How to Buy a Car

Discussion in 'Fred's House of Pancakes' started by GrGramps, Jan 29, 2009.

  1. GrGramps

    GrGramps Active Member

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    I'm sure some of you could have written this article, but as many, or more will benefit from this advice. I thought of putting this in "Fuel Economy" since there may be more to save with a wise purchase than with "pulse and glide."
    I haven't posted enough times to give you a link, but you can find it if you go to CNN, Living and look for cheaper cars.

    Perhaps some else will post the link?

    Roy
     
  2. moxiequz

    moxiequz Weirdo Social Outcast

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  3. malorn

    malorn Senior Member

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    If you want the best deal on a car purchase develop a relationship with a dealer and a salesperson. When it is time to buy, do your research on the vehicle to be purchased and on your trade and interest rates. Go see your salesperson/dealer offer see what they offer you and compare it to what your research says you should pay and do the deal. I always wonder why people drive to 10 dealerships and waste literally several days buying a car? all dealers pay the same for the cars.

    It is amazing guys like the writer of the article can keep a job giving advice.
     
  4. RobH

    RobH Senior Member

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    Don't you sales types call this "barefoot"? Just pay the first amount mentioned?

    These days there could easily be a $3000 difference between barefoot and the best available deal.

    One way to get a decent deal is to check out the Costco price for a vehicle. Take a few hundred off that deal, and ask a non-Costco dealer if he'll beat that price. Costco gets a placement fee, so there's some room to bargain here. If he meets that deal, take another hundred off that offer and go on to another dealer. When you can no longer get a better price, you've found the local best price for the car. Go offer that amount to the salesperson you liked the best.

    Don't bother dealing with a salesperson who has to ask his boss if he can meet a particular price. If they double-team you, just leave (they're just playing a sport, with you as pigeon).

    If you establish first contact through the internet, the dealer is already on notice that you're shopping for a good deal. There's probably an "internet" or "fleet" salesperson, and they frequently offer a better deal than the other salespeople. But don't expect an extensive presentation. Just identify what you want, and the price point that you expect. Never just ask for the best price, because that identifies that you don't know what it would be. Name a price, and watch the reaction.

    Once when I was shopping for a deal on a Sunday, the salesman quickly took me away from several other shoppers nearby. He said that we could make a deal, but I'd have to come back during the week. He didn't want to let the other shoppers know that there was a better deal available on Tuesday than on Sunday.

    Note also that the salesperson is just the first stage of the process. After you think you've made a deal, you go to the guy in finance. He's another salesman, and his job is to sell you an extended warranty. Maybe he can shift you from the financing that you wanted to something more profitable. The high tech, reliable vehicle that the salesperson just sold you on is suddenly a failure prone risky device that needs insurance. Maybe a prepaid service agreement? Nothing this guy offers is a good deal, but it's his job. Just politely turn down each extra, and try to shift the topic to the weather, his kids, politics, whatever. Maybe they're getting your car ready, and maybe that's just an excuse for him to get his shot at charging you more.

    If you want a good deal, the Costco (and similar) plan is the easiest way. But you can do much better by learning the market and playing a number of dealers against each other. Just remember that they're experts, and you're an amateur learning the ropes...
     
  5. patsparks

    patsparks An Aussie perspective

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    I got my Prius used, there were 3 in car yards within 200 metres of each other, I soon learnt they were all owned by Adtrans Pty Ltd, a national car retailer. I compared the 3 cars and decided the black one was out, the paint was a mess and black cars are a pain.

    I then test drove each of the other 2 cars, one I liked to feel of more than the other but I didn't let that out, I then walked up and down the road for about 40 minutes negotiating, the question I put to the sales guy was, "what is your best price?"
    Each in turn gave a price a little less than the price of the other dealer. Once I had the price of my preferred car $2500 less than on the window with a resprayed bonnet, a rattle in the left front shocker fixed and the price included all out the door and on road costs I signed. I thought a pretty good return for less than an hours work.
    I also got finance at 1% less than my mortgage through the dealer! I didn't trade in my car, I sold it privately, it would have complicated negotiations, I also hadn't taken the time to detail it.

    When you are trading a car in always detail it first. You will get more for a very clean car. That's why car yards detail cars.
     
  6. daniel

    daniel Cat Lovers Against the Bomb

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    But not all dealers charge the same. And not all dealers treat you the same after the sale. I'm sure you offer the lowest prices in town, and treat your customers like VIPs after the sale, and always give them a loaner when they come in for service. But not all dealers are as nice as you, so shopping around makes sense.
     
