OT: Car Dealers sales tactics

[BobbyJones]

I was just watching a Canadian news shows about car dealers and their sales and advertising practices.

Certain comments were made like "the consumer doesn't stand a chance", etc. Which got me thinking: is every dealer just out to (dishonestly) squeeze every last little bit out of a deal?

I personally have only only purchased two cars from dealers...the salesmen were great and straight forward, but the FI guy on the last one tried to squeeze me right before delivery, tarnishing an otherwise perfect experience.

Is it really like this everywhere?

[papa bless]

Absolutely. You're just another customer walking into the dealership looking to spend. You're a walking wallet, and it's their job to get inside of it. Being buddy-buddy with you and talking like an honest John just gets them closer to the sale.

[Tickdoc]

I was just watching a Canadian news shows about car dealers and their sales and advertising practices.

Certain comments were made like "the consumer doesn't stand a chance", etc. Which got me thinking: is every dealer just out to (dishonestly) squeeze every last little bit out of a deal?

I personally have only only purchased two cars from dealers...the salesmen were great and straight forward, but the FI guy on the last one tried to squeeze me right before delivery, tarnishing an otherwise perfect experience.

Is it really like this everywhere?

I would counter that it is only for the uninformed. My last deal was done over the phone a state away, and was smooth and painless.

I gave them a deposit over the phone, car was ready when I got there, and whole process was done in about 20 min.

There was no pressure to add extras. I added a tire and wheel insurance package at my request, not theirs.

With a little research prior to closing the deal, you should have a very close estimate as to what you should actually have to pay, and letting them know that up front takes all of their negotiating power away.

[old fat man]

I have a hard time thinking of many big elective purchases that are less enjoyable than car buying.

[OtayBW]

I agree that if you do your due diligence (doo be doo be doo...), you can work with the internet sales rep and cut out a lot of the schlock that used to be ever present.

[quickfeet]

I love buying cars, I’ve have never paid more than exactly what I wanted to.

[bigbill]

I've done two cars through my bank which uses True Car. The price online is what I paid plus tax and title. With my son's car, it was a two year old Ford Focus that was on True Car for $11K. I set it up and when I arrived at the dealer a salesperson told me it was $12,995 and I mentioned the True Car price and that's what I paid. Nothing but good things to say about it.

[Ozz]

I agree that if you do your due diligence (doo be doo be doo...), you can work with the internet sales rep and cut out a lot of the schlock that used to be ever present.

+1

We bought a Prius back in 2008...went to dealer, talked to rep, test drive, whole 9 yards. Told the guy I didn't want to haggle, and to give us his best price, and that I was going to check the internet to make sure it was reasonable. Turns out another dealer had same car for $1500 less via internet sales guy....if it was within $500 I would have bought from first guy, but that difference was too great. I called the first guy to let him know, and he was pissed I didn't let him counter....then he hung up on me. Nice.

Bought an Audi a couple years ago....went straight to internet to get pricing. Painless process.

[echappist]

+1

We bought a Prius back in 2008...went to dealer, talked to rep, test drive, whole 9 yards. Told the guy I didn't want to haggle, and to give us his best price, and that I was going to check the internet to make sure it was reasonable. Turns out another dealer had same car for $1500 less via internet sales guy....if it was within $500 I would have bought from first guy, but that difference was too great. I called the first guy to let him know, and he was pissed I didn't let him counter....then he hung up on me. Nice.

Bought an Audi a couple years ago....went straight to internet to get pricing. Painless process.

here on the East Coast, the dealerships seem a lot more sneakier

case 1), the internet price doesn't include a bunch of other fees (etch fee, etc). The finance guy tried to get me to sign up for an useless warranty on the way out. Took me awhile to catch that. When I went back, he said, well, since your graduation certificate hasn't been shown (they agreed to graduate pricing), we'll give you the grad pricing as long as you get this warranty. I then told him in no uncertain terms that I have a letter from the dean stating I was to receive my diploma. He got quiet after and took off the warranty. F***ing lowlife.

case 2), the cars listed as available online are somehow unavailable when I go to the dealership. Happened at two dealerships...

[wc1934]

Timely thread - Wife just purchased a new Camry LE

Went to the auto mile (Providence Highway Boston).
First dealer was a huge volume but high pressure place - had to talk with the salesperson, then his boss, then the general manager all of whom continued to insist that they were providing the best deal possible etc. I had to insist that they give back our keys (gave them to the salesguy so that he could appraise our old car). Felt like they were keeping us hostages.

Went to another dealership 5 miles away and had the complete opposite experience. Vey low keyed - negotiated a few times back and forth without any pressure - Got more options for less money (even much better than tru car etc).

Guess it really depends upon the dealership as the 2nd experience was painless.

[MaraudingWalrus]

Yeah, bought a new car recently. It was advertised both on their website and cars.com and the like for about $10k below MSRP (so ~$44ish) on a 2018 Kia Stinger GT2 AWD that had been sitting in their showroom for about five months. I had previously driven a Stinger there (not that exact one), and had confirmed the pricing via phone before coming in. Showed up and wanted to buy the car outright (not financing it) for what it was listed as on their website, price out the door in a check. The guy came back with the paperwork for their "best out the door price" that was about $500 below MSRP. After a series of alternately laughing and telling them to go bleep themselves, I eventually wound up paying about $500ish or something more than what it was advertised for.

It's a truly awful experience. Their dealer experience really has to change if they want someone to legitimately cross shop that car with an Audi or BMW etc.

[TiminVA]

The last few vehicles I've purchased were done completely online or by phone. I had the price before I ever stepped foot on the lot. Most recent was 3 years ago and we were in and out of the dealership in about 40 minutes. The dealership was under renovation and they could only accommodate one customer at a time or it would have been about 20 minutes. The vehicle before, my wife's Jeep, was actually delivered to us from a dealer 2 hours away. Never met the sales guy in person. I contact every dealer within about 3 hours and let their internet sales depts fight amongst themselves.

[buddybikes]

One issue I see here, people buying car without trade. Assume you were selling it yourself. This is where all the advertising goes out the window.

This doc fee is crazy, fortunately in Rhode Island they limit it to 200.00 bet it will reach 1000 before long.

[tbike4]

Some of you guys either got lucky or just know how to do the deal properly. This subject makes me want to stick a pencil in my ear, all the way in. I bought a car 3 months ago and I said to myself and friends, "this is going to be easy". Not like the last car I bought 7 years ago. Ha.

I did the research, ALL of the websites, knew what I wanted, fair market price, went to a dealer close by so I could drive it to make sure. Told him, I am shopping price now and this is what I will pay. A couple of times I literally had to tell the salesman, stop talking now, it's my turn. I was paying cash so he knew there was no money to be made in financing, no haggling on that. Should be a done deal. Don't get me started on paying cash and the OFAC list. :eek: https://www.carbuyingtips.com/articles/blog/why-car-dealers-want-to-check-your-background-when-you-pay-cash.htm

I need to be a d£¢∞ I guess to avoid time wasters. I said, "I am not going into anyone's office. I am not even going to sit down". I'll bring a check, you hand me the keys. OK, a piece of paper does need to be signed.

It must be in the DNA of some salesmen/car dealers to do things the same way as it was 30 years ago. I need a lesson from TiminVA for the next car I buy.

[John H.]

Like Tickdoc says- just be ready.
1.) Know what you want to pay.
2.) Know what you want to buy- Options, etc..
3.) Know what the best financing you can get, or have financing secure ahead of time.
4.) In a best case scenario- Don't trade in. Makes for too much grey area- Sell ahead of new purchase.
5.) Stick to your guns and be willing to walk if all is not kosher.

The last new car I bought was in 2014. I shopped over the internet and found my car at my price.
I then called the local dealer and said "can you get this exact car at this price?"- "If yes, I get the car from you". "If no, I drive to the dealer who has it and buy from them".
They got me the car and we did the deal.
I wrote them a check so there were no finance or trade games.

[Ralph]

Salesmen from large national chains are well trained in how to maximize the profit of every sale. Like you guys, I hate their tactics. Will go out of my way to deal with a small one dealership family business.

Strangely....the business of selling new cars is not particularly profitable. Selling used cars and service is a lot better business.

Generally, I think best bet is to make your deal from a distance. That way they can't blow smoke in your face and use their hi pressure tactics. They are better at this than we are, they do it all day every day. Most of those great deals you think you got.....guarantee they did very well.

BTW.....In past, I was always a cash buyer. But now believe you can make a better deal (usually) if you finance some or all. There are usually some incentives they can pass on if you finance. Then pay it off in a couple months. Paying cash doesn't impress them (or make a better deal) ....they get cash anyway...from you or your bank. And I won't even get into argument about opportunity cost (to you) from paying cash.

[rwsaunders]

Worth a listen if only for the fact that one gets to hear the behind the scenes activity in a NY car (JEEP) dealer.

https://www.thisamericanlife.org/513/129-cars

[PaMtbRider]

As much as I hate the process of buying a new car, selling a used one is worse. Dealing with all the window lickers who have no means or intention to buy your car gets frustrating fast.

[Hilltopperny]

I worked for a dealership in Central New York state for a few months. As a salesman they teach you to squeeze every last penny out of the consumer. It is a very shady business and the tactics used are awful.

The best time to shop for a new vehicle is towards the end of the month as there are quotas to fill. Purchasing on the last day of the month will net you the best deal.


Never agree to first pen and expect to be there for hours in almost every case. The longer you are at the dealership the more you are invested in purchasing the car. The dealership will add a couple of percentage points to your loan if financing to make extra $ if they can. They will also try and sell their extended warranty for extra $.

I did very well for a first time Salesman, but just like the consumer the dealership will fudge profits and move them around so the new guys do not get the commissions that they deserve. I observed a lot of shady business and left shortly after realizing my commission checks were nowhere near what they were supposed to be...

Sent from my XT1650 using Tapatalk

[alancw3]

Timely thread - Wife just purchased a new Camry LE

Went to the auto mile (Providence Highway Boston).
First dealer was a huge volume but high pressure place - had to talk with the salesperson, then his boss, then the general manager all of whom continued to insist that they were providing the best deal possible etc. I had to insist that they give back our keys (gave them to the salesguy so that he could appraise our old car). Felt like they were keeping us hostages.

Went to another dealership 5 miles away and had the complete opposite experience. Vey low keyed - negotiated a few times back and forth without any pressure - Got more options for less money (even much better than tru car etc).

Guess it really depends upon the dealership as the 2nd experience was painless.

had a similar experience in a mega ford dealership many years ago. couldn't get my keys back after being bombarded by salesman, sales manager and general manager with their respective sales pitches. finally I got so annoyed that I told salesman that if I did not have my keys back in one minute I was calling the sheriff's department to report the theft of my car. I had the keys within that minute and walked out the door without saying another word to salesman.

[oldpotatoe]

I was just watching a Canadian news shows about car dealers and their sales and advertising practices.

Certain comments were made like "the consumer doesn't stand a chance", etc. Which got me thinking: is every dealer just out to (dishonestly) squeeze every last little bit out of a deal?

I personally have only only purchased two cars from dealers...the salesmen were great and straight forward, but the FI guy on the last one tried to squeeze me right before delivery, tarnishing an otherwise perfect experience.

Is it really like this everywhere?

How 'dishonestly'?? Particularly in this interweb, all info, all the time, age?
If you don't like what you are buying, let your boots do the walkin'...

BUT car dealers work on an astonishingly small margins, get factory incentives and kickbacks..get their $ on accessories, clear coat, type stuff.

BUT do your research, know what you want. Walk if it isn't what you want or expect.

[TiminVA]

Only lesson I can provide is don't go to the dealership until you have the final out the door price in writing.

Some of you guys either got lucky or just know how to do the deal properly. This subject makes me want to stick a pencil in my ear, all the way in. I bought a car 3 months ago and I said to myself and friends, "this is going to be easy". Not like the last car I bought 7 years ago. Ha.

I did the research, ALL of the websites, knew what I wanted, fair market price, went to a dealer close by so I could drive it to make sure. Told him, I am shopping price now and this is what I will pay. A couple of times I literally had to tell the salesman, stop talking now, it's my turn. I was paying cash so he knew there was no money to be made in financing, no haggling on that. Should be a done deal. Don't get me started on paying cash and the OFAC list. :eek: https://www.carbuyingtips.com/articles/blog/why-car-dealers-want-to-check-your-background-when-you-pay-cash.htm

I need to be a d£¢∞ I guess to avoid time wasters. I said, "I am not going into anyone's office. I am not even going to sit down". I'll bring a check, you hand me the keys. OK, a piece of paper does need to be signed.

It must be in the DNA of some salesmen/car dealers to do things the same way as it was 30 years ago. I need a lesson from TiminVA for the next car I buy.

[Tickdoc]

Some of you guys either got lucky or just know how to do the deal properly. This subject makes me want to stick a pencil in my ear, all the way in. I bought a car 3 months ago and I said to myself and friends, "this is going to be easy". Not like the last car I bought 7 years ago. Ha.

I did the research, ALL of the websites, knew what I wanted, fair market price, went to a dealer close by so I could drive it to make sure. Told him, I am shopping price now and this is what I will pay. A couple of times I literally had to tell the salesman, stop talking now, it's my turn. I was paying cash so he knew there was no money to be made in financing, no haggling on that. Should be a done deal. Don't get me started on paying cash and the OFAC list. :eek: https://www.carbuyingtips.com/articles/blog/why-car-dealers-want-to-check-your-background-when-you-pay-cash.htm

I need to be a d£¢∞ I guess to avoid time wasters. I said, "I am not going into anyone's office. I am not even going to sit down". I'll bring a check, you hand me the keys. OK, a piece of paper does need to be signed.

It must be in the DNA of some salesmen/car dealers to do things the same way as it was 30 years ago. I need a lesson from TiminVA for the next car I buy.

Left off the hardest and most important piece of the car buying experience....Always realize that at any point you can and should walk away.

It used to be the last resort necessary step or final negotiating tactic, but it works.

