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Comments
I just spent a couple hours reading up on past posts.
It is great to hear some behind the scenes story’s from Salesman.
I am interested in hearing their take on how I went about my purchase.
I did as much research as I could on the Internet.
I knew exactly what car I wanted, down to the color and options.
I even made an excel file that added everything up. It had the MSRP for everything I wanted (including all the Factory part numbers) and three other reputable places I could get the same accessories for less then MSRP. I didn’t need to be “sold” on the car, I was going to buy the car and was willing to wait for exactly what I wanted to come in. I made that known to the Salesmen.
I showed all four Salesman my complete list (even let them make a copy of it).
I was trading in a car and already had financing preapproved.
I did all the appraisals of my trade-in in one day.
The deal was they could write up the offer however they wanted. In the end the lowest loan would get my business. I told them all I would call them the next day after they researched the accessories and approved the deal with who ever they had to.
I said I would give them all two chances to make their deal.
I put up with no Salesman Speak. Meaning none of the “what will it take to get you to sign right now”. I remained professional and direct at all times. I invested no more then 1 hr of their time. It could have been a lot less time if they would have just given me the price with out the Sales Tactics. .
The next day I called them all and made my decision. I then called all of the others back to let them know I was going with another Dealer.
I thought this was the fairest way to do it.
After reading some of the posts here and seeing some of us consumers from the Salesman side I am not so sure.
It had the MSRP for everything I wanted (including all the Factory part numbers) and three other reputable places I could get the same accessories for less then MSRP
Unless the car is hot, you would have been better off working with invoice prices and incentives, and largely ignoring MSRP. Focusing on higher numbers leads to higher prices.
I didn’t need to be “sold” on the car, I was going to buy the car and was willing to wait for exactly what I wanted to come in. I made that known to the Salesmen.
Not a good move. Making your needs so specific only hands leverage to the sales team.
You should leave the dealer with the impression that you are willing to buy today if the deal works, BUT you are also willing to walk away and buy elsewhere, buy something else or buy nothing. Highly motivated buyers pay higher prices.
The deal was they could write up the offer however they wanted. In the end the lowest loan would get my business
Why on earth would you do this? Giving them that latitude allows for stuff to be sneaked in, that works against you. And while you should get the best loan terms possible, you should not present yourself as a payment buyer.
I...already had financing preapproved.
Smart move. Being preapproved gives you leverage in negotiating loan terms with F&I.
I remained professional and direct at all times. I invested no more then 1 hr of their time.
Being direct isn't always a good move, particularly when the other party isn't so candid with you. Don't give away information needlessly, that only helps the salesmen, not you.
As for the salesman's time, my job is not to manage their calendars. While I find my negotiations go quickly, I don't watch the clock -- being time conscious helps the salesperson, not you.
I then called all of the others back to let them know I was going with another Dealer. I thought this was the fairest way to do it.
Why? That wastes your time, and if you notify them before you've closed your intended deal, you'll have lost leverage if you need to go back to them with each of them having the knowledge that your first deal fell out. And letting all of them know with whom they're competing further weakens your position.
After reading some of the posts here and seeing some of us consumers from the Salesman side I am not so sure.
Don't worry about the salesmen, worry about your money, yourself and your family. Your first allegiance is to yourself, not to a car dealership.
I would encourage consumers like yourself to ignore the dealers' efforts to create ground rules for your behavior and to otherwise control you. Negotiate effectively, knowing that the money you save belongs to you.
Thanks for your pennies.(lol)
I don’t think I was able to get across all that went on.
The car is very hot, this was for a Honda Fit.
I ended up getting the car for MSRP. I got all the accessories for the lowest price I could find on my sheet and got $150 over KBB’s excellent condition price for my trade in.
I hate being “slimed” by Salesman just as much as anyone else. I knew exactly what I wanted and wanted only that. My needs were very specific, I was getting what I wanted or not buying anything. There was no other move to make.
I left the Dealers with the impression that I was buying the car the next day, which I was and did.
I had already walked away on the first day.
Doc Fee’s varied from $98 to $298 by writing it up however the wanted, I meant I get exactly the car and accessories I wanted, nothing else. There was no sneaking things in. They could charge whatever they wanted for Doc Fee’s, but would have to make it up to me on the price of the parts or the trade in. My total loan amount at the end of the deal is all that mattered not what the payments were going to be. It was the bottom line on the deal.
How does being direct help the salesman? I told them exactly what I wanted, they either made it happen or I left and they knew that.
When I called them back it was because I had closed the deal. I wanted them to leave me alone now, give up on all the call backs. How does that take away leverage? I can go back anytime and do this all over again and still walk away or buy the car.
