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Got a Quick Question for a Car Dealer?

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Comments

  • thanks for the advice and that does make sense to me to get the value of the trade up front because if they aren't willing to make a decent offer then there is no point in going forward to negotiate on the new car.
  • Great advice. Research is the key. A buyer should determine (1) the price they are willing to pay, (2) the value of the trade they would accept, and (3) the difference between the two. Keep that difference in mind and a good deal will be found, regardless of what tricks the dealer plays. Of course, it is usually good to have the trade valued on the high side as that saves a bit on sales tax.

    And, as always, a buyer should just say no to everything presented by the top gun sales person in the dealer's F&I office. A simple thing to remember is the F&I people have convinced themselves the only reason a person will not buy the products they offer is the buyer does not understand the value of those products. As a result the relentless F&I sales pitch complete with props all designed to convince the buyer to buy, buy, buy. To those sales people, the fact the products are vastly overpriced plays little part in a buyer's rejection.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,259
    Also great advice. Any sales presentation which is appealing to your emotions rather than your reason (aka "fear", worry, doubt, greed, status, etc) is to be viewed with suspicion.

    MODERATOR --Need help with anything? Click on my name!

  • I cringe when I see people on these forums who paid $1500 for GAP coverage. I am an insurance agent and it is literally less than 5% of that amount to add it to your insurance policy. I think some people are so beat down by the buying experience by the time they get to the F&I sales pitch they just give in. I have only bought two new cars in my life. One I financed and got the whole sales pitch. The other I paid cash and never saw the F&I room. I was amazed they didn't try to sell me all that fluff. They handed me the keys and I was like...that's it?

    As far as sales tax I believe in CA the sales tax is based upon price paid regardless of trade in. Argh.
  • steverstever Viva Las CrucesPosts: 41,261
    A reporter would like to speak to Sandy victims who lost a car in the storm and are trying to replace it. If this fits your description, please send your daytime contact info to pr@edmunds.com no later than Tuesday, November 20, 2012 at 9 a.m. PT/noon ET.

    Moderator
    Minivan fan. Feel free to message or email me - stever@edmunds.com.

  • qbrozenqbrozen Posts: 17,520
    edited November 2012
    Of course, it is usually good to have the trade valued on the high side as that saves a bit on sales tax.

    Well, not to pick nits, but just to be clear, as long as the difference is the same, the tax will be the same. So if I pay $20k for the new car and get $5k for my trade, I'll pay tax on $15k. If they only value my trade at $3k but I pay $18k for the new car, I still pay tax on $15k. This is in NJ. I'm not sure about other states.

    '13 Stang GT; '15 Fit; '98 Volvo S70; '14 Town&Country

  • jprocjproc Posts: 135
    same in Pa.Wonder what state he is refering to?
  • mikefm58mikefm58 Posts: 2,882
    Same here in Florida and my home state of NY. The only difference that makes a difference is the difference.
  • Thinking about it, we probably should be happy so many people purchase so many things in the F&I office at inflated prices. I suppose that allows those of us who say no to the F&I offerings achieve a better price on the vehicles we purchase. If dealers did not make so much back end profit, they might not be so willing to discount the front end selling price.
  • I've just started car shopping and I'm curious about how discount programs for friends/family/business partners work. I work for a very large company that has deals set up for us on a lot of car brands. I went to look at a Dodge Dart today, which could be covered under Affiliate Rewards (1% discount off factory invoice).

    If I assume the Edmunds True Market Value is accurate, it says I should expect to pay about 1.9% above invoice.

    1) Does Chrysler give an additional payment to the dealer when they sell me a vehicle under this program to help them recover some lost profit? Or is a few low/no profit sales part of doing business (of course there is still financing, dealer options, service, repairs, etc for them down the line).

    2) What about the salesperson? The guy who helped me out today seemed great. If I end up buying from him I would hope he earns a commission on the sale.

    I figure it's always good to understand people's financial motives in situations like this!

    Thanks
  • jprocjproc Posts: 135
    salesman always earn some money on a sale-how much depends on the total profit to the dealership-but the dealership will pay something to their employee
  • robr2robr2 BostonPosts: 7,901
    I bought an Explorer last year using the program they offer for shareholders. It was simple and painless. I found the car I wanted, called and asked if they would do X plan on it and arranged to buy it.

    The dealer is paid a fixed amount by Ford to process the sale. There's little time spent by the dealer and salesperson in negotiating. The sales counts towards their allocation. Other manufacturers do the same thing.

    If you are going to use one of these programs, you really should be up front about it and let the salesperson know. It's not fair to him/her to spend 4 hours with you on what might be a $50 commission.
  • verdugoverdugo Posts: 2,015
    Wonder what state he is refering to?