Cars are aplenty and there are always deals to be had. I've had sales guys literally chase me out the door from walking away.

[soulspinner]

How 'dishonestly'?? Particularly in this interweb, all info, all the time, age?
If you don't like what you are buying, let your boots do the walkin'...

BUT car dealers work on an astonishingly small margins, get factory incentives and kickbacks..get their $ on accessories, clear coat, type stuff.

BUT do your research, know what you want. Walk if it isn't what you want or expect.

This. With all the info consumers have, they should know within very small limits what they should pay. The margin on a Trek bicycle frame is several times whats above invoice on a car...ie 45 percent vs 6-8 on our cars.

[AngryScientist]

I buy all [very] used cars for myself , but we wanted a new van a few years ago so we decided to buy a Honda for the family car.

This time I used USAA’s car buying service. I found the exact van I wanted online with the exact options I wanted (none!!) and gave USAA the VIN and they negotiated the final price on my behalf. This is what they do so I assume they are decent at it and can use a little more leverage than a single consumer. I financed the van through USAA also; so that was painless

I don’t know if I got the absolute lowest price but the zero hassle on my part was worth it. I would do it that was again if I ever need a new car.

[wallymann]

...Generally, I think best bet is to make your deal from a distance...

this. bought a pre-owned car last summer from a small outfit. found online, got the details remotely, price was nice, drove to chicago, negotiated a trade-value on my vehicle, was out the door in 15 minutes driving home in my "new" whip happy as a clam!

[fmradio516]

I "helped" my wife buy her new Subaru in Boston before we were married. It was such a PITA. We called dealers asking what they had and for what price, we took off of work to travel to said dealers, and when we get there they go "Oh we dont have that car for that price. I thought you meant this other model, sorry.. but while I have you, lets sit down and talk". We eventually got a good deal on the crosstrek she wanted but now she wants automatic instead of standard so I think we'll be going through the process again.

I also like the fact that during the test ride of the vehicle, the dealer will tell you
to pretty much beat the crap out of it and rev it as much as you want on a car with 20 miles on it, so you can get the feel of it. and then when you go to buy a car, they tell you to baby it for the first 1000 miles and not to rev it too high during the break in period.

[Bentley]

Like Tickdoc says- just be ready.
1.) Know what you want to pay.
2.) Know what you want to buy- Options, etc..
3.) Know what the best financing you can get, or have financing secure ahead of time.
4.) In a best case scenario- Don't trade in. Makes for too much grey area- Sell ahead of new purchase.
5.) Stick to your guns and be willing to walk if all is not kosher.

The last new car I bought was in 2014. I shopped over the internet and found my car at my price.
I then called the local dealer and said "can you get this exact car at this price?"- "If yes, I get the car from you". "If no, I drive to the dealer who has it and buy from them".
They got me the car and we did the deal.
I wrote them a check so there were no finance or trade games.

I would say this Is generally my approach, but I also think that having a “relationship” with the dealer helps. I have done a lot of business with a local guy, in fact the guy that sold me my first new car is now the GM, we still talk about that deal where he made $50 after a marathon negotiation. I’m sure he makes a little more than that today on the cars I buy, but he always treated me like a “Customer”, took my occasional service complaints, makes sure I’m taken care of. I get lots of service and no bs. All good

[NYCfixie]

...Guess it really depends upon the dealership...

In the past 2 years I have helped my mother purchase a new Subaru (in Denver from Boston) and my mother-in-law purchase a new Subaru (local to me in the Boston area) and my father (an Audi in NJ from Boston).

#1 Called Denver dealer from Boston, explained that two of my brothers and I would be covering the large deposit, that my younger brother would pick up the car with my mother when it was ready, that my mother was trading in an old Subaru that was worth nothing, and that I have owned two Subarus so he did not have to sell us on the car. All was negotiated over the phone, deposits made and of course on the day my mother and younger brother (who is a lawyer) went to pick up the car, the salesman was great but then the finance guy started arguing that they could not sell the car that cheaply and then tried to force them to purchase additional upgrades. My brother had to threaten legal action before they backed down and closed the deal as negotiated.

#2 Called a local Boston dealer and spoke with the internet manager. Explained that I have owned two Subarus, I just helped my mother purchase in Denver her second Subaru, and now I was helping my mother in law purchase her first Subaru. We negotiated everything over the phone and set a date to pick up the car. When we got to the dealer I asked for the internet manager but a salesman told me they only get them leads and he would take care of us from here on in. I said fine but we had a bank check, no trade-in, and all we needed to do was pay for and take the car that should already be prepped. He tried to sell us more stuff and when I said no thank you his response was "But, I am not even making any money on this car". To which I replied, "well, you have not done any work and you are wasting our time so why should you". I then asked for the manager and told them that if we did not have the car ready in 30 minutes or less we were going to the other dealer closer to Boston where I have my Subaru serviced and we will purchase my mother-in-law's car there. Amazingly, they told us to go have lunch and the car will be ready when we are back. So, my take away was that they planned to sell us a bunch of extras that they would need to install and we would have had to come back another day to get the car.

#3 Called a NJ dealer near my father's NJ home to negotiate a new Audi purchase and set a date for him to pick up the car. When my father arrived, he had no trade-in as was planned, the salesperson spent about 2 hours with him going over the car, and then my dad just drove off. No high pressure sales tactics.

I shared these three stories because helping several family members over the years purchase cars in all parts of the country and using my own experiences, I have found that the more expensive the car (Mercedes, Porsche, Audi, Lexus, Cadillac, etc.) they often do not use high pressure sales tactics because they are making a good profit on the car and they want a long term relationship. With less expensive cars (Honda, Toyota, Subaru, Chevy, etc.) they are commodities so they do not care about long term relationships (as the salespeople will be gone by the time you return for a new car) and it is all about making the sale and getting a commission on as much as they can squeeze out of you.

And, having been a "runner" at a high end dealership during college, I learned many of the games they try to pull on "unprepared" customers. The #1 thing you can do as a customer is be ready to walk out when you do not get what you want because once you stay past 60 minutes in the dealership, they have worn you down and you will pay anything to get the car and be done rather than live through the experience again.

Unfortunately one of the best ways to purchase a car - all cash (no finance) - is just not available to most consumers. You will always get the best deal and sometimes you find it better to actually finance at 0%, 0.9%, 1.9%, etc. and just keep the money in the bank/CDs/Investments and pay off the loan over time.


I also find it interesting that the one company who made decent low priced cars and had a no haggle sales policy, Saturn, is no longer in business...Why is that?

[sitzmark]

Like Tickdoc says- just be ready.
1.) Know what you want to pay.
2.) Know what you want to buy- Options, etc..
3.) Know what the best financing you can get, or have financing secure ahead of time.
4.) In a best case scenario- Don't trade in. Makes for too much grey area- Sell ahead of new purchase.
5.) Stick to your guns and be willing to walk if all is not kosher.

The last new car I bought was in 2014. I shopped over the internet and found my car at my price.
I then called the local dealer and said "can you get this exact car at this price?"- "If yes, I get the car from you". "If no, I drive to the dealer who has it and buy from them".
They got me the car and we did the deal.
I wrote them a check so there were no finance or trade games.

John's got it. AND keep emotions in check ... it's just a vehicle. Or maybe it isn't and in that case let your desire (and finances) dictate what it means to you.

I've seen the auto industry from many sides. My step father was on the manufacturer side of establishing dealerships, allocating vehicles and setting dealership quotas. I started work at 14yo after school and on weekends in a dealership owned by the son of a past GM president. Had many roles - cleanup, showroom detailing, parts stocking, mechanic assistant, parts counter, and asst. service writer at the time I left. Also observed many sales training sessions. It's a tough gig for sales guys - no sell no eat. Not an excuse for unethical dealings, but the pressure is ALWAYS on. Graduated high school early and worked in another dealership as New Car Delivery mgr. until college. In college I worked summers in auto assembly plants - filling assembly line spots for vacationing workers. Finally I've purchased vehicles from dealerships with and without "employee pricing" incentives. Even with employee vehicle pricing there was always a constant negotiation at the dealer level for ancillary "stuff" - trade values, prep fees, license running, etc.

The auto business has always been a challenge to build customer loyalty, retain a livable margin, and manage manufacturer/dealer partnerships for the "right" inventory and incentives for all to make a profit. MAJOR overhead and commitment. A tough tough business.

It is a fascinating industry. Big part of US history and the economy.

[NYCfixie]

I buy all [very] used cars for myself , but we wanted a new van a few years ago so we decided to buy a Honda for the family car.

This time I used USAA’s car buying service. I found the exact van I wanted online with the exact options I wanted (none!!) and gave USAA the VIN and they negotiated the final price on my behalf. This is what they do so I assume they are decent at it and can use a little more leverage than a single consumer. I financed the van through USAA also; so that was painless

I don’t know if I got the absolute lowest price but the zero hassle on my part was worth it. I would do it that was again if I ever need a new car.

Having access to USAA myself, they are usually within $500-$750 of what you can negotiate on your own which is great and gets rid of so much hassle as you state. USAA basically gets you the car at invoice which still leaves some margin for the dealer so it is an easy sale for them and less hassle for you.

I still do not know why dealerships choose to use an adversarial model to sell cars in the 21st century.




...Salesmen from large national chains are well trained in how to maximize the profit of every sale. Like you guys, I hate their tactics. Will go out of my way to deal with a small one dealership family business...

Another good option as most of these small - one manufacturer - dealerships are looking to build long term relationships and have you refer friends/family.

[sitzmark]

Another good option as most of these small - one manufacturer - dealerships are looking to build long term relationships and have you refer friends/family.

Smaller dealerships are always on the cusp of having their dealership pulled if they can't move vehicles. Many (if not most) family-owned dealerships are struggling to keep up with mega-stores. They may be less aggressive, but they also have to cover overhead on fewer sales and often need more profit per vehicle to keep the doors open. Just a fact that most consumers make their decision based on price ... which usually steers them to high volume, low margin, high pressure.

[NYCfixie]

Smaller dealerships are always on the cusp of having their dealership pulled if they can't move vehicles. Many (if not most) family-owned dealerships are struggling to keep up with mega-stores. They may be less aggressive, but they also have to cover overhead on fewer sales and often need more profit per vehicle to keep the doors open. Just a fact that most consumers make their decision based on price ... which usually steers them to high volume, low margin, high pressure.

The smaller dealerships still make as much money on service as do the big dealerships which is why they want the relationship. They may not make money on the car but they can and do make much more money on the service. Also, family dealership often (but not always) have lower overheard costs than the bigger dealerships.

That is the issue with the bigger dealerships, they need to make money on both the car - so they can pay sales staff - and the service so they can keep the shop open. I also have found that smaller/family dealerships tend to have - more honest - service centers.

[mtb_frk]

Ive been held hostage before as well after arguing with the sales guy and the fleet guy etc about the capabilities of their new truck that i clearly knew more about. I walked away angry, and will never go back to that dealership.

The best thing I did when I ended up buying my new truck was beating up the finance guy on the extended warranty. There are stealerships out there sell the warranty at cost or slightly over online. I walked in with my printed out quotes, asked what the best they could do was, then laid it out for them that i could go online and save 2k and here are the prices. Finance guy re-calculates the numbers and comes out about $100 more than online price. He tells me it is more important to them make the sale than not make sale if there was no profit on it. I felt a little bad about it but, it was a lot of money.

I used my supplier discount and think I could have probably got a better price than just negotiating it but it was a lot easier.

[fmradio516]

Where do these "online prices" come from?

[sitzmark]

The smaller dealerships still make as much money on service as do the big dealerships which is why they want the relationship. They may not make money on the car but they can and do make much more money on the service. Also, family dealership often (but not always) have lower overheard costs than the bigger dealerships.

Dealers do get compensation from manufacturers during warranty period. That is also tracked closely by manufacturers since dealerships were using excessive warranty service claims to bill-back for added revenue. After-warranty service is a mixed bag whether customer stays with dealership or goes independent.

US automakers severely trimmed the number of family-owned dealerships during the 2007-on crash. They continue to dwindle. My wife and I work with a family owned dealer for purchase and service. (They aren't above pulling dealer "schtick" some times.) Given my step father's job I used to know many dealership owners. I still know a few around the country. Some have sold out. Some closed up. Some have gone mega dealer. And a very few are what you would expect a small family business to be. But it's tough.

[54ny77]

find a good car broker. best process ever. it's like ordering at a greek diner--big menu! let 'em know what you want, he comes back with the price, and presto. that includes new cars by the way. i've bought a car using the service, and a buddy buys his fleet vehicles that way (which is often how brokers get better pricing, since they can work with fleet sales). never have to set foot in a dealership. instead, car (or truck) can get delivered or just take a cab/uber to the broker's place and pick it up, chat it up & have a cuppa joe, drive home.

last car i bought was via majority of time over the internet (email), with a phone call or two but only to confirm a couple things and put credit card payment on whatever it was (deposit i think). that was also a piece of cake, at a chevy dealer no less.

all these crazy stories of being held hostage, don't understand it. just get up and walk. car is a total commodity, you can always order it elsewhere and have a courtesy delivery to dealer of choice for a nominal fee.

[ftf]

I've always gotten a good deal on every car I've bought, but it takes time and effort to get a really good deal. Yes you can get decent deals using things like truecar, but even then you aren't getting the best deal you can. Like everything this has opportunity cost. Also the dealer obviously ALWAYS has the upperhand, they won't sell a car unless they make money, no matter how much you know, they know more, as it's their business, that they do all day everyday.

[ftf]

I still do not know why dealerships choose to use an adversarial model to sell cars in the 21st century.





Because it allows them to utterly screw some people, and make good money off everyone else. You are correct if a different model advantaged them, that's what they would do.

[William]

Because it allows them to utterly screw some people, and make good money off everyone else. You are correct if a different model advantaged them, that's what they would do.