  7. malorn

    malorn Senior Member

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    A dealer like me has a vested interest in keeping customers,60-75% of all of our sales are repeat and referral and we continually have great csi. I have people cry in our showrooms who went down for the "deal" and have no idea what they ended up with. Do you really think I am going to charge someone $3,000 more and think I will keep that customer?
     
  8. Dave_PH

    Dave_PH New Member

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    Time, the price goes down after you walk out and they call a few days later.

    Also, let them know you're looking at the same car from other dealers.
     
  9. bedrock8x

    bedrock8x Senior Member

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    The one will go for your deal didn't check with other dealers like you said and didn't know you charge him $3000 more.

    All dealers play the same trick.


     
  10. Scummer

    Scummer Eh?

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    I negotiated with 4 dealers until I found my Prius at a dealer who was willing to sell at 250$ over invoice. All others were merely taking 500$ off MSRP. So it does pay to negotiate between dealers and trying to get the best price.

    Since I don't take my cars in for service, I do all the work on my cars myself I don't really care what the relationship is afterward.
     
  11. malorn

    malorn Senior Member

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    Nobody makes $3,000/ per new vehicles sale, i don;t even think Lexus does on the average
     
  12. bedrock8x

    bedrock8x Senior Member

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    A few years back, one of my co-worker bought a new $28K MSRP GMC truck through his brother who works for GM at $16K. Note that this is the real "employee pricing" not the ones advertised on TV. He sold it a few months later to make a profit.

    You can figure out how much a dealer would make if sold at MSRP.


     
  13. malorn

    malorn Senior Member

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    MSRP =$28,000
    Invoice=$26,500(roughly)
    GMS=$25,600(roughly)
    If he said he bought it for $16,000 it was probably $16,900
    If it was $16,900 the incentives would have been $8,700
    GM pays the dealer 5% of MSRP less freight on all GMS deals so about $1,365 figuring about $600 for freight. Note:The average front end gross went up on GM vehicles during the GMS event in 2005. If the dealer sold it at MSRP he/she would make about $1,500 plus $822 holdback on the front end. Do you know how many deals are sold at MSRP? Most deals are sold around invoice, so the dealer makes the holdback(usually paid to the dealer qtrly) which is 3% of MSRP less freight.
     
  14. Dave_PH

    Dave_PH New Member

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    It's a shame we can't but them directly from the maufacturer's on the intertubes and skip all the absurd theater with the salespeople.......'let me go to bat with my boss for you on that price, I really want you to have this car'
     
  15. malorn

    malorn Senior Member

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    They would sell about half as many. wholesale is wholesale and retail is retail.
     
  16. GrGramps

    GrGramps Active Member

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    I have heard many friends say, "I hate buying a car". Further conversation reveals they really mean that they hate negotiating and they are convinced that they'll pay too much if they don't. It's interesting that in many countries, one is expected to negotiate and some vendors would be insulted if you didn't. I believe that in the US some have the idea that they will appear "cheap" if they bargain.

    I just made a list and found that I have bought 15 cars during this lifetime, and all but 3 were new cars. It didn't take me long to learn that bargaining could save money for other things. I got to the point where I considered negotiating was equal to earning hundreds of dollars per hour or more, and no tax withheld! Having retired 16 years ago, I can assure you I never reached that level of pay.

    Roy
     
  17. malorn

    malorn Senior Member

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    I heard a program on NPr around Christmas time and it was about the "horsetrading" involved in buying and selling cars. IF you are in the business it was an enjoyable show. There is about 10-20% of the customers that love negotiating, to them it is an artform.
     
  18. Dave_PH

    Dave_PH New Member

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    I translate "I hate buying a car" to "I hate dealing with an idot whose is going to use transparent and time wasting sales techiques".
     
  19. malorn

    malorn Senior Member

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    Do you have any idea how many times I have been lied to by customers over the years? i would like to ahve $100 for every time my stores have looked at a trade in where the service light has been magic-markered over, or has been duct-taped over? Or someone brings a hail-damaged car in the rain or the snow? Or someone takes off the tires that the vehicle had when appraised, or they remove the radio etc and on and on. I could write a book.
     
  20. Dave_PH

    Dave_PH New Member

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    Oh that's good. I've got to remember that in case I ever need it