    Little late to the party, but he could've been talking about CA.

    If the new car is 20k and you get 2k for your trade in, you pay sales tax on 20k

    If the new car is 22k and you get 4k for your trade in, you pay sales tax on 22k.
  • brokedoodbrokedood Posts: 1
    edited December 2012
    Since I purchased this car I lost my job and now have a job that pays less. I need to downsize my car. I have a 2009 Lexus RX with 57k miles. Like the title says I still owe 16k on it, payments of $390/mo until mid 2016. The car is at least very reliable and I don't want to give that aspect up, but I realize there are many cheaper brands and vehicles I can buy that are reliable. I've read about trading in cars when you still owe money on them, but I still don't understand if I can come away in a better position than I am currently in. Basically, can I get a cheap new car or reliable used car and come out owing either 1) zero or 2) something minimal like $100/mo? Please explain how the transaction would work like I am a 6 year old.
  • stickguystickguy Posts: 14,934
    edited December 2012
    well, there are 2 things you could do. 1 is trade it in, and the other is sell it outright and look to buy something new.

    There is a real world trade in value thread here, so find that and get a better price idea, but running it through Edmunds appraiser, and assuming AWD and no options, it came out with ~20K trade in, and 22K private sale.

    using that, you should have some equity. But, not much. so you could in theory trade it in and cover a minimal DP and tax/fees, but you are still going to end up with a loan, and on anything new, most likely the same amount (though maybe spread out more) but on a much lower level car.

    basically, you would owe what you do today, but extend the payments out for another couple of years, but it would lower the payments now.

    Option 2, sell it. Private sale, or try a Carmax if you have one. Then take whatever equity you net (4-6K maybe) and buy something basic and used to tide you over. No, you won't be driving a fancy Lexus, but you could get away with no payment (and likely lower insurance).

    Really tough to say what you can net and what you can find. May not be as reliable of course.

    Another option of course, is cut back elsewhere (or get a part time 2nd job) to have the money to cover the loan.

    and the other choice for people with cash flow/DP issues that need reliable trans? Trade or sell, take the equity, and get a not too expensive girl with a killer lease deal. You might get some $ out of the deal, and into a lease for a lot lower price.

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • iontrapiontrap Posts: 138
    Where I work there is a program setup with a local Ford dealer offering us fleet/commercial pricing along with any incentives and rebates. Is fleet pricing a fixed % below invoice?
  • stickguystickguy Posts: 14,934
    yes. There are often different level plans (X, Y) for different groups (employees, vendors, etc.). But they are set up as a % of invoice.

    I have contacts at Subaru, and their VIP pricing IIRC was 2.5% below invoice, plus you get any incentives. And it was set up at corporate, so the dealer was just an order taker in this case.

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • Hello,

    What is my legal/moral responsibility when trading in an older car at Dealership and purchasing a new one there, to tell them of problems with car ?

    Do I just say that "you take it as is," or tell them that there is actually a small coolant leak ?
    I imagine they will ask, and/or there is some form regarding.

    It has 135,000 miles on it, a 2005, excellent condition other than this small leak. Would they just likely scrap it ? Hate to see someone buy it and then find out that the leak gets worse, or... ?

    Don't want to give them excuses for really minimizing what they give me for the car, but if it to be scrapped, no reason to tell them. If they will sell it, not sure how best to handle ?

    What should I tell them re leak, or not tell them ?

    Thoughts on ?

    Thanks,
    B.
  • robr2robr2 BostonPosts: 7,901
    If you are asking the question, I guess you're feeling a tinge of guilt. Would you want someone to sell you a car without telling you there is a little coolant leak?

    In any case, it's an 8 year old car with 135K. It's going right to auction on the next transporter out. Telling them there is a coolant leak probably isn't going to affect the value by much.

    Why not fix the coolant leak and sell it on Craigslist? Is it a hose or is it a head gasket?
  • stickguystickguy Posts: 14,934
    good question. A lot of people feel that there is a distinction between trading in and private sale. On a private sale, you should disclose something you know to be wrong that is not obvious to see (like say a broken taillight), but that dealers are pros, and it is up to them to inspect the car and offer accordingly. And something like a coolant leak should be readily apparent if they bother to look over the car.

    Now, a bad tranny that slips when warm, but you bring the car in cold after parking overnight around the corner? Well, that is bad form!

    but in any case, this car is going to be sent straight to auction, and they are going to offer you next to nothing assuming it has problems. So no, I would not tell them about it. If they ask directly no need to lie, but it is an old high mile car, so it is going to have some flaws!