I know a guy who loves the game with car sales people. He has no qualms about hanging around the dealership all day long putting the screws to them, feigning walking out, making them wait for answers, etc...trying to work out the best deal possible. The last time he did this he finally got to where he wanted to be price wise, hemmed and hawed a little bit, got them to think he was about to go for it, and then said he wanted a Toyota jacket they had on display. He got the jacket too.

He's a nice guy, but not one you would want mad at you...:eek:








W.

[Clean39T]

find a good car broker. best process ever. it's like ordering at a greek diner--big menu! let 'em know what you want, he comes back with the price, and presto. that includes new cars by the way. i've bought a car using the service, and a buddy buys his fleet vehicles that way (which is often how brokers get better pricing, since they can work with fleet sales). never have to set foot in a dealership. instead, car (or truck) can get delivered or just take a cab/uber to the broker's place and pick it up, chat it up & have a cuppa joe, drive home.

last car i bought was via majority of time over the internet (email), with a phone call or two but only to confirm a couple things and put credit card payment on whatever it was (deposit i think). that was also a piece of cake, at a chevy dealer no less.

all these crazy stories of being held hostage, don't understand it. just get up and walk. car is a total commodity, you can always order it elsewhere and have a courtesy delivery to dealer of choice for a nominal fee.But how do you find a good broker?

I'm reasonably happy with the offer a dealer is showing me for a 2019 Prius Prime Advanced. $2k off, plus I get ~$6k back in tax credits. It's the only one in the color we want in our region.

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[54ny77]

that can be a little tough, but the biz has gotten more sophisticated and especially web-based in the ~20 years since i first used one. word of mouth often best, of course.

you're in portland? here's one: https://vehiclelocatingservice.com/

no idea if good or not, but just google auto "broker portland" and a bunch pop up.


But how do you find a good broker?

I'm reasonably happy with the offer a dealer is showing me for a 2019 Prius Prime Advanced. $2k off, plus I get ~$6k back in tax credits. It's the only one in the color we want in our region.

Sent from my Pixel 2 XL using Tapatalk

[Irishgirl]

Why can’t buying a car be like buying a bike? [emoji12]





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[rePhil]

My wife wanted a Mustang Convertible and often drove through the Dealers lot on her way home to see if one caught her eye. One day one did

Sales guy 1 cornered her and quoted her the sticker claiming it was the best he could do.

Sales guy 2 The internet sales mgr's price was almost 2k less.

Sales guy 3 We went back to the dealer sales guy 1 spotted her and almost ran over.
When asked why the internet price was so much less he brought in the sales mgr who was none to pleased with any of us. He about flipped when I asked for the X plan price.

[HenryA]

Worth a listen if only for the fact that one gets to hear the behind the scenes activity in a NY car (JEEP) dealer.

https://www.thisamericanlife.org/513/129-cars

If you skipped the early reccomendation, be sure to listen to this. You will understand a lot more about the car business and car buying when you’re done. And its hilarious!

[Peter P.]

I am casually in the market for a new car. Negotiating with car dealers, or hagglers of any kind, is not my forte.

I'd love to "practice" the car buying process but I'd hate wasting the dealer's time knowing I have no intention to buy.

So my question is; there must be a source of info on how to price a new car, which added costs are negotiable and which are fixed, and how to get the deal you want or close to it.

Is Consumer Reports a source? Any others? Is there an on-line way I could play with buying a car and get an idea of the various costs as mentioned above, and go all the way to pulling the trigger without actually doing so?

[yngpunk]

I am casually in the market for a new car. Negotiating with car dealers, or hagglers of any kind, is not my forte.

I'd love to "practice" the car buying process but I'd hate wasting the dealer's time knowing I have no intention to buy.

So my question is; there must be a source of info on how to price a new car, which added costs are negotiable and which are fixed, and how to get the deal you want or close to it.

Is Consumer Reports a source? Any others? Is there an on-line way I could play with buying a car and get an idea of the various costs as mentioned above, and go all the way to pulling the trigger without actually doing so?

First, never think of it as wasting a dealer's time. It's not like they are working every minute they are on the showroom floor. Wrong attitude to start negotiations.

As to what is negotiable, everything is negotiable, although the final price may end up being the same. Dealer will tell you that documentation fee isn't negotiable, but what they don't tell you is that they always charge the maximum allowable by the state. If they discount that, they just won't discount something else.

As for pricing new cars, email the internet sales person and ask for the "out the door" price and a breakdown of that price. Do that for several dealers that carry the type of car you are interested, which should start to give you an idea of who's overcharging or playing games with various fees and whatnots.

Another thing to watch out for...destination charge...this is already included in the sticker price, but some dealerships like to tack it on a 2nd time as a line item. They'll give you $X off of sticker, but then tack on the destination charge back on.

Good luck

[Dave]

The destination charge is a legitimate part of a new car's cost. The additional fee that most dealers now charge, that's most often not negotiable is a dealer prep fee that may range from $200-400. At my local Chevy dealer it's around $400 and printed into the sales form, so it won't be removed.

I used to be able to go to Edmunds.com and get the dealer's cost on any new vehicle, but not now. Even dealer's cost does not take into account the 3% holdback that every dealer gets from the factory, after the car is sold. If you'e buying a car that's a last year's leftover there may be large factory incentives for the dealer that buyers will never know about.

I ordered a new Chevy truck last year and found the process changed from previous years. The dealer offered to sell me the truck at a price that was about 3.5% below MSRP and apply any GM discounts in effect at the time the truck was delivered. The GM discounts can be quite large. When I bought another new Chevy, just a few months earlier, I got $3,000 off the sticker because I was a Corvette owner and I also cashed in a $3,000 GM credit card rebate. When my truck arrived, there was a $1500 discount in effect, that reduced the final price.

I tried to sell my Corvette before my truck arrived, but no one would offer more than the trade-in price, so I traded it in and saved $1500 on sales tax. I ended up with a new truck and $2000 back, in cash.

If you're trading in, Edmunds still seems to have accurate trade-in values that are about the same as the NADA book value that the car dealer will use. With that info, there shouldn't be too much debate on trade-in value.

It's trickier if you're trading in a used car on another used car, but that's where websites like edmunds.com can still provide info on what each car is worth for trade-in and retail sale.

[Mikej]

I go to the forum of the model I want to buy, then I find the “Prices paid” thread and go from there. I will then find the vehicle at a dealer online and click the best price or whatever icon. I’ll then shop that email to other dealers and get it all the way down. I then bring in my total a-hole self to lowest price dealership and commence to bring down those clowns for anything possible, mud flaps, cargo mat, all weather mat, oil changes anything to mess there bottom line and confuse them to the point they just can’t take me anymore- and never ever give those guys your keys - ever!! They are generally poor at math in the head so know what your total price and finance cost etc is and don’t let them forget your down payment or anything- don’t let them turn it into a monthly payment either- always total cost. I once skateboarded to a dealership-and never pay delivery- just walk, they’ll be calling in 10 minutes-

[Elefantino]

This thread brings back memories of this column by Dave Barry. (https://www.washingtonpost.com/archive/lifestyle/1988/02/07/stalking-the-wild-car-price/2c224346-9ac4-4853-acbb-3f9de3e5f883/?utm_term=.91b675c6841f)

I was an editor at a newspaper in California at the time and after this Barry column ran every car dealer in the county canceled their ad contracts. Every single one. (It was because of one particular sentence in the column; read it and you'll see.)

Showing great courage, the publisher responded by … no, I'm kidding. He showed no courage. Instead, he ran an above-the-flag (newspeak for over the nameplate on the front page) apology with his personal signature. The dealers responded by renewing their contracts.

I believe the publisher later went into politics.

[Ken Robb]

COSTCO, USAA, AAA, and other groups offer members pre-negotiated prices that are usually quite good and the process is easy.

[echappist]

COSTCO, USAA, AAA, and other groups offer members pre-negotiated prices that are usually quite good and the process is easy.

there was some kerfuffle surrounding the Costco one, how it wasn't as good as touted

anyone remember what that was about?

[HenryA]

This thread brings back memories of this column by Dave Barry. (https://www.washingtonpost.com/archive/lifestyle/1988/02/07/stalking-the-wild-car-price/2c224346-9ac4-4853-acbb-3f9de3e5f883/?utm_term=.91b675c6841f)

I was an editor at a newspaper in California at the time and after this Barry column ran every car dealer in the county canceled their ad contracts. Every single one. (It was because of one particular sentence in the column; read it and you'll see.)

Showing great courage, the publisher responded by … no, I'm kidding. He showed no courage. Instead, he ran an above-the-flag (newspeak for over the nameplate on the front page) apology with his personal signature. The dealers responded by renewing their contracts.

I believe the publisher later went into politics.

Ohh Mr. E,
That is a great story and a great link to Dave Barry.

Over the years, I have had pretty good success buying cars. Generally I start my plan with the intention of leaving the dealership and its staff bleeding from the ears when I leave. Sometimes that has panned out, some times not. But generally they were glad when I was gone.

If you shop local, you will get the usual treatment written about in this thread. So be prepared to go to more than one dealership and be ruthless about your dealings with each one. Walk in, ask to see what you want (you already knew they had one from the internet ad), and ask the price. When they come back, give them your price and tell them to call you. Then head to the door. Rinse and repeat as needed. Be the consumer counterpart to the car salesman in Barry’s story.

The advantage to buying out of town though is the out of town dealer looks at you as a gift. A customer who dropped in from outer space. Find your car, know your price and email them. Tell them you’re ready to come buy it. Do be truthful in your representation that you will buy at your price.

We’ve bought the last two Subarus for my wife this way. Made the deal, drove about 250 miles round trip to another state, dropped in, started the paper work and went to lunch. Came back, drove off in the car. Super easy.

Know up front that whatever the incentives, hold backs and spiffs that might be in effect at the time are there for the dealer to have some room to sell you a car. They will make something from your purchase, even if its sold at their cost. They likely won’t sell you a car if they lose money overall. Overall is a big place and you don’t know what’s in that.

So pick your price, (which must fit within the general realm of some profit somewhere) and have at it. The car dealers are not there for a hobby and they must get some benefit from the sale they make to you and every other customer. If this is too unseemly, maybe try a broker to do the dirty work. But know that when you go that route there is another mouth to feed added into the deal.

[54ny77]

not sure if it was mentioned here in this thread but month-end is a great time to get a new car because of sales targets. best time of all is month-end during early fall, esp. if the dealer has what you're looking for on the lot (even if it's a little bit of compromising on features). reason is the next year models are en route (by september, usually), and they have to get rid of prior generation so as to ensure future allocation. that's how i bought my last new car. got it for a meaningful amount off of msrp, on what was a pretty desirable car at the time. lucked out, basically. and no hassles--all email and a couple of phone calls. flew a couple hours to get it, enjoyed a nice drive home.

[buddybikes]

Run down payment, if needed with VISA so if they attempt to stiff you - you have an easy recourse.

[54ny77]

Yep. That's exactly what I did also. I paid a little extra on doing that (the card swipe fee), but it was only a few hundred bucks and totally worth it so as to lock things in.

Run down payment, if needed with VISA so if they attempt to stiff you - you have an easy recourse.

[Irishgirl]

Bought a new car at the end of last year and did the same thing with the VISA down payment for two reasons...for the miles/points and because the dealership miss marked the car (had insider intel) and this made them contractually obligated...and with no trade in they couldn’t try to get creative on trying to make up the difference.

This was the first time I ever bought a car on my own - and as a female that had its own set if ill treatment.


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[echappist]

Run down payment, if needed with VISA so if they attempt to stiff you - you have an easy recourse.

and what recourse would that be, if they pull the "I just sold that car" trick?

[OtayBW]

The advantage to buying out of town though is the out of town dealer looks at you as a gift. A customer who dropped in from outer space. Find your car, know your price and email them. Tell them you’re ready to come buy it. Do be truthful in your representation that you will buy at your price. That seems counterintuitive because there is a lot of incentive for a local dealer to secure your business through the promise of lucrative service work over time. The out of town dealer, not so much.

[C40_guy]

I've bought a couple of cars from dealers, one via tourist delivery, two as dealer demos, and a couple of used cars.

I also helped friends to buy a new Acura MDX. I think we moved from a $45K asking price to $37K in the first five minutes, when I mentioned the invoice price and the additional $3500 in trunk money (year end manufacturer rebate to the dealer) the dealer was going to receive on the sale. Friends were pretty pleased. :)

For the most part, though, I like to buy cars after the depreciation curve starts to level out. That tends to be at about 5-8 years, 100K miles on german cars...

Sure, it costs me a bit more to maintain these older cars, but overall cost of ownership is a lot lower!

[echappist]

That seems counterintuitive because there is a lot of incentive for a local dealer to secure your business through the promise of lucrative service work over time. The out of town dealer, not so much.

not to mention that many buyers will be trapped in by the sunk-cost fallacy of "i've already driven this far, need to get something out of it"

frankly, i'm surprised at all of the out-of-town deals that go right, knowing all the decision making that could go wrong for the buyer

[HenryA]

That seems counterintuitive because there is a lot of incentive for a local dealer to secure your business through the promise of lucrative service work over time. The out of town dealer, not so much.

Looked at that way it does seem counterintuitive, but mostly its about getting one more car out the door. While every dealership has its own sophisticated business plan, the sales guys have their own plan - get another car out the door. When an out of towner shows up its a gift from heaven. A buyer who was unknown until that magic moment. The sales guys don’t care even a little bit about ever seeing you again (except when you are ready to buy another one). But they don’t think that far out. They think to the end of the month and pay day. Getting cars out the door is what makes it work.

[HenryA]

not to mention that many buyers will be trapped in by the sunk-cost fallacy of "i've already driven this far, need to get something out of it"

frankly, i'm surprised at all of the out-of-town deals that go right, knowing all the decision making that could go wrong for the buyer

If you’re that person it might be best to go the broker route. But the plan is to nail the deal down in writing by email before you go, leaving the only decision to be where to have lunch while they finish the paperwork. It can be easier than driving across town to a dealership. And you don’t have to be in their presence any longer than necessary. But this way of buying can work in town as well. I’ve just found that there is a little magic in distance.

