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  • Negotiation Prices of a Brand New Car. Who Has Experience?

    I've done research, but I don't have first-hand experience of negotiating prices for a brand new car.

    The things I know so far are:

    -Never pay MSRP
    -Invoice pricing is NOT what a dealer pays for the car
    -There's a 2-3% holdback that dealerships make from invoice pricing
    -A dealership will NEVER tell you how much they paid for their inventory
    -The only "fees" you should ever pay on top of car pricing are sales taxes, registration, and state title

    However, researching this stuff and actually using it are two completely different things.

    Who has experience negotiating a brand new car? How much under MSRP would you offer for a car that costs $19k?

    Do you have any strategies/tips to get excellent pricing at a dealership?

    How do you deal with hard-nosed car salesman? How do you get ridiculous fees waived?

    How much should I realistically expect to save off of Invoice pricing?

    I'm headed to a dealership to buy a brand new car next week, but I want to be armed with information from everywhere I can get it.

    CP to those who can offer advice. Thanks in advance
    Last edited by getlynched47; 06-21-2012, 09:00 AM.


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  • #2
    Ive never personally purchased a car, but I've heard that it can help if you buy during the end of the month because the dealerships need to make their sales goals and will be more eager to sell and easier to negotiate with since they have to meet those numbers.
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    • #3
      When I purchased my last car, I was at the Audi dealer for 6ish hours, and I was close to a lease deal on a Q7. However, it was about $40 more than I wanted on the monthly lease payment.

      What I ended up doing was leaving, telling them I was going to go to Lexus across the street and then come back if I couldn't find anything there..

      Next day, salesrep calls me, telling me if I wanted it still, (I had really set my mind on the Q7) and he offered it at the price I had first desired, $40 less on the monthly payment.

      They hate seeing people leave. They can't stand it. Its a strategy that may be useful.

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      • #4
        I'm terrible at cat and mouse games.

        A couple of years ago, we got a new car. It's like, "What's the best price you can give us?" He quotes a price. "No, not good enough. Are you sure that's the best?" That went on for a couple more rounds. We still didn't like the price and was ready to leave. He checked with his manager and came back with the offer we finally took.

        Attitude. Be friendly, but firm.

        $3,000 off? Would that be reasonable?

        sb and SOS have great points.

        Oh, after the deal is done, they'll send in some person to try and sell you other stuff. Warranties (some are good), treatment for upholstery, special coating for the paint so that bird droppings don't corrode it...Don't let them talk you into something you don't need. Take your time to think things through.

        You'll do great. Remember to post pictures.
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        • #5
          If you know the car you want already (you've done your research & test driven it) it's a good idea to have some preliminary conversations on the telephone. I'd suggest contacting more than one dealer and let them know you're shopping around. They'll want your business and will be more inclined to deal that way.

          Car salespeople are just doing their jobs when they try to strike the best deal possible for them, so don't take any of the exchanges personally. Keeping a detached, level-headed approach will work best for you in the end. Ultimately, if you don't feel like you can accept the deal - leave. Shop somewhere else. You are not beholden to a sales person just because they spend time talking to you (even if it's hours long).

          I once bought a car for $75 more than the dealer paid. I've also bought a car at sticker price. I've also bought a car for a few hundred more than I knew I could buy it elsewhere. Every deal is different - just try to find one that you can live with.
          Originally posted by Broncoholic3233
          FF is awesome!

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          • #6
            I have three principles that I keep in mind:

            1. You are correct about the "extras" on top of the price. Keep those limited to tax, tags, and title.

            2. Dealer invoice is "close enough" to a good deal. Yes, they're still making money at dealer invoice (and you can tell them that with confidence). But if they are close to that, say $300, you've gotten a pretty good deal. Sometimes you can do better because of the timing, the inventory they need to get rid of, the car itself is an undesirable option package, etc. But your goal should be somewhere around dealer invoice. If you're trying to cut it so far to the bone that they don't make any money, it seems like playing games.