“Negotiate effectively” that sounds a lot like being direct about what you want.
I was difinantly not controlled at all during this process. My problem was what I wanted was not on the lot or on the lot of any dealer in any state that touches mine.
I hope you don’t read any “tone” into this post. It is just me being direct.
For all intents and purposes, you shopped the OTD (out the door) price.....including accessories, trade value, financing, etc. As you correctly surmised, the different dealers could add anything (or nothing) in the way of fees they wanted. You were going to choose the one with the lowest overall price, regardless of how the dealership "juggled the numbers".
The FIT is indeed a "hot" car right now. You wanted one and were ready to buy. No need for gamesmanship on either end. You simply took the best overall deal you could find. Nothing wrong with that.
I'll give you the benefit of the doubt that you've done enough research to know this (I define "hot" as a car having relatively low inventories, i.e. below 20 days or so, as verified by a source such as Automotive News), but I wouldn't assume that a new model is necessarily "hot". I've bought cars that were new models, and still got them at a steep discount, because new models don't necessarily fly off the shelves as dealers might like us to believe.
They could charge whatever they wanted for Doc Fee’s, but would have to make it up to me on the price of the parts or the trade in.
If you are saying that you negotiated an OTD price, then fair enough, but I'd be sure that you aren't leaving money on the table in some other way. I would advise watching the line items on the write-up, as any opportunity to chip away at individual items allows for further price reductions.
“Negotiate effectively” that sounds a lot like being direct about what you want.
It depends what you're being direct about. It goes back to this -- the power of information is crucial to a negotiation, so you need to be sure that you don't give up the wrong info at the wrong time. The dealer isn't going to tell you everything he knows and wants, and there's no reason for you to do so, either.
If you were clear about your desired option packages, that may or may not help. It sounds as if you had a very specific car in mind, and your primary goal was to get that exact car.
I'd say that articulating that you have very specific wants typically results in higher prices, because the dealer realizes that once he has obtained this very specific dream car that you will be reluctant to keep looking. Even if I have very specific wants, I don't generally tell the dealer what they are. I find ways to look for what I want without communicating how badly I may want it.
We all know by now that Socal likes to pretend he's "James Bond" with all of his mystery and his "I Spy" techniques .... but somehow, he always seems to end up like Inspector Clouseau ..l.o.l... .... the best way to get a job done is to be be *upfront* ..
Dealers talk with hundreds of people a week and they hear every story there is .. so why put yourself through the Drama Class when there is no need for it and lose your credibility and have the dealer think you're like some of the "others".?
Most buyers (not all) come up with "my Dad used to be in the car business ..." ... "I read somewhere I can buy this one for $3,000 back of invoice" .. "that's not my bankruptcy showing on my credit report" ... ..or... ".. I'm a member of the PETA.." (which is a fine organization, but won't get ya a car bought) ...
You got pre-approved -- you knew what you wanted -- you knew the market -- you waited for your price -- and you bought it .. done deal ~ good job.!
..... or, you coulda done it Socals way .... worn your Batman decoder, put on your 3-D glasses, clicked your heels 3 times and told them you were waiting for a Kidney transplant ......
Terry.
I am eagerly awaiting Socal's response. I am certain there will be one.
nortsr
P.S. I love this topic.
I didn’t know socal pretended to be “James Bond”.
Next time, I think, I will have to bring more “equipment” and schedule an organ removal.
socal was the first to respond and kind of set the tone for the rest of them.
What I was looking for in my original post were responses from Sales People.
Meaning would they rather hear the stories, know up front I am buying and I am shopping around, or expect their awesome customer service to win the deal on the first visit.
I have to say I cringe every time I hear the words “what will it take to get you into this car today”. I heard it from all 4 of the places I shopped. Even after I told them what I was doing.
The place I ended up getting it on order at (I know socal, I just gave them more power over me) was the only place to come out of Salesman 101 and deal with me like a human and had a the lowest price. I did know the word's at the time, but I was looking for OTD price.
How are low inventories defined socal, I looked at Automotive News site briefly and couldn’t find these numbers.
You wrote “I define "hot" as a car having relatively low inventories, i.e. below 20 days or so, as verified by a source such as Automotive News), but I wouldn't assume that a new model is necessarily "hot".
I am not a member of that site, maybe that is why. Now that you mention it though, what is the Inventory for the Honda Fit. I have yet to see one (of the 5 I have seen) in my town that did not already have someone’s name on it. If that 20 days you spoke of means, if they stopped importing them for 20 days there would still be enough to cover the demand, then I think the Fit would make your definition of “Hot”. I am curious to see the real numbers.