Another factor at work is the dealership/salesperson figures you’re not another “be back” but rather an actual buyer. That counts for a lot in their minds.

[HenryA]

Bought a new car at the end of last year and did the same thing with the VISA down payment for two reasons...for the miles/points and because the dealership miss marked the car (had insider intel) and this made them contractually obligated...and with no trade in they couldn’t try to get creative on trying to make up the difference.

This was the first time I ever bought a car on my own - and as a female that had its own set if ill treatment.


Sent from my iPhone using Tapatalk

Last car my wife bought, she went to the downtown Subie dealer to look. She had a settlement check in her hand to buy - her old one was totaled. I told her not to bother but she wanted a new car asap. The salesman showed her a few cars and told her to bring her husband back to help her pick one. You can imagine how that went over. :butt: We ended up going out of town again. Paid about $3000 less than either local dealer.

[retrofit]

Why can’t buying a car be like buying a bike? [emoji12]
Sent from my iPhone using Tapatalk

Please no car PSA threads!
:D

[stien]

But how do you find a good broker?

I'm reasonably happy with the offer a dealer is showing me for a 2019 Prius Prime Advanced. $2k off, plus I get ~$6k back in tax credits. It's the only one in the color we want in our region.

Sent from my Pixel 2 XL using Tapatalk

I'm seeing over $4k off prius prime models on top of rebates in recent emails from Toyota.

I've read several articles from a guy on Jalopnik who is a "car finder", I think his fee is $500. Tom McParland?

Edit: Those deals might have been the 2018s.

[ftf]

I'm seeing over $4k off prius prime models on top of rebates in recent emails from Toyota.

I've read several articles from a guy on Jalopnik who is a "car finder", I think his fee is $500. Tom McParland?

Edit: Those deals might have been the 2018s.

https://slickdeals.net/f/12444160-toyota-prius-prime-28500-up-to-5000-off-manufacturer-rebate-upto-3000-off-dealer-discount-4500-federal-tax-credits-16000-plus-tax-and-doc-fees?src=SiteSearchV2_SearchBarV2Algo1


Yeah the prius prime is not a big seller, they can be had for cheap, especially for last years model.

[Peter P.]

This thread brings back memories of this column by Dave Barry. (https://www.washingtonpost.com/archive/lifestyle/1988/02/07/stalking-the-wild-car-price/2c224346-9ac4-4853-acbb-3f9de3e5f883/?utm_term=.91b675c6841f)

Can't read the column; it's behind a paywall.

P.S. Is this a valid strategy-I want to buy local and have it serviced locally. But if I go to the local dealer FIRST, and eventually walk away, I'm then forced to shop dealers farther away. Why not shop dealers FARTHER away from home, getting familiar with the process and the games, and END at the local dealer, wiser and better aware of the finished price?

Another question-is it more difficult to negotiate a car ordered to spec vs. buying something on the lot? I can't stand paying for features I don't want/need, and I'm inclined to think the manufacturers build cars with accessories/more profit built in. And I would fear the dealer's bait and switch where they try to dissuade me from ordering by trying to up-sell me something on the lot.

[Elefantino]

STALKING THE WILD CAR PRICE

By Dave Barry
February 7, 1988

We are attempting to purchase a new car, and I have just one teensy little question: WHY WON'T THEY TELL YOU HOW MUCH IT COSTS?

I mean, let's say you're in the market for a rutabaga. You go to the supermarket and there, plain as day, is a sign stating the price of the rutabaga, allowing you to decide instantly whether it is in your price range. If it is, you simply pay the amount and take your rutabaga home, and you hurl it into your garbage disposal. At least that's what I would do, because I hate rutabagas.

But when you walk into a car dealership, you are entering Consumer Hell. There is no easy way to find out what the actual true price of any given car is. Oh, sure, there is a "sticker price," but only a very naive, fungal creature just arrived from a distant galaxy would dream of paying this. In fact, federal law now requires that the following statement appear directly under the sticker price:

"WARNING TO STUPID PEOPLE: DO NOT PAY THIS AMOUNT."

The only way to find out the REAL price is to undergo a fraternity-style initiation. First you squint at the sticker, which lists the car's 163 special features, none of which you could ever locate on the actual car because they all sound like rocket parts, as in "tranverse-mounted induced-torque modality propounders." Then a salesperson comes sidling toward you in an extremely casual fashion (do not attempt to escape, however; an experienced car salesperson can sidle great distances at upwards of 45 mph) and chatters on at length about the many extreme advantages of whatever car you are looking at ("it has your obverse-shafted genuine calfskin bivalve exuders"). But if you ask him the true price, he will make some vague, Confucius-type statement like: "Dave, we are definitely willing to go the extra mile to put a smile on your face."

"But how much does it COST?" you say.

"Dave," he says, lowering his voice to indicate that you and he have become close personal friends. "Frankly, Dave, {name of whatever month it is} has been a slow month, and I think, Dave, that if we sit down and cut bait, we can come up with a number that we can play ball with."

"WHAT number?" you say. "TELL ME THE NUMBER."

"Dave," he says, "I think if we both pull on our oars here, we can put the icing on the cake while the iron is still hot."

The easiest solution, of course, is to simply pull out a loaded revolver and say, "Tell me how much this car costs or I will kill you," but unfortunately it is still a misdemeanor in some states to shoot a car salesperson. So eventually you have to start GUESSING at the price ("Is it more than $9,500?"). It is very similar to the childhood game 20 Questions, only it takes much longer, because instead of saying "yes" or "no," the salesperson always answers: "Let me talk to my manager."

The manager is comparable to the Wizard of Oz, an omnipotent being who stays behind the curtain and pulls the levers and decides whether or not the Cowardly Lion will get a free sunroof. I have never heard a conversation between a manager and a salesperson, but I assume it goes like this:

SALESPERSON: He wants to know if it's more than $9,500. Can I tell him?

MANAGER: How many times have you called him "Dave"?

SALESPERSON: 1,672 times.

MANAGER: Not yet.

So it can take hours to determine the true price, and this is just for ONE car. If you want to find out the price of another brand of car, you have to go through the entire fraternity initiation all over again. And there are hundreds of brands of cars out there. THOUSANDS of them. Back when I was a child and Abraham Lincoln was the president, there were only about four kinds of cars, all of them manufactured by General Motors, but now you see new dealerships springing up on a daily basis, selling cars you never heard of, cars whose names sound like the noise that karate experts make just before they break slabs of concrete with their foreheads ("Hyundai!!").

So far, the cars we have looked at include: the Mimosa Uhuru 2000-LXJ, the Mikado Sabrina Mark XVIXMLCM and the Ford Peligroso, which is actually the same as the Chevrolet Sombrero, the Jeep Violent Savage and the Chrysler Towne Centre Coupe de Grace, and which is manufactured partly in Asia (engine, transmission, body) and partly in the United States (ashtray). They are all fine cars, but at the present time, based on our discussions with the various salespersons, we find ourselves leaning toward the rutabaga.

[AngryScientist]

STALKING THE WILD CAR PRICE

By Dave Barry
February 7, 1988


that article is spot on. it's amazing that it was written in 1988 and the same basic routine exists today for most people. what a joke.

i would love to see some car MFG's go to a Canyon model and sell direct to consumer over the internet. at leas then there is justification for the "destination" charge when they flatbed it to your driveway.

[Clean39T]

I'm seeing over $4k off prius prime models on top of rebates in recent emails from Toyota.

I've read several articles from a guy on Jalopnik who is a "car finder", I think his fee is $500. Tom McParland?

Edit: Those deals might have been the 2018s.I didn't buy it. Rethinking our needs...

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[ftf]

I didn't buy it. Rethinking our needs...

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Honda Clarity's are being blown out right now too.....

[makoti]

Looked at that way it does seem counterintuitive, but mostly its about getting one more car out the door. While every dealership has its own sophisticated business plan, the sales guys have their own plan - get another car out the door. When an out of towner shows up its a gift from heaven. A buyer who was unknown until that magic moment. The sales guys don’t care even a little bit about ever seeing you again (except when you are ready to buy another one). But they don’t think that far out. They think to the end of the month and pay day. Getting cars out the door is what makes it work.

This. They do not care about you coming back for service. That's someone else's problem. Numbers. Cars sold. That's it.

[stien]

I didn't buy it. Rethinking our needs...

Sent from my Pixel 2 XL using Tapatalk

If you start a thread we can groupthink!

[NYCfixie]

...Another question-is it more difficult to negotiate a car ordered to spec vs. buying something on the lot? I can't stand paying for features I don't want/need, and I'm inclined to think the manufacturers build cars with accessories/more profit built in. And I would fear the dealer's bait and switch where they try to dissuade me from ordering by trying to up-sell me something on the lot.


Ask them to tell you what is on their "incoming sheet", "allocation", or what may still be "at the port". They will have VIN numbers for these cars so do not let them tell you otherwise and this means you can get insurance for the car immediately.

While they would like to sell something on the lot because of carrying costs, it is less expensive for them to have "dealer installed" options done at the port before the dealership takes delivery of the car. Once the dealer takes delivery, any installed options they must cover the install fee which means they just pass the cost on to you. And, since you are buying something that has not even been on the lot yet, they make a little more money because they never have "floor space" costs for that car. Salespeople may not care but sales managers do and at the end of the day, it is still a sale.

I am never in a rush so I never buy a car on the lot or one that they need to source from another dealer's lot. I purchase cars already allocated to them but have the opportunity to chose whatever dealer installed options I want at a much lower price.

[sitzmark]

that article is spot on. it's amazing that it was written in 1988 and the same basic routine exists today for most people. what a joke.

i would love to see some car MFG's go to a Canyon model and sell direct to consumer over the internet. at leas then there is justification for the "destination" charge when they flatbed it to your driveway.

The Barry article struck me as humorous. Why would he not consider the window sticker as "the price of the car" when he walks into a grocery store and accepts the sign on the shelf as the true price? One is not any different than the other - just less digits. Per item, but not in the aggregate. Most americans spend a greater share of annual income on food than car payments. Why would he not haggle with the grocer, the restaurateur, the butcher, the baker, the ? ...farmer's market and haggle away. :)

Pretty much every vehicle arrives at a dealer/delivery location by train/truck/ship - someone in the chain pays for that. Every vehicle goes through 2-3 hours of prep for adjustments, tune, alignment, wash, interior detail, wax, buff. - shop staff needs to be paid. There are legitimate expenses to be recovered in addition to cost of money and overhead. The less margin in the deal the less chance for negotiating these types of expense.

Tesla = Canyon. Others are flirting with the model.

[Hawker]

This thread brings back memories of this column by Dave Barry. (https://www.washingtonpost.com/archive/lifestyle/1988/02/07/stalking-the-wild-car-price/2c224346-9ac4-4853-acbb-3f9de3e5f883/?utm_term=.91b675c6841f)

I was an editor at a newspaper in California at the time and after this Barry column ran every car dealer in the county canceled their ad contracts. Every single one. (It was because of one particular sentence in the column; read it and you'll see.)

Showing great courage, the publisher responded by … no, I'm kidding. He showed no courage. Instead, he ran an above-the-flag (newspeak for over the nameplate on the front page) apology with his personal signature. The dealers responded by renewing their contracts.

I believe the publisher later went into politics.

HA! Great article and it still applies. And yes, I found the sentence. No doubt that would NOT fly today.

[AngryScientist]

Why would he not consider the window sticker as "the price of the car" when he walks into a grocery store and accepts the sign on the shelf as the true price? One is not any different than the other - just less digits.


Why would he not haggle with the grocer, the restaurateur, the butcher, the baker, the ? ...farmer's market and haggle away. :)
.

lol. did you miss the point that actually made the article funny?

yes, yes you did.

[jemoryl]

I'm sure some parts are outdated, but there is an old book about the tricks dealers use, Remar Sutton's Don't Get Taken Every Time, which is a great read. It seems that some of the old tactics are still in use (e.g. going to talk to the boss about a deal, when the salesman is really going outback for a cigarette...).

[bfd]

[/QUOTE]Tesla = Canyon. Others are flirting with the model.[/QUOTE]

My experience is just the opposite. Last week I walked up to the local dealer to see the Model 3. Initially, I worked with a young woman and she answered a bunch of questions, which was really helpful. Then this sales guy took over and started showing me the app and how he could find his car parked on the street.

After that it was all numbers and the upsell was on! You want the premium plus package?! Yes, why? Since you keep your cars for a long time, I told him I had a 1990 BMW, he's like get the big battery! LOL, he then started showing the price of the "inventoried" cars and how I will save 3% if I take delivery of a car in stock before April 1 or within the next 3 days! In other word, he was showing me a Model 3 with the long range battery that will get 325miles instead of 240miles, it would "only" cost $43,000 instead of $44,000-something or a savings of around $1500 or so. The premium plus version would be about $37,000 as they don't have it in inventory and it will need to be build.

Further, he used the "Help Tesla" card telling me it would really help the company if I bought now.

Moreover, financing! Yes, I should finance now as the rate is only 3.75% instead of 4.25% after 4/1! Or more power to you if you can pay cash....which reminded me of Sollozzo's quote in the Godfather ( If you consider a million dollars in cash just finance, te salute, Don Corleone)

Furthermore, and here's my favorite - I need to consider getting....wait for it....SOLAR! Haha, He then started pulling numbers out of the air - if I use $100 of electricity a month, I could save like $20,000 over the next 20 years or something like that by buying a Tesla solar system at $12,000, which is really only $8,000 since I get $4,000 federal credit and why pay Uncle Sam?! (He should have used Trump's name...)

I walked out impressed as it has been a long time since I was in a dealership. I couldn't sit in a car as the two Model 3 on display had people in them. So I sat in this beautiful blue Model X with white interior.... very nice! I kind of like the gull wing doors!