            3. This is important -- for your negotiation position, don't be all "Well, then I'm not sure I want it, maybe I need to go away." Ironically, that's not as exciting to them as "I'd like to buy this today, if I can the price where I need it to be." Every time they try to sell you on the car, you can just go "I know, that's why I came prepared to buy it today if I can get the price where I need it to be." They know what you're doing -- but they also learn that you are serious, and if they hang with it, they'll get a sale today. And they need to wrap it up to get their commission and start selling another.

            Also -- if you want something else, like floormats, bedliner, or some other feature they sell, don't mention wanting it or say you want it. Wait until they've proposed a price you're willing to accept, then close the deal with "If you throw in a ________, we've got a deal."

            Turn down all the post sale preparation that costs money -- scotch guarding, undercoating, everything. It's all a racket. That car rolled off the assembly condition ready to go. And you can scotchguard your heart out, doing it yourself.

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            • #7
              Excellent advice from all of you.

              Is a dealer invoice readily available, or will I have to twist their arm to get it?

              I also heard that dealer invoice is a bullcrap number used to set a negotiating floor, when they actually pay much less for the car.

              http://www.carbuyingtips.com/car4.htm

              How To Read A Factory Invoice
              The factory invoice lists the base model of the car, and all option packages, floor mats, body trims, etc. It also lists destination charge, holdback and dealer flooring assistance. But the dealer gets the holdback and floor plan back from the factory after they sell the car, so have them remove it. Destination charge is not refundable, we pay the dealer, the dealer pays the factory. I have 2 examples below to get you familiar with reading invoices. One is for a cow, the other is an actual invoice I have for a 1998 Mitsubishi Eclipse. Note how the fees add up, and Mitsubishi loves to charge YOU for holdback and flooring assistance, double collecting. Don't believe the "invoice" the dealer tears off the printer it's no invoice. The invoice is a copy of the actual invoice with the car maker's logo on it and the dealer's address for delivery. Don't confuse the "invoice" with the white MSRP window sticker!

              How much did the dealer really pay for that car?
              This is a well guarded secret. They'll pull out the "factory invoice" and offer "$1 over invoice". They are not required to show you the invoice. There are hidden factory incentives built into this "invoice price" that reduce their cost. If they are quick to show you the invoice, you know they are making money, and can settle for even less. This info is your most powerful ammo in negotiating with the dealer. They'll convince you that you can afford the car at MSRP, diverting attention away from "is it worth this price". Do the same to them. Tell them how much profit they'll make with your offer. You've just turned the tables on them.
              True?


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              • #8
                Originally posted by getlynched47 View Post
                Excellent advice from all of you.

                Is a dealer invoice readily available, or will I have to twist their arm to get it?

                I also heard that dealer invoice is a bullcrap number used to set a negotiating floor, when they actually pay much less for the car.

                http://www.carbuyingtips.com/car4.htm



                True?
                If they're waving it in front of you, it's something they're making money on. You should be able to find out a good estimate of dealer invoice online, at places like Edmunds.com. Google different things -- true dealer cost, dealer invoice, etc. You can also find out a lot on the message boards for the car you are buying, if it has a following.

                Here's a website I just found which explains a good way to go about it. http://www.car-buying-strategies.com/dealer-cost.html

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                • #9
                  Originally posted by Jay3 View Post
                  If they're waving it in front of you, it's something they're making money on. You should be able to find out a good estimate of dealer invoice online, at places like Edmunds.com. Google different things -- true dealer cost, dealer invoice, etc. You can also find out a lot on the message boards for the car you are buying, if it has a following.

                  Here's a website I just found which explains a good way to go about it. http://www.car-buying-strategies.com/dealer-cost.html
                  Interesting. That's very good information. Thank you!

                  So what do I do if a dealer doesn't want to show me an invoice price or tell me their true dealer cost?


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                  • #10
                    Originally posted by getlynched47 View Post
                    Interesting. That's very good information. Thank you!

                    So what do I do if a dealer doesn't want to show me an invoice price or tell me their true dealer cost?
                    Go in with a general ballpark idea, and what the max you are willing to pay.

                    Offer them well under then your max and close to your researched amount. They need to make a profit as well, and each dealership will have different costs (overhead, payroll, etc). If they are not willing to meet you at a price you are willing to pay, there's nothing you can do about it. You'll either have to re-evaluate your cap, or try somewhere else.

