How do you handle the car buying experience? ) (2/26/2021)

Hate it!  Exhausting and you know you always get it in the end.  😀 😩 

Use to go to my CU with my choice of vehicle,they got me a fare price and all I did was go down to the dealership and sign one paper collect the keys and leave. 

Loved the experience!

@larry-kemling, that's really a good way to buy a car. As a dealer, I always welcomed credit unions and manufacturer employee discounts. They were quick and easy deals.

Reprinted from the post on colors and the mention of paying someone $500 to negotiate a deal for you. 

@ed-glorius, @jackdodds, those are generous! The problem is that there are a lot of cars out there that don't have the markup to justify those types of fees. At the advertised prices of most new cars and with the advent of internet competition, many new cars are just not that profitable for a dealer. Hire the guy for $500 and watch him get a $300 discount on your new Corolla. 

The fact is that there are a lot of variables in buying a new car. Here are some of the things that will help you make a better deal

• How long has the vehicle been in the dealer's inventory? You can usually tell by the inspection sticker, if it has one. The cars have to be inspected before they're on the lot. If the car you're looking at is over 40 days old, the dealer is now paying curtailments to the bank and will be eager to move it...if the Sales Manager is worth his salt. If it is months old, it's time to play hardball! That's how I got the deal on my Fiesta ST. It was a rural dealer and he had my car in stock for 14 months! The dealer lost money on that car but was unwilling to take a hit on the new Lime Green one he had in stock for only two weeks. 
• How popular is the model? If it's hot, the chances of getting a deal are almost nil. Try negotiating on a Honda Odyssey or a Toyota Sienna, or a Hyundai Palisades and see how far you get. Most dealers have precious few of this type of unit in stock. They're hard to get from the manufacturer and the dealer will make his profit from them. Some dealers will mark them up over the MSRP. I've always found it amusing that people get so indignant over this. For some reason, it's perfectly fine for most folks to demand a discount from MSRP, "I'm not paying that!" but get all out of shape when the dealer says, "I'm not selling it for that!" For every hot model a dealer has, he probably has fifty other models in stock that to be marked down in order to stay competitive. 
• Smaller vehicles with lower MSRP's have less markup. Some small cars have only a few hundred dollars profit. So, there's not much room to negotiate. 
• Used cars always have far more room to negotiate. But the same rules apply. Check the inspection sticker and determine how popular this vehicle is on the used market. Several years ago, I bought an Altima with the V6 and a manual shift. I got a really great deal because it had been on the dealer's lot for 6 months. I check in the glove box and saw that my dealer had received the car from another dealer in his franchise. They couldn't sell it either. Why? In our area, manuals are a hard sell because of the commute times in the DC area. After my test drive and after seeing the inspection sticker, I sat down with the salesman and said, "I'm the guy you've been waiting 6 months for! But this is not going to be easy." Once we made the deal, I shook the sales manager's hand and said, "Tomorrow morning, when the owner calls and asks, 'Did you sell the Altima?' you're going to be a hero.' He said, "You're right!"

These guidelines are general. I know, everyone knows a guy that can get cars and trucks at invoice and we all know someone who got a better deal on some particular vehicle or another. But there are a lot of myths about the business that simply aren't true. Almost all new car dealers make their money, not from new vehicle sales, but from used vehicles and the service/parts department. A body shop is golden as a profit center. 

If any of you ever want input on a deal, I can help via email or a chat.

I always go the last day of the month (or year), always pay cash & always low-ball my offer...then let them wiggle around for a while while I say "No" to their every counter offer until they get close enough to my original offer that it's worth settling...if that doesn't work, I walk (they're more inclined to work with you once they know you'll walk out - to them, anything's better than losing a customer).  Also, I know that they can sell a vehicle at least $10K under its price tag & still make a healthy profit, so I don't give in easily...

Great topic!

I just about always factory-order my cars. I want it equipped EXACTLY to my specifications. I always buy American so it's easy to do, and get delivery in a reasonable time frame. 

I also believe that "everybody's gotta make a living". I want the salesman to make a decent commission, the dealership owner to make a reasonable profit, and I want to pay a fair price. My experience is that buying the car at "invoice" (less any manufacturer rebates), which is very easy to find on the internet, works for all parties involved. The dealership gets a "holdback", floor plan assistance, etc. from the manufacturer that all goes to them.

I order the car at the agreed-upon invoice price, give a $500 deposit, wait for the call that the car is in, work out the financing, give my salesman a Starbucks gift card, and drive away from the dealership in my new car with everyone involved in the deal happy!

@moe-parr, that's a great way to do it. The dealer makes his holdback, which is designed to help him with his floorplan expenses should the car take 40 days or more to sell, and gets an easy delivery. Another benefit to the dealer is that he gets a "zero days in stock" for future allocations. Manufacturers will give you more vehicles to sell when they see a dealer moving the inventory they have quickly. With your way of dealing, everyone makes out well.