That's just an arbitrary figure that Inspector Clouseau (Socal) likes to use ..and has nothing to do with the market (as in zero) or a dealers ordering system ..... dealers think 30/45/60 days in advance.
Think about it .... your boss has enough work for you for 20 days -- aahh, what about the rest of the month..? ..l.o.l... .. that means no sales for the next 10/20+ days depending on their allocation, maybe more .... that's kinda like Publics ordering bread and Coke for the next 20 days and hoping to keep their business with vanilla wafers for the rest of the month --- it don't work that way ...
In the meantime ... you were smart on your deal - you did fine, enjoy your new car.
Terry
PS: “what will it take to get you into that -golf club- today” ..... obviously you haven't shopping golf clubs lately ..l.o.l...
Unfortunately, you have to be a subscriber. But your local library may have a subscription, which will include that information.
The point of the inventory data is this -- most cars will go for something close to invoice if you haggle well, but some are too popular for you to get away with that. The inventory figure is based upon the number of units available, divided by demand, in order to arrive at a figure that expresses those inventories in terms of the number of days.
The car salesman can pretend that inventories don't matter (and they are lying if they claim that they don't, but does it surprise anyone to see a car salesperson lie to a customer?), but anyone who believes that supply and demand actually plays a role in product prices knows that understanding the association between average inventories and pricing will make sense. Industry average for domestics is often 60-90 days, somewhat less for your transplants and imports (Hondas are often available in 45 day supplies, for example.)
Add to this that dealerships usually "floorplan" their new car inventory (they don't actually pay invoice for cars, they borrow the invoice amount and pay interest and fees until the car is sold), and you can gather than a smart sales manager will prioritize selling older inventory, because financing costs are a drag on profit. Cars that move fast generate higher profits because they have lower financing costs, and that fast inventory turn gives the dealership a bit more breathing room to try to get a higher sales price.
Speaking of salespeople, I would be interested in seeing those who post on these topics to give actual advice as to how to get a better deal. I see lots of reasons provided that we should pay more and do as we're told, but not much that provides good counsel about how to cut a good deal. Ask them how to get the lowest price possible, and see whether you get a straight answer.
1st of all I want to thankyou for your tact in responding
to my attempt to simply let people know that they don't have to be afraid of the big bad salesman
In answer to your question, what other salespeople think of your approach to purchasing a vehicle,
I think you did a fantastic job!
I appreciate your fairness & professionalism!
Please allow me to offer some advice that may help you next time (& believe me when I tell you, people that have bought cars from me this way are my happiest customers)
-Calling around to different dealerships trying to get the best price:
seems logical in many other shopping
processes. but let me share something with you.
from San Francisco to New York City, every dealer payed the EXACT same price for the car. So what I tell my customers is to simply let me know where they want to be. they've done their research, they know what my invoice is, as long as they are willing to make it worth my time I'm will to make it worth theirs. This is not out of greed, the fact is, no matter what profession we are in, we are all trying to make money to support the ones we loved ones. Just so everyone knows, I have let people go when they call me insisting on buying the vehicle at "INVOICE" the last guy that called me with that attitude, I simply told him that unless he was willing to allow me to make a profit, it wasn't worth my time! "this isn't the SALVATION ARMY"
If he had been willing to be reasonable, I would have helped him find the right car at a price we both agreed was fair. we would have done it in a very short amount of time, & he would have walked away, a happy customer that would return again & again.
I cannot speak for other dealers, but I chose to work for this one because when we promise customer service, we can back it up we have received the highest award from toyota for out-standing customer service for 18 YEARS! No Other Dealership in our Entire Reigon has won it more than ONCE!
So, in closing, once again my compliments to you for your efforts to get a good deal & maintain integrity.
My advice in short is next time, to find the dealer your enjoy doing business with & bring them your research & allow them to help you & I promise you, you won't be dissapointed!
Warmest Regards,
Bullissalespro
"www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR2006060800966.html"
On the whole very positive.
Note the last comment under "Purse-strings note" in the side bar: "Some dealers are charging premiums on the Fit. They are operating under the illusion that Honda has no worthy competitors in the subcompact car category. They are absolutely wrong. If you do not wish to pay extra to honor their misconception, compare with the 2007 Toyota Yaris, Nissan Versa and Chevrolet Aveo."
So, sounds to me if you went with a dealer who gave you below MSRP, you probably did all right. There isn't a whole lot of mark-up on this car, so assuming you didn't pay any sort of premium or dealer-added markup, your deal was good enough.
Important thing is that you are happy with the deal, the car, and the dealership experience. If so, then you're fine.