                    There's no secrets. If you are informed going in and stay firm to your budgeted amount, you won't be ripped off. If something feels off or wrong, go somewhere else. Be respecful, even if the individuals you are dealing with are annoying. Also, be respectful of their need to pay the bills, pay their employees, and earn a profit. If the deal isn't right for you, don't take it.

                    Most importantly, don't let them bully you. Any price they offer you today will be good tomorrow. They will try all sorts of tactics to get you to sign that day. They know if they let you out the door, your likely not coming back. You are the customer - you owe them nothing. You are not wasting their time, it's their job. Take your time.

                    The most important thing by far is going in prepared. Know what is important to you - what options you want, what you can do without. If you are uncomfortable in any way, address that before signing anything. Especially with smartphones, you can look up information online quickly. If they are refusing to provide you information you feel is critical, then call around and find somewhere that will provide that info.

                    Another thing to consider, are you paying cash? Or do you need a loan? If you need a loan, check with your bank what you would qualify for, and at what rates. Interest rates can have a huge impact on your monthly payments, and different dealerships use different banks. You might pay more somewhere else, but over the lenght of the loan pay less because the rate is lower.
                    Last edited by PowderAddict; 06-21-2012, 01:38 PM.

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                    • #11
                      Rule #1 in buying a car:

                      Never buy new.

                      The best value is in a vehicle 2 or 3 years old with less than 50k miles.
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                      • #12
                        Originally posted by Al Wilson 4 Mayor View Post
                        Rule #1 in buying a car:

                        Never buy new.

                        The best value is in a vehicle 2 or 3 years old with less than 50k miles.
                        Doing so would only save me like $3k-$4k, and I would have no idea whether the car was taken care of properly.


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                        • #13
                          Originally posted by Jay3 View Post
                          I have three principles that I keep in mind:

                          1. You are correct about the "extras" on top of the price. Keep those limited to tax, tags, and title.

                          2. Dealer invoice is "close enough" to a good deal. Yes, they're still making money at dealer invoice (and you can tell them that with confidence). But if they are close to that, say $300, you've gotten a pretty good deal. Sometimes you can do better because of the timing, the inventory they need to get rid of, the car itself is an undesirable option package, etc. But your goal should be somewhere around dealer invoice. If you're trying to cut it so far to the bone that they don't make any money, it seems like playing games.

                          3. This is important -- for your negotiation position, don't be all "Well, then I'm not sure I want it, maybe I need to go away." Ironically, that's not as exciting to them as "I'd like to buy this today, if I can the price where I need it to be." Every time they try to sell you on the car, you can just go "I know, that's why I came prepared to buy it today if I can get the price where I need it to be." They know what you're doing -- but they also learn that you are serious, and if they hang with it, they'll get a sale today. And they need to wrap it up to get their commission and start selling another.

                          Also -- if you want something else, like floormats, bedliner, or some other feature they sell, don't mention wanting it or say you want it. Wait until they've proposed a price you're willing to accept, then close the deal with "If you throw in a ________, we've got a deal."

                          Turn down all the post sale preparation that costs money -- scotch guarding, undercoating, everything. It's all a racket. That car rolled off the assembly condition ready to go. And you can scotchguard your heart out, doing it yourself.
                          Good stuff in this post.. especially about the extras like the mats or the bed liners or what not. I got some nice chrome and some running boards tossed in last time on my truck

                          Originally posted by Al Wilson 4 Mayor View Post
                          Rule #1 in buying a car:

                          Never buy new.

                          The best value is in a vehicle 2 or 3 years old with less than 50k miles.
                          and this is very true.

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                          • #14
                            Would it be better for me to be pre-approved for a car loan from my bank prior to going car shopping?


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                            • #15
                              Originally posted by getlynched47 View Post
                              Would it be better for me to be pre-approved for a car loan from my bank prior to going car shopping?
                              It can help , and at the very least you should know approximately what terms and interest rate you can get from other lenders, so you'll know whether financing through the dealership is worth it. But do keep in mind that many factory incentives or rebates require that you finance through the car manufacturer, so you may need to calculate which saves you more money.

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