But that is not all! I thought about it and if I want to get the federal tax credit of like $3700, I need to take deliver of a Model 3 before June 1. So if they're selling inventoried cars for 3% off, why not get it now.

So I called back and started talking with the sales guy again and here's what transpired:

It was Saturday and I needed to take delivery of the car by Sunday (yesterday). Since I don't have $40k+ in my checking account, I needed a few days to liquidate some assets so I asked about financing. Here's the what transpired:

1. I asked about financing and wanted to see a copy of the finance agreement. I wanted to know if there was an early pay off fee and any other fee or charges. No deal, the finance documents were "digital" and they had no way of getting it.

2. So I asked about a pay off fee or any kind of finance charge. Here's where it gets fun, there was no early pay off fee. Good! BUT, there might be a finance charge. How much? Remember, the deal for taking a car was 3% off discount or like $1500 or so. Initially, the sales guy said it was like $690. I asked if he could get a solid price. He needed to talk to his manager...haha! He called me back and said any finance charge would be between $2000 and $10,000?! I'm like your "discount" is $1500, so why am I paying more?!

3. That's not all, he then made me a fantastic proposal - why don't you give us a check for the entire amount, an amount which to this day I have no idea is as he never gave me a final price after asking for it multiple times, and then when we go to cash the check on Monday it will bounce, since I told him I don't have $40K+ in my checking account....I'm like what?! You want me to bounce a check?! He said yeah, you will pay a bounce check fee of like $40 dollars, another made up number, and then have a day or two to put money into your account....I'm like NO! I'm not going to "bounce a check!"

4. So I made one last proposal - I will come in on Sunday and drop off a check for the entire amount, but date it for Wednesday, April 3rd. That will give me a few days to liquidate some assets and put money in my account. Initially, he really liked the idea but said he had to...ready, repeat after me....Go Back to his Manager!

His manager said NO! Tesla needs the cash NOW (playing the Tesla is broke again card) and they will scan in all checks that night! The manager asked "Why doesn't the guy just take advantage of our fantastic finance deal?!" I'm like I have the cash, why am I financing?! i just needed a few days since I didn't know about this "sale" until Friday? So we were done and I'm considering other options.....

I guess the only good news is I did most of this by phone or text, so I wasn't waiting at a stealership for 3+ hours....YMMV!

Good Luck!

[benb]

One of the things with the salespeople & managers pulling all these tricks is they are pretty much forced to, at least at the big dealerships.

Ernie Boch is a billionaire (I saw the mention of the automile), but most of his non-manager sales employees make < minimum wage unless they sell sell sell sell and make sure to take you to the cleaners while doing so.

They want to see you come in and they convince you to pay sticker, buy all those warranties & protection packages and whatever, then they need to undersell you on your trade so you're underwater, then bury you in a bad loan at a high interest rate. Then they try to sell you a car that the manufacturer has a "spiff" on that month, so Honda/Toyota/whatever sends the Saleguy a $500 bonus.

If you get a good deal on the car the salesperson makes almost nothing, because all the profits on the car are stacked to go up the chain to management/ownership.

One of the more bizarre aspects of this is salepeople definitely learn race/ethnicity/culture-based strategies to sell different people. Culturally different people fall for different tricks.

They grab young impressionable people just out of HS, etc.. and sell them that they're going to get rich selling cars. Then they work them to the bone and the only way they're making a liveable wage is if they pull every trick and sell a ton of cars every month. They've got all kinds of tricks like letting you take a date out in a nice dealer car that you can't afford if you hit a certain #. Then they go to town trying to sell the employees themselves that they need to buy a new car from the dealership every year or two to keep up appearances. Meanwhile managers get comp cars all the time and such.

Source: Family member who worked in car sales.

Best gig going is you've got someone who drives in with a $60,000 BMW that they couldn't afford but the BMW dealer got them a dumb loan. They've paid off $20k and owe $40k and the BMW is worth $30k. Throw them into a brand new Honda Accord or Toyota Camry at full sticker with the add ons so it's $35k, give the customer $20k for the trade and pay the BMW loan and roll it into the new one, get the customer to walk out with an Accord and a $55k loan for 8 years at 7%. The Salesguy gets to go to a steak house that night. Then the Dealership details the BMW and puts it on the lot for $35k. Yes, it happens.

[echappist]

So basically, Glengarry Glenross

[C40_guy]

[H]e then made me a fantastic proposal - why don't you give us a check for the entire amount[/QUOTE]

Sounds like Tesla was trying to jam in some additional deals before the end of the quarter.

If you give them a check for the full amount in March, even a bad check, they declare the car delivered and count another car sold. They would simply claim ignorance on the bad check situation and count the sale for Q1.

On the other hand, if you give them a postdated check, it's an April sale versus March, which wouldn't pass scrutiny if audited. (Sale document could not predate check).

Glad I dumped most of my TSLA. :)

[buddybikes]

We buy 1 car every 10 years, same as having a colonoscopy but get much poorer in the process.

[Red Tornado]

Tesla = Canyon. Others are flirting with the model.[/QUOTE]

My experience is just the opposite. Last week I walked up to the local dealer to see the Model 3. Initially, I worked with a young woman and she answered a bunch of questions, which was really helpful. Then this sales guy took over and started showing me the app and how he could find his car parked on the street.

After that it was all numbers and the upsell was on! You want the premium plus package?! Yes, why? Since you keep your cars for a long time, I told him I had a 1990 BMW, he's like get the big battery! LOL, he then started showing the price of the "inventoried" cars and how I will save 3% if I take delivery of a car in stock before April 1 or within the next 3 days! In other word, he was showing me a Model 3 with the long range battery that will get 325miles instead of 240miles, it would "only" cost $43,000 instead of $44,000-something or a savings of around $1500 or so. The premium plus version would be about $37,000 as they don't have it in inventory and it will need to be build.

Further, he used the "Help Tesla" card telling me it would really help the company if I bought now.

Moreover, financing! Yes, I should finance now as the rate is only 3.75% instead of 4.25% after 4/1! Or more power to you if you can pay cash....which reminded me of Sollozzo's quote in the Godfather ( If you consider a million dollars in cash just finance, te salute, Don Corleone)

Furthermore, and here's my favorite - I need to consider getting....wait for it....SOLAR! Haha, He then started pulling numbers out of the air - if I use $100 of electricity a month, I could save like $20,000 over the next 20 years or something like that by buying a Tesla solar system at $12,000, which is really only $8,000 since I get $4,000 federal credit and why pay Uncle Sam?! (He should have used Trump's name...)

I walked out impressed as it has been a long time since I was in a dealership. I couldn't sit in a car as the two Model 3 on display had people in them. So I sat in this beautiful blue Model X with white interior.... very nice! I kind of like the gull wing doors!

But that is not all! I thought about it and if I want to get the federal tax credit of like $3700, I need to take deliver of a Model 3 before June 1. So if they're selling inventoried cars for 3% off, why not get it now.

So I called back and started talking with the sales guy again and here's what transpired:

It was Saturday and I needed to take delivery of the car by Sunday (yesterday). Since I don't have $40k+ in my checking account, I needed a few days to liquidate some assets so I asked about financing. Here's the what transpired:

1. I asked about financing and wanted to see a copy of the finance agreement. I wanted to know if there was an early pay off fee and any other fee or charges. No deal, the finance documents were "digital" and they had no way of getting it.

2. So I asked about a pay off fee or any kind of finance charge. Here's where it gets fun, there was no early pay off fee. Good! BUT, there might be a finance charge. How much? Remember, the deal for taking a car was 3% off discount or like $1500 or so. Initially, the sales guy said it was like $690. I asked if he could get a solid price. He needed to talk to his manager...haha! He called me back and said any finance charge would be between $2000 and $10,000?! I'm like your "discount" is $1500, so why am I paying more?!

3. That's not all, he then made me a fantastic proposal - why don't you give us a check for the entire amount, an amount which to this day I have no idea is as he never gave me a final price after asking for it multiple times, and then when we go to cash the check on Monday it will bounce, since I told him I don't have $40K+ in my checking account....I'm like what?! You want me to bounce a check?! He said yeah, you will pay a bounce check fee of like $40 dollars, another made up number, and then have a day or two to put money into your account....I'm like NO! I'm not going to "bounce a check!"

4. So I made one last proposal - I will come in on Sunday and drop off a check for the entire amount, but date it for Wednesday, April 3rd. That will give me a few days to liquidate some assets and put money in my account. Initially, he really liked the idea but said he had to...ready, repeat after me....Go Back to his Manager!

His manager said NO! Tesla needs the cash NOW (playing the Tesla is broke again card) and they will scan in all checks that night! The manager asked "Why doesn't the guy just take advantage of our fantastic finance deal?!" I'm like I have the cash, why am I financing?! i just needed a few days since I didn't know about this "sale" until Friday? So we were done and I'm considering other options.....

I guess the only good news is I did most of this by phone or text, so I wasn't waiting at a stealership for 3+ hours....YMMV!

Good Luck![/QUOTE]

Very interesting/humorous story. Shows some of their tactics and also the level of absurdity that can be reached when going round & round with these guys.

BTW, this is the first time I've heard of a car dealer being open on a Sunday, barring a special event or something similar.

[MattTuck]

I'm always surprised when I hear how much people are paying per month for their car payments, and how long some of the loans are.

Last time around, I did most of my shopping by email and phone. Avoided some, but not all, of the shenanigans.

I look forward to the disintermediation of dealers.

[MattTuck]

Very interesting/humorous story. Shows some of their tactics and also the level of absurdity that can be reached when going round & round with these guys.

BTW, this is the first time I've heard of a car dealer being open on a Sunday, barring a special event or something similar.

Probably also the first time you've heard of a car company building cars in a tent outside of its factory :)

[benb]

I'm always surprised when I hear how much people are paying per month for their car payments, and how long some of the loans are.

Last time around, I did most of my shopping by email and phone. Avoided some, but not all, of the shenanigans.

I look forward to the disintermediation of dealers.

Yah the financial news had a series of articles about how crazy this is right now, almost as if it's a bubble that will have to burst, I think they were calling it a "Sub-Prime Car loan bubble."

The average new car purchase is now $37k and the average financed amount is $31k, and the average loan term is now 72 months with some car buyers going all the way out to 8-year loans.

Lots of it having to do with everyone buying SUVs loaded up with high margin electronic gadgets.. big scam the car companies pulled over on the public.

I keep wondering how many of these people are getting new cars every 3 years as well and never even paying the cars off.

[bfd]

Probably also the first time you've heard of a car company building cars in a tent outside of its factory :)

Hey, don't laugh as that tent worked! Look, I'm a big fan of Tesla and think their cars are fantastic. Yes, build quality isn't MB or BMW, but they do fix things, generally for free. Further, the performance is second to none whether you're buying the "base" $35k model which does 0-60 in like 5 seconds or the $70K M3P with its 3.2 second 0-60 speed, that rivals cars costing twice as much if not more!

Plus, what Tesla has that no other auto mfr can currently match is its infrastructure. There are superchargers everywhere and you can basically drive from SF to LA or even cross country! The V2 level 3 (direct current or 480v) superchargers are really fast charging at something like 400+miles per hour and the new V3 (1000 miles charging at 250kw), which is coming, is even faster! Every other mfr's EV only charges at level 2 (240v). So Tesla is way out there with infrastructure and it will take years for others to catch up!

But the bottom line is all dealerships are sleazy, that's just the nature of the business I guess. So, I'm still considering getting a M3, but will do like one of my buddies did and order it online. Then it gets delivered to my house. No hassles, pressures or bs. If I want to upgrade, then that's all on me.

Good Luck!

[C40_guy]

A long time ago, I was between jobs and spent some time selling cars. I figured why not, I'm a car guy, I know a lot about the specific marque and it might be fun.

Um, no. It is a soul sucking, mindless, brain rotting business. If you're not actually talking with a customer, your marginal cost to the dealership is $0, which gets you making gas runs, cleaning snow off cars, rereading sales brochures or cold calling.

If you're not at the store 7 days a week, you will likely end up splitting many of your sales with the rep who did the paperwork for your return customer...if of course that rep asks if they had talked with anyone earlier. Senior people get more phone calls, more walk-in traffic, many more referrals...and you can see the cobwebs holding them to their desks.

Sales managers know this, and for them, it's all a numbers game. Make sure that reps present numbers to every one who walks in, and some percentage of them will buy. Keep customers at the dealership, wear them down, lie to them, etc...

Saw it all. Fortunately my tenure there was quite short. And this, by the way, was at a well respected foreign marque dealership in the Boston area.

[AngryScientist]

I'm always surprised when I hear how much people are paying per month for their car payments, and how long some of the loans are.

.

i was shocked to see this recently:

https://www.cnbc.com/2019/02/13/-the-2019-lincoln-navigator-black-label-is-a-brilliant-return-to-american-luxury-roots-.html?&doc=105820465

https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2019/02/12/105734835-1550005204520img_4256r.530x298.jpg?v=1550005262

$99,595

i see these on the road all the time. OMG.

[sitzmark]

lol. did you miss the point that actually made the article funny?

yes, yes you did.

Didn't miss the satire ... found it cute in a sophomoric way. It's not exactly innovative to joke - then or now - about doing an enemy in and suffering little consequence, now is it? <cough, cough> <grin> What is more funny (ironic) to me is the conditioned need to "not be a moron" buying a vehicle and willingly fork over whatever the sign says for most everything else.

[Ozz]

Is there a scenario where financing a new car, is better than just paying cash?

I get the special financing where you can get low interest rates (0% to 3% or so) and comparing it to my opportunity cost (funds in savings / money market at 0.50% to 2.25%).

I am not sure how to factor in the depreciating asset (the vehicle) into this equation....

The last car I financed was a 2008 Prius, and had it paid off by 2010. Since then, I have just saved the approximate amount of the car payment every month and stuck it into a money market account. This allowed us to pay cash for my wife's new Audi a couple years ago.