This is how I read most of the posts here just speed reading every second or third word to see if they are interesting. It is just more effecient to cover a lot of material this way.
So I skimmed your post saw that Socal had replied and just hit my browser back button.
Not worth my time to respond to something he has responded to for a couple of reasons.
1. You did not use the approved Socal procedure so he was going to tear up your post in a very verbose way that really would not say much.
2. I am a salesperson anything I say is just plain wrong in certain posters eyes.
Life is just to short for me to bother with junk like that.
As long as you are happy with the deal you got then you did great. That is the important thing. I don't know even know how much markup there is in the Fit but it is so cheap their cannot be that much mark up so if you got any kind of discount or anything thrown in for free then I am sure you also did great by that measure as well.
Of course, a dealer who is trying to get you to overpay is going to chant that mantra. Ignorance is bliss, right?
If you paid $5,000 for a six pack of Budweiser, would it would be fair or accurate to tell you that everything is just fine, just so long as you're happy? Of course it wouldn't be -- if you paid that much, you paid too much.
The same process applies to cars. If you paid $26,000 for a car that you could have bought for $24,000, then you paid $2,000 too much, no matter how happy you may be about it.
This thread is dedicated to "Buying Tips", not "Create Greater Profits for the Dealer." I'd welcome feedback from the salespeople about how to get the very lowest price, but they seem awfully reluctant to do so.
The honda dealer near by me never seems to have any Fits and I can see a good bit of his lot as I drive by.
I stand by the, "if you got any kind of discount or something thrown in for free then you did good" statment.
“If you paid $5,000 for a six pack of Budweiser, would it would be fair or accurate to tell you that everything is just fine, just so long as you're happy? Of course it wouldn't be -- if you paid that much, you paid too much.”
With that comment you have lost my respect.
Your carspace link appears to be down or maybe it is I am not a friend and can’t see it. I tried to find out a small amount of info about where you may be coming from.
Here is my poke at sarcasm. Please don’t take it personal it is just to make a point.
If all the Budweiser breweries suddenly stopped making beer and started making Fresca, and your system could only tolerate Budweiser, then I am sure when the born on dates started expiring, their value to you would be a lot more. Maybe even over $5000 if it kept you regular. I am sorry to have had to go there, but it appears it is the only way to get thru to you. I challenge you to go into a Honda Dealership with your attitude and get any thing close to one of “your” deals. You won’t be able to get a Fit. There probably won’t be one on the lot, let along have a selection in the color or models you want. I see you turning on the charm and being allowed to purchase a “classic” Yugo for $50, after bargaining from $75. When if you had been polite or professional they would have given it to you because it was leaking oil on their lot.
I am all about getting the great deal. I pounce on ignorance. I don’t get to be clueless at my job. I am a Flight Engineer. I am required to remember a lot about my job and plane. I expect the same from people in customer serviceabout thier product. I am forced to walk out, ask for someone else or hang up regularly.
I know exactly where the dealer will make his money, one my trade. My vehicle is in excellent condition, well maintained and ready to sell. I could do it myself but it is not worth my time or stress.
I am very possessive of my car. I got some funny looks when the Dealers asked to test drive my trade in and I said sure and got in the passenger side for the ride. That car and keys were not leaving my sight.
I am currently trying to get some satisfaction from one of the dealers who did not get my business and continues to call and email me. Even after my phone call informing them I purchased elsewhere. I have emails from the Sales Manager and all. Now it is almost a challenge to see where this goes.
See I do have a darker side.
The best part about all of this is if one of the Dealers is reading this, I have not lost any credibility with them. I can go back to any one of them and they will know exactly where I stand. You would not be able to do this.
I know, you would not care what the Salesman thinks.
Try this one for a scenario: (the Salesman will have let me know if this would work)
Lets say you go to an established Dealer, deal with salesman who has worked there for a good amount of time and has a clue. They deal with you in an upfront manner and you get what you want. You get a fair deal (within 200 dollars 1% on $20,000) based on other dealerships. Then over the next three years you refer 6 of your friends to the same place. They all get treated well and get fair deals. They all drop your name. Next time you go back to buy a car do you think you will get a “great” deal? You may even be able to get one of those infamous “Below Invoice” deals I hear about.
Just so you know I am not a car dealer in disguise.
Not sure why that is. If somebody overpays for a product, meaning that the same product could be had for less, then one overpaid for it, no matter how happy or upset they may be about it. The salesmen here try to convince consumers that happiness is an indicator of a good price, when prices are good relative to the market.
