about be their breakeven point. As a general rule, competition is such that when it comes to new cars the salesman is going to be completely up front with you about price (ask him to show you the invoice- he'll do it). The things you really need to pay attention to in a new car transaction are the trade allowance and the fine print back in finance.

Especially the trade. I made thousands off stepping on trades when I sold cars. For instance, say the used car manager appraises your Neon at $800. If it were me I would show you $400 because the difference between what I give you on paper and the appraisal gets rolled into the profit on the deal. And commissions where I worked went into holdback. So say the holdback is $800 (about right for this price), they're selling it for $200 over invoice, so we have $1000 "profit" the salesman is getting paid on. Where I worked we got 25% base. So if he steps on your trade he has added $400 dollars to his deal, so instead of getting $250 he now gets $350. See?

I can remember one deal where this guy was trading in an Audi special edition A4 he had owned for only four months. He had no idea how special his car was and I could tell that he had only researched the value of an ordinary A4. I managed to step on his wholesale value by $3000. That was an extra $750 for me. That's pure profit, like selling stolen merchandise or pot you grew yourself, but legal and with a lot less work. The best part was now that we owned it for way less than it was worth I bought it myself for only $500 over what we paid for it. I still drive it.

They can do better on your trade. That's a crappy car, but they will turn around and wholesale it for $1000 or so. Don't try and take all of that wholesale money away from them, but you should be trying to get between $600-800 for the Neon.

You're way better off letting the dealer take care of the trade for you. Provided you don't let them steal it, you come out way ahead in time, aggravation and money (remember, you have to pay the state sales tax when you sell your car!) when you trade it in.

[Stagger_Lee]

I got referred to a car broker from the independent car financer that I used. I have done this twice, with two different brokers and I will never buy a car another way.

In both cases the guys were self employed & this is all they do - find cars for people.

All you have to do is go to the dealership they do the deal with and pick up the car. Dealers I know do not like these brokers. In both cases I saved thousands and saved heaps of time.


To anser another question re: cash sales. From what I gather salesmen don't really care - they want the sale. If you are dealing with the owner of the business you may fare better with cash & you may get two receipts.

In one place I know the salesmen were getting better commission from the F&I guys (Finance & Insurance) than they were from their own boss. So a lot of stock was sold 'at cost' as long as the F&I deal went with it. Until the owner realised what was going on. No margin in nothing.

[rjoefish]

[ QUOTE ]
If they are saying they "could re-evaluate the trade-in price", then they'll do it. My wife and I just bought a new 2006 Chevrolet SUV-wagon thingy (forget the name) and traded in her Grand Prix. The dealership we went to had a decent offer, but above what I was willing to pay, so we left. Thanked them for their time and walked out.

Two days later, the saleswoman's (yes, girls sell cars too silly) manager's manager calls us and they go up a little on the trade and down on the vehicle price. We politely tell them that this is still above what we are looking to pay and the hard line amount we set when we first walked in is a hard line.

Anyways, three days after that, the same manager calls us and says that he "thinks he can get his boss to go a little higher on the trade and they'll drop the vehicle price a bit more" which put us at the price range we had originally asked for.

So, by holding out one week, the dealership dropped the vehicle price around $2,500 and upped our trade-in by about $1,500. The even funnier part was the sticker price we saw on the vehicle at the lot was about $3,000 over what my wife had seen it listed as on the Internet.

The saleswoman asked us where we found that price and said "she couldn't find it listed at that". My wife was ready for this and told her the exact website and location of the vehicle and sure enough, it was listed for the lower price. She 'went to talk to her manager' about it and came back saying "because you saw it at this price, we'll honor that".

To myself, I was like LDO you will. If you didn't, I'm walking off your lot now.

Bottom line is if the dealership wants to sell you the car bad enough and your price range for trade-in and vehicle price is reasonable, they'll find a way to do it.

We estimated that by researching the Internet pricing and holding out for that week saved us between $7,000-8,000 total on the car.

[/ QUOTE ]

The internet [censored] happens to me all the time. I'll be out on the lot and the price is on the window and they're like 'we saw this for blah blah blah, what's the deal' so I go check the computer and they don't have anything listed in our inventory screens but if I ask my manager he'll tell me that the used car manager put an internet special on it or some [censored]. It's annoying as hell sometimes.

[NajdorfDefense]

[ QUOTE ]
Big TR has some good points in there.

I just recently bought a car 2 weeks ago and I used the fax attack method recommended by fightingchance.com. I strongly recommend this method.

The gist of it all is that you contact 8-10 dealerships around you and tell them that you are going to buy a car and that you'd like to communicate via fax. Make sure you talk to the manager and not some lowly salesman in the chain. After you speak with the manager and get their fax info, the packet fighting chance sends you includes a great template fax to send over them as well as all invoice prices, holdback, incentives, etc. Include this in your fax.

You will probably get responses from 5-6 dealers which will quote you a price. You can also use this by renegotiating with dealers (i.e. some dealers will beat other dealer's prices).

I bought an '08 Infiniti G37 Coupe fully loaded. The MSRP was about $44k and the invoice was $39k. I calculated using the car buying tips spreadsheet that a $41k offer would be good and fair. Well I got a $41k offer from one dealer and another brought that offer down to $40k. So the method got me $4000 under MSRP (~10%) on a model that just came out 2 months ago. The $40 I spent on the packet (which was like 50 pages worth of info) was well worth it.

[/ QUOTE ]

Bingo. There were 3 places close to me and a 4th 20mins away so I just did it in person. I did it at the end of the month too, when I went back to lowest bid he chopped another $500 off the price to get me to sign that day. [monthly sales contests ftw!]

'Dealer Invoice' is a nonsense number, Without knowing demand, holdback, etc, etc it just makes you feel good knowing you paid $500 over or whatever, not knowing dealer was getting $3k in holdback and incentives and was willing to go lower.