I think it was a good decision since we avoided any financing interest expense, but of course immediately took a hit on a depreciating asset as soon as we drove off the lot. We paid about $45,000, and a mile down the road it was worth $40,000. :cool:

We plan on keeping it for 10+ yrs, so I think over that period of time it is a good decision. She only drives about 5500 miles per year, so the residual value should be good.

Are there any finance guys here who know how to evaluate this?

Thanks.

[AngryScientist]

Didn't miss the satire ... found it cute in a sophomoric way. It's not exactly innovative to joke - then or now - about doing an enemy in and suffering little consequence, now is it? <cough, cough> <grin> What is more funny (ironic) to me is the conditioned need to "not be a moron" buying a vehicle and willingly fork over whatever the sign says for most everything else.

i have no idea what you're talking about :confused:

[cderalow]

i was shocked to see this recently:

https://www.cnbc.com/2019/02/13/-the-2019-lincoln-navigator-black-label-is-a-brilliant-return-to-american-luxury-roots-.html?&doc=105820465

https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2019/02/12/105734835-1550005204520img_4256r.530x298.jpg?v=1550005262



i see these on the road all the time. OMG.


yup.

easy to make a 'luxury' suv or car tip the scales at $100k, especially at that size.

base price on an escalade is like $75k
BMW X7 starts at $74k

hell even a suburban base model is $50k.


long gone are the days of cheap efficient transportation.

and to think, they want almost $100k for a glorified ford.

That's tesla model X territory.

[sitzmark]

Tesla = Canyon. Others are flirting with the model.

My experience is just the opposite. Last week I walked up to the local dealer to see the Model 3.... [/QUOTE]

The reference to Canyon was for online pricing/ordering without need to visit a retail store. Can do that on Tesla's website.

[makoti]

Didn't miss the satire ... found it cute in a sophomoric way. It's not exactly innovative to joke - then or now - about doing an enemy in and suffering little consequence, now is it? <cough, cough> <grin> What is more funny (ironic) to me is the conditioned need to "not be a moron" buying a vehicle and willingly fork over whatever the sign says for most everything else.

So, when was the last time you went in to buy something at the grocery store & the clerk said "I can take $2 off that ice cream if you buy it today. We're really pushed on ice cream sales & my boss is breathing down my neck. I'll help you out if you help me out"? THAT'S why you don't want to be the moron who pays what it says. Most people would rather just know the price & pay, but no. We can't do that.

[Mark McM]

Tesla = Canyon. Others are flirting with the model.

My experience is just the opposite. Last week I walked up to the local dealer to see the Model 3....

The reference to Canyon was for online pricing/ordering without need to visit a retail store. Can do that on Tesla's website.

Car dealers in most states have successfully lobbied (i.e. paid off legislators) for laws that prevent things like this. Tesla has been in some lawsuits regarding their sales model, and has had to modify its sales model in some states.

[benb]

I'm not sure I think the Tesla X at $100k is any better than that lincoln in terms of excess and silly spending.

Tesla has neat designs but they are a hot mess of a car company.

This whole thing with "no dealerships" could have been great but they went and took all the worst things about no dealerships and combined them with all the worst behaviors of dealerships.

"Rich Rebuilds" on Youtube is a great watch. Tesla's a mess with delivery, maintenance, manufacturing, you name it.

Even the 0-60 times are misleading marketing. The difference between the Teslas and the cars they get compared to is the other cars can do that 0-60 run over and over and keep performing consistently, the Tesla can't without sufficient cool down time. There's a good reason Tesla doesn't market a comparison of 1-2 laps around a road circuit since their car goes into limp home mode on the 2nd lap. I'd rather Tesla reduced the 0-60 times and focused on improving something else since the owners are mostly not trying to use them as sports cars.

[sitzmark]

So, when was the last time you went in to buy something at the grocery store & the clerk said "I can take $2 off that ice cream if you buy it today. We're really pushed on ice cream sales & my boss is breathing down my neck. I'll help you out if you help me out"? THAT'S why you don't want to be the moron who pays what it says. Most people would rather just know the price & pay, but no. We can't do that.

If you walk in and pay the sticker it goes very quick and smooth. Not exactly like the grocery store, 'cause there's "paperwork" and such, but you can bypass the disagreeable part. Farmer's market more like a "sales" experience.

I sometimes drop by dealerships to look at vehicle features to see/touch specific features of interest. I generally buy based on specific/desired functionality and am not a typical customer. If approached by a need-to-make-a-sale rep, I honestly say "just looking and talking to me is a waste of your time". If sh/e wants to keep talking, no big deal. When I'm there to buy, I have a very good idea of what I want and what I want to pay. I lead with that. I walk at any point discussions deviate in a meaningful way from that number. I "allow" an obligatory talk with manager, but don't hang around for multiple talks. It's possible to manage the processs without being a prick and without being rolled over. Important not to wait until you're desperate for a vehicle/deal tho. When in that position it can be a different story.

[buddybikes]

If you aren't a wrench, and don't want to spend much money on car, establish good relationship with your local repair shop. Stuff will come into them regularly, whether it be by people that can't afford it anymore, deaths, moving, etc. Your risks are bit lower, since you are established customer.

Shop I go to has nice 2008 Outback with the known Subaru problems all replaced for decent price. Not with sales tag on it, but just a "ask". In times past, I had my Saab mechanic find a nice wagon at auction which I approved to him to buy after he checked it out, put 140k on the car before selling. He made 1K to buy, get back to the shop and check it out. Fair deal.

[C40_guy]

Is there a scenario where financing a new car, is better than just paying cash?

I get the special financing where you can get low interest rates (0% to 3% or so) and comparing it to my opportunity cost (funds in savings / money market at 0.50% to 2.25%).

I am not sure how to factor in the depreciating asset (the vehicle) into this equation....

The last car I financed was a 2008 Prius, and had it paid off by 2010. Since then, I have just saved the approximate amount of the car payment every month and stuck it into a money market account. This allowed us to pay cash for my wife's new Audi a couple years ago.

I think it was a good decision since we avoided any financing interest expense, but of course immediately took a hit on a depreciating asset as soon as we drove off the lot. We paid about $45,000, and a mile down the road it was worth $40,000. :cool:

We plan on keeping it for 10+ yrs, so I think over that period of time it is a good decision. She only drives about 5500 miles per year, so the residual value should be good.

Are there any finance guys here who know how to evaluate this?

Thanks.

Two pieces to this:

First, if you pay cash for the vehicle, the dealership will miss out on their finance commission. You could potentially lower the net cost of the vehicle by some portion of that commission. However, a 0% program is probably coming from the manufacturer and not the bank down the street, so they may not benefit by financing at 0%.

If you do take the 0% financing, typically you can pay it off within the first couple of weeks without any penalty or surcharge, so from a financial standpoint, it's just like you paid cash. You might bump your credit rating up a bit by taking out and then paying off that loan.

Now, onto your depreciation question. Your shiny new vehicle is going to depreciate at the same rate no matter how you financed it, cash, loan or otherwise. If you are a risk taker, use the excess funds from financing the car and put it into the market. However, if you've got the cash to buy a new car outright, your risk profile is probably a bit lower.

Yea, if you have a loan on the car, you may be upside down on it for a while (loan amount is higher than the value of the car). But again, the vehicle will depreciate at exactly the same rate whether you bought it outright or financed 100% of the purchase...

The real question is how you'd put the money to use if you didn't use it to purchase the car. And whether you'd sleep better at night one way or another...

As an aside: I'm on a couple of car forums, and it amazes me how deeply young people will go into hock to be able to drive the shiny new car, typically trading up from a two or three year old car, or perhaps rolling over leases. As someone who eventually buys the cars they get out of, I just hope that they change the oil regularly. :)

Open to other thoughts/corrections/etc. :)

[ftf]

Two pieces to this:

First, if you pay cash for the vehicle, the dealership will miss out on their finance commission. You could potentially lower the net cost of the vehicle by some portion of that commission. However, a 0% program is probably coming from the manufacturer and not the bank down the street, so they may not benefit by financing at 0%.

If you do take the 0% financing, typically you can pay it off within the first couple of weeks without any penalty or surcharge, so from a financial standpoint, it's just like you paid cash. You might bump your credit rating up a bit by taking out and then paying off that loan.

Now, onto your depreciation question. Your shiny new vehicle is going to depreciate at the same rate no matter how you financed it, cash, loan or otherwise. If you are a risk taker, use the excess funds from financing the car and put it into the market. However, if you've got the cash to buy a new car outright, your risk profile is probably a bit lower.

Yea, if you have a loan on the car, you may be upside down on it for a while (loan amount is higher than the value of the car). But again, the vehicle will depreciate at exactly the same rate whether you bought it outright or financed 100% of the purchase...

Open to other thoughts/corrections/etc. :)

For financing to win, all you have to do is get the rate 2% or lower, as there are banks giving out over 2% in savings accounts.

[Ken Robb]

yup.




long gone are the days of cheap efficient transportation.


. I can't think of a time when there have been more cheap efficient automobiles for sale when prices are adjusted for inflation.

[ftf]

Two pieces to this:

First, if you pay cash for the vehicle, the dealership will miss out on their finance commission. You could potentially lower the net cost of the vehicle by some portion of that commission. However, a 0% program is probably coming from the manufacturer and not the bank down the street, so they may not benefit by financing at 0%.

If you do take the 0% financing, typically you can pay it off within the first couple of weeks without any penalty or surcharge, so from a financial standpoint, it's just like you paid cash. You might bump your credit rating up a bit by taking out and then paying off that loan.

Now, onto your depreciation question. Your shiny new vehicle is going to depreciate at the same rate no matter how you financed it, cash, loan or otherwise. If you are a risk taker, use the excess funds from financing the car and put it into the market. However, if you've got the cash to buy a new car outright, your risk profile is probably a bit lower.

Yea, if you have a loan on the car, you may be upside down on it for a while (loan amount is higher than the value of the car). But again, the vehicle will depreciate at exactly the same rate whether you bought it outright or financed 100% of the purchase...

Open to other thoughts/corrections/etc. :)

For financing to win, all you have to do is get the rate 2% or lower, as there are banks giving out over 2% in savings accounts. Plus, personally I'd rather have liquid cash, than have it tied up in a depreciating asset, especially when you can make interest on the money in the bank.

[Gummee]

For financing to win, all you have to do is get the rate 2% or lower, as there are banks giving out over 2% in savings accounts. Plus, personally I'd rather have liquid cash, than have it tied up in a depreciating asset, especially when you can make interest on the money in the bank.

This

M

[benb]

Even in my 20s I "got" that cars depreciating is only a concern if you're not going to "use up" your car or if you're shopping for lightly used cars.

I could care less about the book value of my Subaru, it's not going anywhere until it's worn out.

I swear depreciation, etc.. is a major tactic the car dealerships use to get people into these stupid "replace every 2-3 years" cycles.

Maximum years with the car paid for is the way to go regardless of whether you paid cash or got a good super low interest loan.

My car is 7 years old (but only has 70k miles), I can go buy just about any car I'd actually want in cash (most of the cars I can't afford or would be stupid to buy I don't think I'd actually want) but I won't cause there's no point.

But then driving down the road nobody can see the size of your car loan or your bank balances.

[ftf]

I swear depreciation, etc.. is a major tactic the car dealerships use to get people into these stupid "replace every 2-3 years" cycles.



I don't understand this, deprecation should make you want to hold on to the vehicle....

[NYCfixie]

For financing to win, all you have to do is get the rate 2% or lower, as there are banks giving out over 2% in savings accounts.

You also need to factor the taxes on that interest income so you will need to make more than 2% on your money to break even but it is always a sound decision to keep cash and take out a loan at low interest rate (if you can) especially because the "cost of money" right now is still very cheap.

We did this for our new 2009 Outback. We walked in and wanted to pay cash. Dealer/Chase was offering 1.9% for 36 month loan. Bank was offering 2.75% CD for 36 months. We financed, put the money in a CD, made the monthly car payment from checking account, and after taxes we made a little money on the CD.

But again, not everyone is in a financial position to do this type of transaction. Our monthly car loan payment was over $1000 but it lasted for only 36 months and we still had the cash in the bank in case of an emergency.

[Ozz]

I don't understand this, deprecation should make you want to hold on to the vehicle....
The dealers try to convince people to trade in their cars before they lose any more value.....and to ignore the fact that they have a perfectly good, functional vehicle, that if paid off just costs them gas, tires, maintenance and insurance. The same stuff they would have to pay on the new car.

But, you are correct....depreciation should make you want to hold onto your car as long as you can.

[AngryScientist]

The dealers try to convince people to trade in their cars before they lose any more value.....and to ignore the fact that they have a perfectly good, functional vehicle, that if paid off just costs them gas, tires, maintenance and insurance. The same stuff they would have to pay on the new car.

not to mention that once you get to where you really want to be on the depreciation curve, you can drop that insurance to the minimum required, and then you really start to see some money back in your pocket :)

[C40_guy]

I don't understand this, deprecation should make you want to hold on to the vehicle....

Um, not exactly.

If I'm holding a depreciating asset, one that I also have to pay to fix periodically, I might choose to substitute a different depreciating asset. It might be wise financially, or not. Most people don't make automotive purchases or ownership decisions based on financial considerations.

Case in point...a coworker, good friend, and generally smart person, announced that she was going to sell her relatively new 911 Cabrio so that she could purchase a new Tesla... "to save on gas."

Um, no.

If she wanted to do this as her effort to save the planet, fine...but the transaction expense alone, not even the sales tax, would equal what she spends on gas annually. Forget the depreciation on the Porsche, or the Tesla.