My beer comment was directed to the car salesman about this well-trodden cliche, not to you in respect to your Fit purchase. As I stated earlier, if the car is hot at the moment (and it may be, I didn't research your car), then you might have had to pay near MSRP for it, and I wouldn't claim that you could get a deal near invoice.
That being said, I am pointing out that most cars can be had at low prices relatively to invoice, more so than many consumers may realize. If supplies are tight as compared to demand, then you will have to pay more. If people think that they have to pay sticker for an Accord, Camry or the average domestic, then they are under the wrong impression, but if they try to get a deal on a Solstice or a Prius, it will be very difficult. As to Fits, I don't know, as I've not researched them.
No.
Every time you buy a car, the dealer wants to get as much of your money as they can.
When they come in to buy there next car they are going to get a deal that most people could not get. We have one family that buys so many cars and reffers so many people to us that they actually got a discount on the Supercharged Range Rover we sold them. I don't remember how much it was but a couple of thousand at least.
This is on a car that no one can get cause they don't make any. The only one low mileage one that I have seen go through the auction went for over MSRP on the wholesale side.
Enough to the point where a few of us have simply lost interest here.
This discussion, and several others, are for getting the BEST deal in a car purchase...not a average or above average deal. And that is what socala4 has posted, information on how to get the best deal. His information and opinion are offered....not forced or pushed. The reader can freely choose whether to accept or reject his suggestions. Contrary to isell's viewpoint, I have found socala4's information to be substantial, and very helpful in understanding negotiation strategy in car purchases.
I have yet to read anything substantial from any of you on how Edmunds members can get the best car deal, which lowers your credibility in my book. How do you get a buyer to pull the trigger when they are reluctant? Besides bashing people who are trying to be helpful, do you guys have anything to contribute???
I'd be interested if the dealers would willingly provide solid advice for paying less, but they generally spend their time and effort telling consumers to pay more, while attacking others who actually help them to pay less. I don't blame you for wanting us to pay more -- that's how you make a living -- but is that a very good "tip" for a customer to follow?
If you guys want to have a boxing match go ahead.
What I will say is that I have two problems with Socal's methods.
Number one he talks down to everyone and number two any method that does not follow his method is rejected as inferior.
I might be incorrect in my readings of his post but that is how I interprut them.
quite frankly for most consumers the best deal would be found by using the Bobst method. to summarize...
Do your homework on the car you want, decide on a price you want to pay, pick out a car in stock your ready to buy NOW...but also be ready to walk out if they can't hit your number. Don't have bad credit and don't think your getting a $50,000 car for $200 month with $1000 down.
Beings that you are a salesperson I can understand how you may feel that way. But, I have disagreed with socala4 before, as well as he with me, and I have never felt he has talked down or been condesending in his posts. Actually, I feel they have all been just the opposite(IMO). He has gone out of his way to present his viewpoint in a nonthreatening manner. Gives the other guy some room to manuvuer to think about both sides. He is often attacked personally, but defends himself in a professional manner....without resorting in kind (minimal use of sarcasm). But, you gotta give the guy credit...he knows a lot about car sales and negotiation. Perhaps because he knows so much about the car industry and negotiation...this comes across as arrogance? Honestly, if I were a car salesman I wouldn't like what he was saying either. But, I truely think the man is just trying to be helpful to all the consumers out there.
Actually, a salesperson VS consumer discussion would be benefical and interesting for both sides if done properly.
Nothing wrong with salespeople trying to get the highest price...nothing wrong with consumers trying to get the lowest price. It's "how" it is done that can cause problems and distrust...for both sides.
I agree, but it's tough for those salespeople who bring in their control-the-customer methods to these discussions.
This shouting-down-the-reluctant-customer tactic was learned in their sales training, and you see these methods used on the showroom floor whenever their efforts to justify higher prices are rejected. The attempt by several of them to control these conversations, which includes attacking anyone who doesn't follow their way of thinking, is an integral part of the sales method that they use to sell cars.
So it is actually useful for consumers to get a glimpse of it here, it's good training for what you can expect when car shopping. The irony here is that whenever I point out that dealers use control-based methods to sell cars, the dealers deny it vociferously, all while trying to control the discussion. Rather than trying to dominate other posters, why not take the opportunity to post a compelling rebuttal, instead?
I think i've touched on it a couple times before but I'll lay it out straight for you:
If you want to get the best deal,
1. go to this web site & build out your car.
work with your salesperson because they will know EXACTLY
what options are on the vehicle (this will elimenate any argurments over discrepancy because you will be compairing "Apples to Apples".
2. when you have built your vehicle, make sure to click on the "a note about advertising fees" link at the final stage of the TMV price process.
again Elimanating discrepancy in the price (which can be as high as $1000.00)
3. print out your home-work & bring it in with you.
