Car purchase negotiation

[oneeightyseven]

I was wondering if anyone on here can tell me how much room there is for negotiations on a brand new vehicle? For conversations sake, let's assume the vehicle is 40,000$ and the money would be paid, in full, upfront. Given the economy and poor auto sales, how much would one realisitically lower the price on a new vehicle?

 

[Tck13]

There's typically less room (not much room at all) to negotiate when getting a new car as opposed to a used car unless the dealer is starting from a "jacked up" price. (MSRP, add ons, etc...)

Plus, depending on the car, a dealership might not budge from the sticker price. (This happens moreso with foreign cars which hold their value more than American cars. i.e. Honda, Toyota, etc.

When I worked for Honda and GM, I really wanted to sell new cars as there was much more money to be made. I'd make maybe $500 AT MOST on a new honda. And that was if the customer had no clue.

Also, there's no real benefit to paying cash for a car (for the dealership). Dealers make more money on the financing then selling the car for cash.

I'd suggest doing some research online and finding out what the dealer paid for the car and then finding out any and all rebates, dealer incentives, etc. and going from there.

One can't negotiate without knowing a price.

 

[Skydiver Nick]

Use this site - the holy grail for car deals http://townhall-talk.edmunds.com/WebX?14@@.ef17997

 

[gumercindo]

^^^

also, carbuyingtips.com is an excellent resource/

 

[Douglas]

You can't really answer this question generically. Different makers are offering so many different wonky things, and some cars and dealers are just going to be different than others. You really have to do your homework. Edmunds is a good place to start, as has been suggested.

Go to Edmunds, find out the dealer invoice price, and try to get that price less all current incentives (I think GM is offering like $2,500 off on many vehicles right now - go to the car's site to see the incentives). Call the dealer first and let him know that's your nugget and that you won't waste each others' time if he can't roll with that. Many will say things to try to get you in the door, but be clear and direct about your intentions and do not be swayed. These guys are slick.

Understand as well that a car negotiation is really like 5 negotiations in 1. If you get the sticker down, he'll sneak it into the next part of the negotiation - the interest rate, the trade-in value, or he'll sneakily leave off an option you wanted, or they'll sell you on the lifetime tires deal or something in with the F&I guy. So be aware that as you squeeze, you're squeezing a balloon. Be prepared to fight the battle again on another front.

It may help you in your case to not mention until the very end that you're paying cash. They'll think they've still got a place to make some money off you in financing, then you spring on them at the end that you're paying cash.

Also be prepared - they're going to slip in a ~$750 delivery charge and like $200 dealer fee at the end. Just have those in mind - I rarely see someone able to get these written out of the deal, unless they've already been raped by the initial negotiation.

 

[Lucky7]

Good points made so far. Just know what rebates/incentives are available in your area. Sometimes dealers will not disclose this information upfront.

 

[dragon8]

go to carsdirect.com and they will give the lowest price gauranteed and then take that price to the dealer.

 

[Tck13]

Originally Posted by Douglas

Understand as well that a car negotiation is really like 5 negotiations in 1. If you get the sticker down, he'll sneak it into the next part of the negotiation - the interest rate, the trade-in value, or he'll sneakily leave off an option you wanted, or they'll sell you on the lifetime tires deal or something in with the F&I guy. So be aware that as you squeeze, you're squeezing a balloon. Be prepared to fight the battle again on another front.

It may help you in your case to not mention until the very end that you're paying cash. They'll think they've still got a place to make some money off you in financing, then you spring on them at the end that you're paying cash.

Also be prepared - they're going to slip in a ~$750 delivery charge and like $200 dealer fee at the end. Just have those in mind - I rarely see someone able to get these written out of the deal, unless they've already been raped by the initial negotiation.



Just to point out (again) to the original poster:

As far as the bolded, never negotiate from the MSRP down. If you do, you've lost money already. You need to do your homework and negotiate from YOUR price or the dealer's price up.

As far as other charges (which are in bold), there ARE legitimate charges that dealer's must pay for the car. Dealerships typically don't OWN the cars that are sitting on the lot and they're paying interest on them. Also, trucking companies DO deliver the cars and it DOES cost money. The car dealership is there to make money, not go out of business so they pass these costs on to the consumer.

Also, don't be a jerk and just play the game. It may take a couple of visits to different car dealerships and some negotiating but you should be able to make a deal with someone in a reasonable amount of time.

It's a good time to buy a car right now.

 

[crazyquik]

Just buy used, avoid the dealer negotiation, and avoid the massive depreciation.