In my case, I'm driving a 14 year old Audi allroad. It's now at the lower end of the depreciation curve. Just had to put some money into it. Might have to again next year. Maybe not. I'd like to move to a 4 year old Audi Q5...but from a financial standpoint that's just a dumb idea. As long as my current vehicle is reliable and safe, it's the cheapest thing I can own. Well, almost, the most fiscally responsible move would be to sell the allroad and buy a Honda/Toyota/Subaru/etc with the proceeds. But I'm not going there. :)

[Ozz]

not to mention that once you get to where you really want to be on the depreciation curve, you can drop that insurance to the minimum required, and then you really start to see some money back in your pocket :)
Also, vehicle registration....I pay about $100 each for our fully depreciated 2008 Prius and 2003 Pilot.....and about $400 for the 2017 Audi

The WA State "$30 car tabs" has about $50 in fees, plus an excise tax (based on vehicle value) to fund the Sound Transit Light Rail fiasco....but that is a whole 'nuther conversation.

[Clean39T]

Um, not exactly.

If I'm holding a depreciating asset, one that I also have to pay to fix periodically, I might choose to substitute a different depreciating asset. It might be wise financially, or not. Most people don't make automotive purchases or ownership decisions based on financial considerations.

Case in point...a coworker, good friend, and generally smart person, announced that she was going to sell her relatively new 911 Cabrio so that she could purchase a new Tesla... "to save on gas."

Um, no.

If she wanted to do this as her effort to save the planet, fine...but the transaction expense alone, not even the sales tax, would equal what she spends on gas annually. Forget the depreciation on the Porsche, or the Tesla.

In my case, I'm driving a 14 year old Audi allroad. It's now at the lower end of the depreciation curve. Just had to put some money into it. Might have to again next year. Maybe not. I'd like to move to a 4 year old Audi Q5...but from a financial standpoint that's just a dumb idea. As long as my current vehicle is reliable and safe, it's the cheapest thing I can own. Well, almost, the most fiscally responsible move would be to sell the allroad and buy a Honda/Toyota/Subaru/etc with the proceeds. But I'm not going there. :)

When shopping for used BMW X3/X5 options, this is painfully apparent - the depreciation curve for luxury cars doesn't really flatten until you get to year six or so - CPO is over, and mileage is around 70K for a good one..

The key of course is to find one that was bought new by someone with deep pockets who didn't drive it much and had it serviced at the dealer.

They exist - but take time to uncover. We just extended our current lease so I can take my sweet time finding that diamond in the rough.

Which, I'm pretty happy with Mazda for that option: we get six months at the same payment (which is low for the vehicle in question), same mileage per month, no extra fees, no early-termination fee, and our pay-off amount continues to depreciate over that period. That's a nice "free option" to keep hunting for the right car...

[Ken Robb]

When shopping for used BMW X3/X5 options, this is painfully apparent - the depreciation curve for luxury cars doesn't really flatten until you get to year six or so - CPO is over, and mileage is around 70K for a good one..

The key of course is to find one that was bought new by someone with deep pockets who didn't drive it much and had it serviced at the dealer.

They exist - but take time to uncover. We just extended our current lease so I can take my sweet time finding that diamond in the rough.

Which, I'm pretty happy with Mazda for that option: we get six months at the same payment (which is low for the vehicle in question), same mileage per month, no extra fees, no early-termination fee, and our pay-off amount continues to depreciate over that period. That's a nice "free option" to keep hunting for the right car...

What Mazda
do you have? We are very happy with our 3 Sedan.

[Ralph]

I figure most cars depreciate 80-90% of their value over a 10 year period. So that's in the range of $200-300 per month. Depending on price out the door new. And much more on a luxury car.

That same money invested in a balanced mutual fund over the same period most likely would have made 5-8%....depending on stock and bond market performance. The past 10 years...in all stock fund...would have done much better…..but who knows about future?

So I figure you are missing out on $150-$250 per month (paying cash) in investment income or growth...in a fairly modest vehicle....depending on how markets did...or how aggressively you invest. or where the business cycle is when you do this.

It's not too hard to figure out a fairly modest vehicle you paid cash for and kept 10 years is costing you $400-$500 per month.....plus maintenance, insurance, and repairs. (hello Uber and Lyft)

So....I lease when markets are way down...and I figure investment returns for future are good. Depreciation and opportunity costs are way more than most folks realize.

As an old guy....with no mortgage on a nice home and who can pay cash for anything I want.....more and more I think paying cash for a depreciating vehicle is a bad idea...."no matter how proud we feel when doing it". And I know most of us were raised with the idea of paying cash for things being a good way.

[Dave]

I haven't made a car payment since 1992. I used to put money into savings bonds and about every 4 years, I'd pull the money out, trade in my old car and pay for the new car with cash.

I don't want to own an old car - too much chance of an expensive repair bill.

Newer cars are not cheap to own. There's both high depreciation and high property taxes to pay. I still do it because I can afford it. I have kept a few cars for 8-9 years, but only three that I can think of.

Some people spend much more on annual vacations than I spend on newer cars.

[Ken Robb]

Besides dollars/cents I evaluate the advances made in crashworthiness of old vs. new cars.

[Lanternrouge]

Something that hasn't really been discussed is the hedonistic value of a nice car. For some people, driving a nice car is truly worth the money. For example, my 2004 Camry is not at all fun to drive, but it's economically efficient. If you factor in that enjoyment may be derived from driving something nicer and newer, it's a different game. For example, a friend who has a 2019 Porsche GT3 gets a lot of joy out of his car, even though it's in no way rational by the numbers.

[Clean39T]

Besides dollars/cents I evaluate the advances made in crashworthiness of old vs. new cars.An excellent point.

And with the number of inconsiderate folks driving around in giant trucks and heavy-haulers these days, trading gas mileage and a bit of car payment for some extra safety on the road just might be worth it.

I test-drove a Honda Fit last week - was terrifying on the freeway.

[Clean39T]

Something that hasn't really been discussed is the hedonistic value of a nice car. For some people, driving a nice car is truly worth the money. For example, my 2004 Camry is not at all fun to drive, but it's economically efficient. If you factor in that enjoyment may be derived from driving something nicer and newer, it's a different game. For example, a friend who has a 2019 Porsche GT3 gets a lot of joy out of his car, even though it's in no way rational by the numbers.Don't forget the hedonistic value of being seen as frugal and environmentally conscious... What do they call it...virtue signalling?

We all have reasons for what we do.

And if someone can explain the reason behind hanging rubber testes from ones trailer hitch, you understand the whim of the masses better than I..

Sent from my Pixel 2 XL using Tapatalk

[54ny77]

Good luck with that. Might happen in your lifetime, or that of your offspring.

Talk about a Nationwide entrenched lobbying group of special interests, which is to protect it's constituents (franchised dealers) which de facto means they likely get support from the manufacturer also. It's probably the main reason why Tesla doesn't have wide network of dealerships in the U.S. A labyrynth of local laws designed to protect the franhisee. Instead Tesla has company owned "showrooms."



[QUOTE=MattTuck;2521406

I look forward to the disintermediation of dealers.[/QUOTE]

[dan_hudson]

Apologies if this has already been posted...

https://www.thisamericanlife.org/513/129-cars

Doesn't make them out to be saints but may make some of the shenanigans folks have encountered buying a car from a dealer make more sense.

[Lanternrouge]

And if someone can explain the reason behind hanging rubber testes from ones trailer hitch, you understand the whim of the masses better than I..

Sent from my Pixel 2 XL using Tapatalk

I'm pretty sure I can't give a satisfactory explanation for that.

[Lanternrouge]

Don't forget the hedonistic value of being seen as frugal and environmentally conscious... What do they call it...virtue signalling?

We all have reasons for what we do.

Sent from my Pixel 2 XL using Tapatalk

Driving a car that my wife not so lovingly mocks as a POS makes me feel good in the sense that I have the power not to really care what I'm driving since I'm the same person regardless of the car.

[pjm]

What Mazda
do you have? We are very happy with our 3 Sedan.

Speaking of the Mazda 3, I sat in the all new 2019 the other day and was really impressed with the interior quality of that car. It really feels like a much more expensive car inside. They are approaching Audi levels of fit and finish.

[Clean39T]

Driving a car that my wife not so lovingly mocks as a POS makes me feel good in the sense that I have the power not to really care what I'm driving since I'm the same person regardless of the car.

My comment wasn't a slight in your direction... I agree with you. But I do wonder if we might be turned into different people if we chose to drive a jacked up truck - sort of like Trading Places. Maybe I'd get the truck-nutz. Nature v Nurture.

[Ken Robb]

Speaking of the Mazda 3, I sat in the all new 2019 the other day and was really impressed with the interior quality of that car. It really feels like a much more expensive car inside. They are approaching Audi levels of fit and finish.

I think that has been typical Mazdas for at least 5 years. We may buy a new 3 in a year or so. All the reviews have been very positive.

[Clean39T]

I think that has been typical Mazdas for at least 5 years. We may buy a new 3 in a year or so. All the reviews have been very positive.

The new 3 looks great on the inside - very minimalist and sleek.. My wife really likes the CX-3 and if the 2020 version gets the new interior from the 3, maybe we'll get one of those.

We have a CX-5, 2016 Grand Touring - and it's been a very good vehicle overall - lots of long road trips, slept in it on more than a few occasions.. The only niggle is the "maintenance due" warning comes on randomly, or seemingly so - never at logical service intervals, and the dealer can't seem to get it to fully reset. That, and it's woe-fully underpowered for the size of the car - acceleration is suggestion, not a demand. It handles very nicely though, just have to keep the speed up using gravity or some other force.

[makoti]

I think that has been typical Mazdas for at least 5 years. We may buy a new 3 in a year or so. All the reviews have been very positive.

I looked at a 3 last year to replace a 3 I'd had for 14 years, and had the opposite opinion. My 14 y/o car was better handling, quicker, and just as nice inside as the new one. Nothing special on either car, pretty much midrange line. I went in very biased towards Mazda, came out not so much. I could not make myself like that car.

[C40_guy]

I don't want to own an old car - too much chance of an expensive repair bill.


Depends on the car, your luck and whether you have a good, local, reliable private mechanic.

I had a great private mechanic for many years. Then we moved 60 miles away and now I have a great (moderately expensive) private mechanic.

One challenge with this strategy is long distance travel. If I'm driving a FoChevy or ToyoSubieonda, dealers are a dime/dozen and I'd take my chances. On the other hand, driving an older Audi, simply pulling into a dealer lot runs about $1100, and that's before I hand over the key.

So...last time we took a long family trip, we rented a minivan from Hertz and left our cars at home. Didn't cost that much for a week, it had like 37 cupholders, got better mileage than my allroad, and if it burped, I would have just gotten another one...

[MattTuck]

Good luck with that. Might happen in your lifetime, or that of your offspring.

Talk about a Nationwide entrenched lobbying group of special interests, which is to protect it's constituents (franchised dealers) which de facto means they likely get support from the manufacturer also. It's probably the main reason why Tesla doesn't have wide network of dealerships in the U.S. A labyrynth of local laws designed to protect the franhisee. Instead Tesla has company owned "showrooms."

Yes, you've listed the main reason why I dislike them and hope they go away. I'm a bit more optimistic that citizens are going to demand more of their representatives in the future, and this kind of special interest influence will be curtailed.

I'm not sure that car manufacturers are in love with the dealer model either. That is a layer of profit that they miss out on, and information on the web is orders of magnitude more accessible than when dealers were started.

But yes, they're not going away in the near term.

[tbike4]

I will pile on a little for Mazda. I got the 2018 CX-5 GT 4 months ago. IMO the interior quality is pretty darn good for the price. You would have to go to a premium brand at $15000 + for better. I find the power to be fine but I am not climbing up and down mountains. @Clean39T the word for you is TURBO. https://www.caranddriver.com/reviews/a25693266/2019-mazda-cx-5-turbo-by-the-numbers/

Tomorrow will be my first service on the Mazda at the dealer where I bought it, the first 2 are free so I will see how it goes.

[deechee]

I looked at a 3 last year to replace a 3 I'd had for 14 years, and had the opposite opinion. My 14 y/o car was better handling, quicker, and just as nice inside as the new one. Nothing special on either car, pretty much midrange line. I went in very biased towards Mazda, came out not so much. I could not make myself like that car.

I agree. Engines and drivetrains are more efficient but then we just make everything bigger. Why is the Mazda 3's base wheel 16" now?? My inlaw's kei-car in Japan has 13" and is a ton more fun to drive with something like 60hp. And yes, I'm all for safety, but the #1 issue I have with new cars is I can't see anything outside of them. The A pillars are ENORMOUS. They're not that fat in Japan. Doors are slimmer and window lines lower. Cocooning ourselves just makes us less aware of what's around us.

Since the original post was about buying in Canada, my personal experience using the APA (https://apa.ca) They're the folks who are often referred to in CTV/CBC consumer stories. They can get you the sheets with the cost breakdowns, but they can also pre-negotiate for you. So you walk in, price is clearly explained, you agree/not and that's it. Great organization.

[Dave]

Depends on the car, your luck and whether you have a good, local, reliable private mechanic.

I had a great private mechanic for many years. Then we moved 60 miles away and now I have a great (moderately expensive) private mechanic.

One challenge with this strategy is long distance travel. If I'm driving a FoChevy or ToyoSubieonda, dealers are a dime/dozen and I'd take my chances. On the other hand, driving an older Audi, simply pulling into a dealer lot runs about $1100, and that's before I hand over the key.

So...last time we took a long family trip, we rented a minivan from Hertz and left our cars at home. Didn't cost that much for a week, it had like 37 cupholders, got better mileage than my allroad, and if it burped, I would have just gotten another one...

I'm my own private mechanic, but there's no way I'm pulling an engine/trans out of a modern front/all wheel drive car. I've pulled the engines from many rear wheel drive cars and built a rear wheel drive hot rod.

I agree about the rental car. I even do it so my relatively new car stays new longer.