4.DO NOT CALL AROUND TO DIFFERENT DEALERS!
this is a waist of yours & everyone else's time.
every dealer from New York To SanFran payed the same price for that vehicle. Getting us to beat each others price when we all can come to the same figure if asked, again is a waist of your time.
5. Go to the dealer that you have done business with before, that you left happy & go to the same salesperson you had before- as SoCal mention in his sinical plan
this will develop a relationship, a friendship that will only benefit you long term. there are people that walk into our dealership every day that have been buying cars from our GM since he was a salesman. what kind a deal do you think they get from him?
6. Know your credit score, most dealerships have no problem giving you the special financing for that car if you qualify but I cannot speak for all of them.
7. Don't get yourself worked up over what interest rate the sales manager is figuring payments at. Why?
because when you sign that little work sheet you might notice that there isn't a % rate written on it. Thus you are not agreeing to a certain Rate only the price of the car & a payment NO MORE than what's written.
8. When you get in to sign the final papper work, listen to the products they have availalbe, yes some may be a bit over-priced but most are reasonable. If at any time you feel that you could get a better finance rate on your own, don't panic, Legaly you have 10 days to shopp around!
But then sometimes he makes a statement that just makes no sense at all. I mean maybe it comes from working high line sales which is very different then the "typical" car sales but I find a lot of his "expert" advice to be incorrect and just false in my situation.
A few points:
Invoice: Just for example people rarely come into this store talking about invoice. Although it does come up from time to time when a customer does mention invoice it is an obvious sign that they don't have much experience buying high line cars. I don't even know the invoice on most of these cars. I would have to go look it up cause if I just guessed I would probably miss by at least 1000 dollars.
Rebates: There are rarely rebates on our cars. Towards the end of the calender year there will typically be some rebates on LR3s and when Discos were sold new there were rebates on those as well. I think right now there might be some lease cash on full size Range Rovers since the 2007 MY range Rover is going to have a redesigned interior. As far as I remember that is the only rebate for Rovers around now.
Incentives: Again excluding the LR3 which is in a more competitive market segment there are not incentives on these cars in the form of subvened leases or special interest rates.
So while I agree a car that has substantial rebates on it should be had at near invoice minus rebate that does not apply to all vehicles. How do you define substantial as well? Is a substantial rebate 1000 dollars? I don't know maybe on a 20,000 dollar car but 1000 dollars on a 45,000 dollar car is not that much.
The one time I can think of a person that negotiated a deal based on a certain dollar amount over invoice for a LR3 turned out as not such a good deal for him. I had two customers that were buying essentially the same type of LR3 with essentialy the same KIT added on to it.
One of them offered a price of X amount over invoice. I said no we cannot do that but we will do Y amount over invoice. Then he wanted a ton of accessories put on the car. So I priced out all of the accessories gave him a price and he said yes.
He could have beat me up some on the price of the accessories and got a little better deal, would only have changed it by a few hundred dollars, but he did not. He already had his fabulous Y over invoice deal.
Second gentleman came in with a number of X plus his trade out the door. I knew the number he gave me was very do able so I was happy. Then he listed all of the accessories he wanted to be put on. This went on for two separate visits and one phone call. Instead of trying to decrease his original OTD number he just kept adding accessories. Every time I talked to him he added more stuff onto the car.
The last time he came in he added two more things and at the point I stopped him and said something along the lines of, "Ok Bill you got to give me the accessories catalogue cause I can't fit anymore stuff into your purchase price."
I tried to bump him off his original X price once and he stood by his guns and then added one more item to the accessories list. All in all it was very professionally done. He didn't seem like a jerk who was always trying to drop his OTD number he just kept adding stuff onto the car instead.
"Bill" got a much better deal then our first guy. He negotiated his trade separately from the new car which is actually how I prefer to do business anyway. He got all of the accessories he wanted which in the end totalled over 6,000 dollars and he paid cash for his car it was a very simple transaction on the paperwork side.
Moral of the story is instead of concentrating on a X above or below invoice price just get an OTD price you are happy with and stick with that price. If you realize later that maybe your OTD price was a little higher then it needed to be don't lower it just try and grab more free stuff without changing your OTD number.
I found "Bill's" method of negotiation very effective without being rude, condescending or any other negative adjective or adverb.
Every place I go their cars are priced WAY over edmunds (we are talking thousands of dollars). As soon as I bring up edmunds they all cringe and pretty much don't go anywhere from that point forward with me. They just end the deal and i'm left leaving the dealership.