Terry, it sounds like you're a good negotiator. But, I have to admit, Out of the thousands of cars I've signed off on, I've never sold a car that had ten thousand dollars of markup. Some of the more expensive cars, top-of-the-line Mercedes, BMW's, and such may have that kind of room. But the market is far too competitive for a dealer to try and make that kind of money. Nonetheless, it sounds like you've made some pretty good deals. Going on the last day of the month is a VERY good move. Saturday is also a very good day to shop. On Saturday, the manager is trying to make his week. On the last day of the month, he's trying to make his month. Rotten weather is also a good time. 

As far as paying cash is concerned, that was once the norm. Now, a dealer would much rather you get your financing through his business office. He doesn't make much on the new car sale but he does make some, usually a point or so, by writing the contract. The bank allows him to make up the interest rate (just a little, never a lot) and keep the difference. 

I haven't bought a new car since 2002.  I did some research back then and learned that you negotiate from net dealer cost on up, not from MSRP on down.  I also got my financing all set beforehand.  I learned the amounts of holdback, customer rebates, dealer incentives, etc. and subtracted those from the invoice.  I negotiated up from there.  The dealer accept my third offer which was still under invoice and included a fair profit for the dealer.  I also dealt with the internet/fleet sales manager, who handled the entire transaction without turning me over to an F&I guy.  He also didn't push profitable dealer add-ons.  He offered them once, I declined and that was it.  I also had a trade-in which we dealt with separately after settling on the price of the new car.  We closed the deal in less that one hour.  That said, it all depends on the popularity of the particular vehicle you are purchasing.  

Our credit union steered me to Enterprise Car Sales (subsidiary of Enterprise Car Rentals) with the promise of a very low interest rate, if I financed. It was so low that I make more on interest and investment than their rate. The surprise was that Enterprise has a bit of everything, from sedans to SUV's, and low end to very well-equipped models. They will certify some percentage of their stock, indicating that the car has a clean history with no major accident or mechanical issues, plus it's well sorted when one takes ownership. I've normally bought 2 year old higher end cars and have also traded a car purchased from them in the past. They're not the least expensive option but are competitive and the cars are very nice. One purchase had what appeared to be a smear on the windshield that turned out to be  a scratch. In that the car was certified, they replaced the windshield without any hassle. Another purchase required new tires after less than 10,000 miles of driving. It, too, was certified and the sales manager contributed a couple of hundred dollars to the replacement tires. The buying experience is cordial with no pressure to buy. Frequently, someone else was waiting to buy the car if I passed. Not cheap but predictable and the overall cost is less than hassling and less competitive financing. 

Posted by: @jkuvakas

Terry, it sounds like you're a good negotiator. But, I have to admit, out of the thousands of cars I've signed off on, I've never sold a car that had ten thousand dollars of markup.

I was approaching that from the commercials I see on TV where there's anywhere from $5K - $15K "savings" incentives for the buyer...that strongly suggests that the "actual" price of the vehicle is very high, otherwise where are they coming up with all those "savings" for the buyer? I recently saw a Ram truck commercial offering $12K off the price...I know they're "magically" inflating the price just to give you that discount...

Posted by: @jkuvakas

As far as paying cash is concerned...

I pay cash to avoid the interest & the monthly car payment - it's comforting to walk out of the dealership knowing that the car IMMEDIATELY belongs to you...

Love it... I'm a MASTER at it (if I may be ever so humble)....and I have written about it.  The only way to get a better deal than I do is to use a gun!  Also, let's not forget... 99% of ALL NEW VEHICLES (regardless of make or model) are TERRIBLE investments.  "Business 101"  .... You finance items that appreciate; you pay cash for items that depreciate. You will NEVER totally beat a dealership (whether cash or finance) unless you have that gun.  If you do your homework, really study and stay focused...you can walk out "less screwed" or "far less screwed" than the next guy.

@terryslekar, I know this can look strange to folks. But when you see a manufacturer offer $12K off the price of a car, it not the dealer's profits they're giving away. It is usually a combination of option package discounts, consumer rebates, and dealer rebates. This is where things get tricky. Kelly and I were shopping for a Mini that advertised $7,000 off MSRP. When we got to the dealer, there was a $4000 college student rebate and a $3000 Member of the Armed service rebate, neither of which we qualified for. I'm not saying all advertising is like this. But, as in any advertising, things may not be how they first seem. 

@terryslekar, you're wise. Cash is the way to go. But a lot of folks believe it to be a negotiating advantage when it's not. I always arrange to finance on my own or, like you, I pray cash.