 

[nicewithit]

Never say you are paying cash until a price has been agreed upon. Also don't tell them you have a trade-in until the end either. If you tell them ahead they will play the numbers game with you and short you on one side. Deal with the new car price first then get the best price you can for the trade in, it also helps if you get a quote from another dealer for the trade in ie. carmax or whatever. Email several different dealers and only deal with the internet sales managers, they can you get much better deals then the floor salesmen. Let them know exactly what you want(make, color, and all options) and tell them to give you the best price they can(all fees included, destination fee etc.) It's important that you are clear them giving you the complete price as they might try and tack things on later<-- it happened to a friend of mine, they agreed on a great price and later tacked on a 800 destination fee, they later took it off after much arguing though. You'll get an idea of who is willing to work with you and email them back saying other dealers offered you so and so and see if they're willing to beat the other prices. Deal this a few times back and forth and get the best deal you can. My family and I have purchased many cars and the internet route has yielded the best results by far. Edit* just to be clear.... I'm not saying don't let them charge you a destination fee, I'm saying make sure they include that in the price they initially give you. I've personally never had a problem with that but my friend did so I'm just warning you. Like the other posters said, if they feel like they're giving you a good deal, they will try and get you somewhere else so just be clear with them what you're looking for.

 

[texas_jack]

Originally Posted by crazyquik

Just buy used, avoid the dealer negotiation, and avoid the massive depreciation.

+1

 

[Douglas]

Originally Posted by Tck13

As far as other charges (which are in bold), there ARE legitimate charges that dealer's must pay for the car. Dealerships typically don't OWN the cars that are sitting on the lot and they're paying interest on them. Also, trucking companies DO deliver the cars and it DOES cost money. The car dealership is there to make money, not go out of business so they pass these costs on to the consumer.

I know you weren't necessarily accusing me, but I didn't want to leave the impression that I'm a jerkoff - I do think that the dealer has a right to pay himself and I do know they have costs to cover, and certainly a delivery charge (and profit!) is legit. I just meant to imply that if you've gotten that waived, you've paid for it somewhere else, because it is a cost the dealer does have to cover.

We're all in a tough spot, dealers included, because of the way the pricing and incentives (for consumers, dealers, and manufacturers alike) on these things has gotten all fragmented and convoluted. All the more reason to have done your homework and come prepared.

 

[Douglas]

Originally Posted by crazyquik

Just buy used, avoid the dealer negotiation, and avoid the massive depreciation.

Meh.

In theory this can be a pretty good practice - I remember buying my 1996 M3 for $16K (in 2003 or so, with ~80K miles) and thinking what a great deal I got. That's not much money for what is very nearly a street-legal race car.

There are problems, though.

a) You never know what you're getting. Cars get into accidents, they haven't had the oil changed, etc. And pulling a carfax report isn't going to tell you everything. And not having the security blanket of a full warranty can be a pain **********. You can end up with expensive problems. I retired the M3 when the costs of fixing it started to be equivalent to a new car payment, without the creature comforts, and without the guarantee that something else was not about to go wrong. If you know how to fix basic problems, and if you really know how to look a car over to know if it's been cared for, it can turn out well for you, but even then you're rolling the dice.

b) This is important - In this market, the usual calculus is way out of kilter. On the used car side, many people aren't turning used cars in, so the supply is tighter than usual. Many of the cars you're seeing on used car lots these days are former rentals or other fleet cars - read: beat to **** by people who didn't care much about them. Used cars that are still running well are still being driven by their original owners, who don't feel the incentive to buy a new car in this down market. On the new car side, some of the dealers and manufacturers are so desperate that they're practically giving these cars away.

It's still a personal decision, but if there were ever a market where the used car route provides the least potential for value, this is it.

 

[sho'nuff]

Originally Posted by Douglas

Meh.

In theory this can be a pretty good practice - I remember buying my 1996 M3 for $16K (in 2003 or so, with ~80K miles) and thinking what a great deal I got. That's not much money for what is very nearly a street-legal race car.


nice. what happened to the car that made you think otherwise in hindsight?

 

[marin]

Originally Posted by nicewithit

Email several different dealers and only deal with the internet sales managers, they can you get much better deals then the floor salesmen.

+1 if you want to manage the sales process on your own

Originally Posted by dragon8

go to carsdirect.com and they will give the lowest price gauranteed and then take that price to the dealer.

My experiences with brokers (carsdirect and cartelligent) have been very positive. Another approach is auto purchase programs run by Costco, AAA, etc.