    I do agree with Rob that you might want to have it fixed (depending on what it would cost) and sell privately, since depending on what it is, you might do considerably better. And if you don't want to bother, just note in the ad about the leak and let people decide for themselves.

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • can you please critique my negotiating strategy?

    I'm struggling with the idea of buying a new car b/c my old car still works, but it will probably start needing some work in 2013 (new brakes, etc). So I figure that some dealerships might be wanting to unload their remaining 2012 inventory tomorrow 12/31 at a good price so they can improve their end-of-year sales figures. So I was thinking of sending an email like this:

    "I am looking for a 2012 silver or gray [vehicle]. To be perfectly honest, I am hesitant about buying a new car because my current car works perfectly fine, so I will only purchase a new car if I can obtain one at a fire-sale price, and I figured 12/31/12 would be a good day to find a dealer who wants to unload a 2012 model.

    My zip code is 12345 for pricing calculations, and I will be paying cash for the car. Can you please provide me with an out the door quote today with your best offer?

    I am seeking price quotes from various dealers so please be sure to obtain authorization from your manager if required before quoting a price.

    I understand that you may not want to send offers via email to customers, but if you have a car that matches what I want, and you will be able to give me an exact price quote on the phone, then email me your phone number, and I will give you a call."

    or would something like this be better for the first paragraph:
    "I am looking for a 2012 silver or gray [vehicle]. I am prepared to pay cash TODAY, but I will ONLY purchase a new car if I can obtain one at a fire-sale price, and I figured 12/31/12 would be a good day to find a dealer who wants to unload a 2012 model."

    thoughts? thanks for your input :)
  • stickguystickguy Posts: 14,934
    too much extraneous stuff in the first email.

    first of all, are you planning to specify a specific car? Or just anything they happen to have? You really need (if you want to have a hope of actually getting a real quote) to have an exact car (or model) in mind.

    So, something like " I am willing to buy today a 2013 Accord EX in silver mist, which should have a MSRP of $23,456. I see stock # xyz on your website" "please supply your best price if I take it today, including all fees and taxes for an OTD price"

    and if you really want to do it, include your phone number.

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • stickguystickguy Posts: 14,934
    oh, if you really want the best price? Pick the car/dealer you want, and if they have the exact one in stock, go in an hour before they close, and tell them you can take it today if they give you a price you can't refuse.

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,259
    edited December 2012
    "fire sale" implies some drastically reduced price--less than the dealer paid for the car--and that ain't gonna happen EVER. Also leftover 2012s may no longer carry popular colors and options.

    And a "cash" sale is of no importance to a dealer, other than that he knows that you don't need financing so won't be a flake---but he'd rather sell you a car with financing.

    I agree with the others---short and sweet and what's your best price, I'm a ready buyer.

    MODERATOR --Need help with anything? Click on my name!

  • Hi stickguy,

    yes, I do have a specific model in mind. I guess I can't figure out how to communicate that I'm only going to buy a new car if I can get a really good price. I just figured that on 12/31/12, there may be some dealers that are willing to unload 2012 inventory for fire-sale prices...

    thanks for your help :)
  • stickguystickguy Posts: 14,934
    do you even know what the acceptable price is, or are you expecting to just decide when you hear it? If there is a price you want, and they have the right car in stock, make them an offer (especially effective if you are standing in the showroom with your checkbook!)

    you can also negotiate one sided if you want, and if the offer isn't good enough, just tell them to keep going lower!

    2013 Acura RDX (wife's) and 2007 Volvo S40 (mine)

  • Hi stickguy,
    Yes, I do have a target price in mind. I might just walk into the closest dealer an hour before closing and try your suggestion if my emails/calls earlier in the day don't get me where I want to be.

    thanks :)
  • robr2robr2 BostonPosts: 7,901
    I might just walk into the closest dealer an hour before closing and try your suggestion...

    And watch as the salesperson and sales manager both say, come back tomorrow.

    The dealership may have already hit it's goals for the month and having to deal with a sale and delivery the day before a holiday might be more of a hassle than the meager profit they are going to make.
  • kevinc5kevinc5 Posts: 204
    How did it turn out?
  • Yesterday afternoon I negotiated a price with which I was satisfied, and before driving out to the dealer, I asked the salesman to confirm that the car had 10 miles on it, as their website indicated. turns out it had 330 miles on it, so I balked.

    I walked into the closest dealer an hour before closing yesterday with my checkbook in hand and a print-out of a webpage advertising the sales price of my desired model at a dealer that, while not close by, is located where I'm planning to visit in 5 weeks. I asked the dealer to match that dealer's advertised price, and he said no. So maybe I'll buy from that dealer advertising a good price online...still have not decided.
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