[Clean39T]

I will pile on a little for Mazda. I got the 2018 CX-5 GT 4 months ago. IMO the interior quality is pretty darn good for the price. You would have to go to a premium brand at $15000 + for better. I find the power to be fine but I am not climbing up and down mountains. @Clean39T the word for you is TURBO. https://www.caranddriver.com/reviews/a25693266/2019-mazda-cx-5-turbo-by-the-numbers/



Tomorrow will be my first service on the Mazda at the dealer where I bought it, the first 2 are free so I will see how it goes."We'd love to see the turbo engine available beyond the Grand Touring Reserve trim level, which starts at $35,865, and the Signature at $37,885. Our test example was nearly $40,000 with some accessories and the $300 upcharge for Machine Gray paint. That may be approaching premium pricing, but this CX-5 feels like a premium SUV."

CX-5 or 2yr old CPO X3...hmm...

We got ours for $340/Mon lease, zero down on a crazy special at the time. I wouldn't pay $550/Mon for it.

Sent from my Pixel 2 XL using Tapatalk

[Mark McM]

The new 3 looks great on the inside - very minimalist and sleek.. My wife really likes the CX-3 and if the 2020 version gets the new interior from the 3, maybe we'll get one of those.

I suspect that's not likely. The CX-3 (Mazda's subcompact cross-over SUV) is actually based on the Mazda2 platform, not the Mazda3. The Mazda2 is the smallest sub-compact Mazda makes, and it is currently not imported into the US. However, some versions of the Toyota Yaris sold in the US are actually rebadged Mazda2s.

The Mazda cross-over SUV that is based on the Mazda3 platform is the CX-5.

[redir]

Never bought a new car and never will. But I remember my Dad always bought new and he would find out how much the car costs to the dealership and then offer them a reasonable sum on top of it. Basically he would just say, I know how much you paid for the car, here's a few bucks for your trouble.

The average American pays almost $900 a month on their car. that includes, the car payment, maintenance, gas and so on. I just read that stat the other day since I am looking for a 'new to me' car and I could not believe it. In the 20 years that I've been buying cars I've probably not paid more then $10,000. But I get it, a nice new car with it's new car smell and a warranty has it's place.

[fmradio516]

Ive never owned a new car, but would like to one day. I dont drive a lot, but when I do, its mostly long drives to see family from Boston to Connecticut or NY. I have had my share of trouble on the side of the highway as I've never owned a car with less than 160k miles on it.

Any now after all those experiences, im constantly paranoid that I will get stuck on a drive anywhere. Always looking down for the check engine light multiple times on a drive... a new car (id hope) would fix that!

[buddybikes]

Go CPO route, and get the online price. Yes understand there is an upcharge for CPO, but personally I have found these cars basically like new. Usually 2 year off lease.

[Hawker]

I consider myself a "car guy" but I only buy used. Had nothing but great service from Accords and Camry's for the last twenty-five years. However, I bought a '08 Mazda 3 hatch in 2011 and love it. I'm a drummer and cyclist and the car has room to spare with the back seats down.

It also handles a better than the Accord but is a bit louder on the highway. That seems to be a long running complaint with the 3 and probably relates to Mazda trying to keep the weight down by reducing some sound insulation. None the less, it's a great car.

And the This American Life recommendation in post 123 is worth checking out. I found it fascinating. Of course my Dad was an Oldsmobile salesman for 30 years, so I related to a lot of it. Selling cars is a tough job.

[andeww]

I picked up this 2002 on Sunday after it had been on craigslist for about 12 hrs.
I have been very lucky with craigslist over the years. I make sure i am dealing with someone that owns the car and is not just flipping it. I ask for proof of maintenance records and anything else he can prove via paperwork. Then i would bring the car to a specialized mechanic or dealer for a full PPI ($200~)

I am just excited and felt like sharing a pic of my car :)

https://i.imgur.com/gwodf1M.jpg

[fmradio516]

nice 2002! lucky!

[Clean39T]

I picked up this 2002 on Sunday after it had been on craigslist for about 12 hrs.
I have been very lucky with craigslist over the years. I make sure i am dealing with someone that owns the car and is not just flipping it. I ask for proof of maintenance records and anything else he can prove via paperwork. Then i would bring the car to a specialized mechanic or dealer for a full PPI ($200~)

I am just excited and felt like sharing a pic of my car :)



My brother had one of those in the late 90s and I got to drive it a fair amount. Great car - congrats!

[sevencyclist]

My latest car purchase was done through price shopping between three local dealers, and settle on a percentage off MSRP. Then I ordered my car the way I wanted it to be. Waited for an allocation to open up, and finally took delivery after 9 months.

The only upsell attempt was at the delivery when the finance person offered protection packages etc, which I listened briefly and turned down.

Quite happy with the process and the car!

[Chris]

Speaking of the Mazda 3, I sat in the all new 2019 the other day and was really impressed with the interior quality of that car. It really feels like a much more expensive car inside. They are approaching Audi levels of fit and finish.

Just bought a 2019 CX-5 for my daughter yesterday. We were looking at small SUVs like the CRV, Rav4 and the Forrester. Never gave the Mazda much consideration, but read ratings/reviews and checked one out. They seem very nice for the money.

[fmradio516]

Just bought a 2019 CX-5 for my daughter yesterday. We were looking at small SUVs like the CRV, Rav4 and the Forrester. Never gave the Mazda much consideration, but read ratings/reviews and checked one out. They seem very nice for the money.

Cool I just had one as a rental yesterday. The new RAV4 caught my eye though :)

[redir]

Oh man! I love those old 2002's I've always wanted one of those. I've turned into a MErcedes guy after owning a '94 E420 for ten years. She's dying now but overall has been great. I'm looking for an S-Class now. Nothing like owning a $100,000 car 10% of it's original cost. Yup there might be issues but still.

[steveoz]

I've been in my Tacoma for 12 yrs now, was starting to get itchy after seeing the 2019 RAV4 , but hearing the dealer stories reminds me of how much I hated dealerships....and the Tacoma still runs great, needs paint though ...and an interior detailing....

[Gummee]

Oh man! I love those old 2002's I've always wanted one of those. I've turned into a MErcedes guy after owning a '94 E420 for ten years. She's dying now but overall has been great. I'm looking for an S-Class now. Nothing like owning a $100,000 car 10% of it's original cost. Yup there might be issues but still.

I was driving Dad's 95 S320 for a while... Ran like a top for most of it's life, but remember that you're driving a $100k car that has $100k car repair and parts bills.

For example: the alternator died. Did some digging around online and found re-man derailleurs for $225-250. The dealer wanted *$625!* for a new-new one. No thanks, I'll politely decline your offer of a butt-raping thanks! Had the thing rebuilt for a hair over $200 by a local guy, thus saving $ AND keeping a small businessman in business

M

[AngryScientist]

For example: the alternator died. Did some digging around online and found re-man derailleurs for $225-250. The dealer wanted *$625!* ...

M

you're mixing up your jalopies there gumm...

[sparky33]

I avoid financing, however:

Will the dealer be more reluctant to negotiate on price if they know you are paying cash?
Or put another way, do you think there is more wiggle room on price if I say I am going to finance the vehicle? I suppose there is nothing to prevent me from immediately paying off a loan, making it nearly the same as paying cash.

for extras, I'll take prepaid dealer maintenance on a new car, as the savings seem clear...or am I missing something there.

I worked for a dealership in Central New York state for a few months. As a salesman they teach you to squeeze every last penny out of the consumer. It is a very shady business and the tactics used are awful.

The best time to shop for a new vehicle is towards the end of the month as there are quotas to fill. Purchasing on the last day of the month will net you the best deal.


Never agree to first pen and expect to be there for hours in almost every case. The longer you are at the dealership the more you are invested in purchasing the car. The dealership will add a couple of percentage points to your loan if financing to make extra $ if they can. They will also try and sell their extended warranty for extra $.

I did very well for a first time Salesman, but just like the consumer the dealership will fudge profits and move them around so the new guys do not get the commissions that they deserve. I observed a lot of shady business and left shortly after realizing my commission checks were nowhere near what they were supposed to be...

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[wildboar]

A few car shopping tips:

https://www.adultswim.com/videos/check-it-out-with-dr-steve-brule/cars

[sparky33]

I use a broker (http://thecarconsultancy.com/) also.

He knows when and how to get the best price and charges me a flat fee. It saves me a whole lot of money and hassle.

find a good car broker. best process ever. it's like ordering at a greek diner--big menu! let 'em know what you want, he comes back with the price, and presto. that includes new cars by the way. i've bought a car using the service, and a buddy buys his fleet vehicles that way (which is often how brokers get better pricing, since they can work with fleet sales). never have to set foot in a dealership. instead, car (or truck) can get delivered or just take a cab/uber to the broker's place and pick it up, chat it up & have a cuppa joe, drive home.

[djg]

I picked up this 2002 on Sunday after it had been on craigslist for about 12 hrs.
I have been very lucky with craigslist over the years. I make sure i am dealing with someone that owns the car and is not just flipping it. I ask for proof of maintenance records and anything else he can prove via paperwork. Then i would bring the car to a specialized mechanic or dealer for a full PPI ($200~)

I am just excited and felt like sharing a pic of my car :)

https://i.imgur.com/gwodf1M.jpg

Nice find -- and a much more promising craigslist for that vintage than anything in the Northeast.

Alas, I'll be selling my '06 M3 ragtop soon (very different vehicle, but I'm noticing a brand pattern in your driveway).

[Ken Robb]

I wonder what a buyer of an extended warranty or pre-paid maintenance gets if the car is totaled or stolen.

[Clean39T]

I wonder what a buyer of an extended warranty or pre-paid maintenance gets if the car is totaled or stolen.A refund - maybe..

We bought one on a car and got a pro-rated refund when we sold it.

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[.RJ]

More info on your E91 please :)


I am just excited and felt like sharing a pic of my car :)

https://i.imgur.com/gwodf1M.jpg

[redir]

I was driving Dad's 95 S320 for a while... Ran like a top for most of it's life, but remember that you're driving a $100k car that has $100k car repair and parts bills.

For example: the alternator died. Did some digging around online and found re-man derailleurs for $225-250. The dealer wanted *$625!* for a new-new one. No thanks, I'll politely decline your offer of a butt-raping thanks! Had the thing rebuilt for a hair over $200 by a local guy, thus saving $ AND keeping a small businessman in business

M

Yeah I found I can still actually do most of the work myself in that time period. They had impressive electronics for the 1990's but not like todays cars.

[Peter P.]

Will the dealer be more reluctant to negotiate on price if they know you are paying cash?

From what I've read, you negotiate financing SEPARATELY from the vehicle price, and SEPARATELY from any trade-in.

If the salesperson brings up the financing during conversation, you decline to discuss it until AFTER price is settled and in writing.

From a logical standpoint, one should not have any bearing on the other.

If the salesman persists, start to walk and see what happens...

[carpediemracing]

I avoid financing, however:

Will the dealer be more reluctant to negotiate on price if they know you are paying cash?
Or put another way, do you think there is more wiggle room on price if I say I am going to finance the vehicle? I suppose there is nothing to prevent me from immediately paying off a loan, making it nearly the same as paying cash.

for extras, I'll take prepaid dealer maintenance on a new car, as the savings seem clear...or am I missing something there.

Generally the profit on a car is divided into "car" and "finance". Dealers make money off of finance. You can be preapproved for a car loan so you don't have to take their financing. The dealer might be able to offer a better rate, so you should be ready to take advantage, if that's the case.

If you want to negotiate on purchase price, the dealer will often "lose" money on the "car" but make it back on "finance". So finance it, as long as there are no hidden/other fees. If you make payments for a brief period (I've heard 60 or 90 days) then pay off the loan, you pay a couple/few months interest but nothing else. Dealer still makes their cut from the loan. If it's a brand you like then you can build dealer loyalty and still pay as little as possible.

Dealers always make money on cars, pretty much. I looked at some old commission sheets. Car profit was -$1340, finance was +$1976. So no profit on car means no commission to me (just a flat for selling a unit), but dealer made money on car. This doesn't include $1445 the service dept "charged" the sales dept for servicing the car.

[makoti]

From what I've read, you negotiate financing SEPARATELY from the vehicle price, and SEPARATELY from any trade-in.

If the salesperson brings up the financing during conversation, you decline to discuss it until AFTER price is settled and in writing.

From a logical standpoint, one should not have any bearing on the other.

If the salesman persists, start to walk and see what happens...

Yep. Totally separate parts of the deal. If you talk about financing while talking price, they can pad one to make up for the other & that only helps the dealer, not you.
There are 3 parts to the process:
-Price
-Financing
-Trade in
Work each on on its own, getting the best deal you can on each.

[cetuximab]

find a good car broker. best process ever.

How does one find a car broker. I was trying to buy a F-150 XL diesel. But they would only sell the diesel in a platinum or similar expensive trim level. I believe XL trim to platinum trim is $15-20k difference. They wanted a fleet purchase of three vehicles to get the diesel in the XL trim. Can a car broker get the fleet purchase equivalent...without having to buy three.

I got a Ram Ecodiesel 1500 for $37,300. So I probably will not need another car for 10-15 years.

I had a similar experience. I went to the local Ram dealer and they quoted me something in the mid to high 40s. I found the truck I wanted on cars.com a couple states away for significantly cheaper. I called the local dealer. Told him the specifics and the $37,3 price and said if you can match them I would rather buy from you. They had a truck with those exact specs delivered a couple days later and I went in and sign papers and drove home. I surprised by the fees. Maybe that’s where they extracted their pound of flesh.

It was much more pleasant on the phone.

[Dave]

Have a payment calculator handy, so you can compare the monthly payment to the alleged interest rate. Back in the 80's I bought a base model Datsun pickup that was advertised at a specific low price. I bought the truck for the advertised price, but the monthly payment was higher than it should have been for the interest rate. I brought that to their attention and got it fixed.

These days I pay cash, so financing is not part of the deal. The only exception is I got $1500 off for using Ford financing on an Escape, so I took out the loan, made the obligatory 3 payments and then paid off the loan. Some interest was paid, but it still lowered the final price.

[Elefantino]

Speaking of excitement, we saw this little jewel online and immediately went to the dealer and bought it while it was still being detailed, before it ever went on the used lot.

2007. 31K miles. Looks brand new. The boss is quite pleased!