The dealerships will print out KBB and printout a listing from cars.com to show me that other dealerships are asking the same prices and I should feel good about paying that price. I of course point out to them that while its nice that they have printed out this information for me it only tells me what the dealerships are asking and that KBB is suggested retail price not true market value.
I know they want to make money, its a business, but I am not willing to pay over fair market value for the car. They always play dumb and say, how do I know what cars are selling for in my area?? That is when I pull out my edmunds and I also use ebay (as almost all of the dealerships here use ebay to sell of their cars). They typically just go silent (I also do not give them any information about my trade-in, financing, what I do for a living, etc.). I am very friendly though and treat them with respect.
They just go dead silent and just get upset and say we just can't go that low, we have too much money tied up in that car. That would be below our cost.
We also live about an hour away from a large metropolitan area. The larger dealerships are selling the same cars for thousands and thousands less than our dealerships here (which are not exactly small ones either). For example, all the dealerships have these rental cars on their lots. The metro dealerships are selling them for 12k (asking price) but the other dealerships that may have one or two of them want 18k. When I tell them that they start in with the, "well those dealerships are just ripping you off, they are lying, etc." The funny part is that the metro dealerships are closer to Market Value listed on Edmunds if not under that price from time to time.
One dealership had THREE sales people on me trying to convince me that Edmunds was full of bull and there was no way any dealership could sell at Edmunds price (it was the sales person, his manager and the overall sales manager). I wouldn't budge from my position of not paying over edmunds. Needless to say I walked away from the dealership (and was not a happy camper at all after being trapped by three people telling me basically I was stupid to fall for the edmunds trap).
Another thing I have noticed. The dealerships around here are buying a TON of their used cars from the auctions. Not a lot of cars coming in from trades at all. Their lots also have the same cars sitting there for months and months (in fact one day we were driving through the lot and they had jumper boxes all over and cars with their hoods up).
So needless to say I am getting frustrated and need some help.
Did you make a firm offer?
For example, did you say something like, "I offer $25K OTD for that used Yugo over yonder."
Sales people talk a lot. The easiest way to find out what they will really do is to lay a firm offer on the table and see what happens.
A lot of useful tactics can be found on the "Purchasing Strategies" thread, but here are a few points re: used cars:
-I would personally not begin discussions by bringing up KBB or Edmunds, otherwise you just end up in a slugfest over the relative merits of KBB or Edmunds, which is really not the point.
You already know the numbers. Your goal is not to convince the dealership that Edmunds is a great source of info, but to get your deal at the right price, so focus on techniques that get you there. The word "Edmunds" need not even come up in order for that to happen.
Here's my suggestion:
-First, indulge the salesperson's goal of creating a "relationship" with you. Car sales methods are built around finding your hot buttons, then controlling the customer to push those hot buttons. Rather than put up a wall that they will attempt to steamroll, lead the salesperson along into thinking that you are good bait for a sale (but without overdoing it.) Don't try to look stupid or smart, but fair-to-middling and perhaps a bit naive. Consider it to be a platonic, business-oriented form of flirting, in which you toss breadcrumbs on the path to lead him in your direction, while letting him believe that he is controlling the process.
-Use the time on the lot to create commitment to the deal from the salesperson. If you spend two minutes with the salesman before dickering over money, then it is easy to let you walk, but spend a fair bit of time letting him build his relationship, and the sales guy suddenly has a lot to lose by letting you walk. (His goal is to turn his previous time investment into a commission, so the more time he spends, the more he'll work to close you.)
-After you've spent some time relationship building, begin the haggle by letting the salesperson name the first price (and hopefully the second price, too.) The other aforementioned thread provides some methods and links to other websites that offer some advice about how to accomplish this. Don't let him just get away with pointing at the window sticker, make him give you a lower price or two than that.
-When negotiating your prices, try to avoid using KBB and Edmunds as a justification for your pricing. It's better to say "that's too much", "I can't afford that", "Dealer X is advertising it for Price Y", etc., etc., etc. than it is to pull out those numbers, at least right away.
The key here is to let the salesman have so much invested in your deal that losing you becomes important to him, and to negotiate numbers without going into long, dramatic explanations as to why your number makes sense. And play the naivete card to your advantage -- instead of waving KBB printouts in the office, just hang on to a lower price by whatever means.
And then don't forget to "nibble" at the end. (The other thread will explain this as well.)
Although he won't confirm this, his username would indicate he's from So. Calif. If so, that explains a lot.
I too, am from there and that market is a miserable snakepit.
I suspect he is a former salesperson who worked for a slimy dealer down there and I'm sure if I were in his position I would be giving the same advise.
But, I could be wrong.
That sounds like a grudging admission that you know that my points are accurate.
But no, I wasn't in car sales. Your business isn't really all that difficult to learn, it's pretty easy for anyone wiht a business background who understands inventory management and leverage (financing) to figure out.
his username would indicate he's from So. Calif. If so, that explains a lot.
It doesn't really matter, car sales and negotiation tactics are about the same whereever you go in the US (and even abroad, for that matter.)
You continually try to claim that Southern California is a unique market in an effort to convince consumers of your way of thinking, but there really isn't any difference. Dealers use the same tactics all over the country, and invoice, holdback and incentive data is available across the US.
On the Purchasing Strategies thread, some of us helped consumers to save money without even knowing where they were buying their cars, because it just doesn't matter. The area code may be different, but otherwise, it's the same old, same old.
You can't take everything you read in any guide as gospel.
That car may be overpriced according to Edmunds but it may be a car that the dealer knows will sell quickly for a higher price based on supply and demand. Personally, I find the Edmunds prices to be fairly accurate in most cases. A high damand low mile car can be an exception
I don't think you were "stupid", but you walked out without a car. That car may get snapped up the next day by someone who feels it's worth the price or it could still be sitting there a month from now?
If this happens, that dealer may wish they had accepted your offer.
It's just not that black and white.
this is a waist of yours & everyone else's time.
every dealer from New York To SanFran payed the same price for that vehicle. Getting us to beat each others price when we all can come to the same figure if asked, again is a waist of your time.
Some dealers just *aren't* willing to come down to that lowest price, though; especially if you're in a situation where not every dealer has the particular car you're looking at. That's what the calling around process is all about.
Also, the calling around process helps with the whole customer service aspect of things. If you can't get through to someone to *sell* you a car, how easy will it be to get hold of someone later?
Calling around, if you have the time, is a perfectly reasonable thing to do.
One is low mileage cherry cars becasue they deduct too much value.
The second is high mileage cherry cars because they deduct too much value.
Stuff in the middle they do ok on.
" your business isn't realy all that difficult to learn"
Really? I think this is the attitude that british rover was talking about.
I'm done with you too...wait! I said that before! Shame on me!
They treated you well, you received good value from your trade in, you gave business to a neighbor...
Sounds like a win-win to me!
Life is short...enjoy!
Why is that? Lower volume doesn't allow for sales close to invoice on high line?
Then he listed all the accessories he wanted put on.
How did he go about this and what terminology did he use without becoming offensive? I would think that after the first or second time of asking that additional accessories get thrown in, you would be getting perturbed with him.
If you realize later that maybe your OTD price was a little higher than it needed to be don't lower it just try and grab more free stuff without changing your OTD number.
Good advice on negotiation. I take it the typical Range Rover buyer usually loads up on accessories?
My last 2 car purchases were an "OTD", which goes against "getting the best deal" princples...but is more suited to my personality and style.
Really?
If the business is so complex as to mystify us mere mortals, then why not just cut the suspense and explain it to us?
I think that over the last several weeks, I've explained it fairly well, generally in layman's terms. But if you take issue with any of it, I would like you to itemize, in detail, what I've said that's incorrect.
If you believe that I've made factual errors and you can educate the readers and me about them, then more power to you -- teach us all about it, I'm happy to learn. But if all you're going to do is resort to the usual namecalling, then it will be pretty obvious that you make personal attacks because you feel threatened, not because you're right.
It doesn't really matter, car sales and negotiation tactics are about the same whereever you go in the US (and even abroad, for that matter.)
You continually try to claim that Southern California is a unique market in an effort to convince consumers of your way of thinking, but there really isn't any difference. Dealers use the same tactics all over the country, and invoice, holdback and incentive data is available across the US.
Wrong. I have sold cars in SO Cal and I sell cars here in Dallas. The interaction with customers is far more enjoyable and trustworthy. (meaning that we each keep our word) I can show invoice here and I do not get asked where the real one is. We can agree on a price and on the next day the customer will not try to renegotiate or go down the road for a 100 better deal. The tactics are different in so cal, because the dealers are slimy and the customers are slimy too. Here in the South, there is more emphasis on morals ethics and manners and your word means everything. Yes there are [non-permissible content removed] dealers here and [non-permissible content removed] customers here also, but not EVEN on the same scale.
As for calling other dealers. I am all for calling around and getting a feel for who is going to treat you right and get you the best price. The way to get a prompt call back and a better deal is not preface the call by saying "I am calling everyone in town and whoever sells the car the cheapest, I am going to buy it." First of all, my dealer is not the cheapest in town. Second of all I am not going to waste my talent, and my time schlepping around my lot looking for a car in the heat,and do all the legwork so some other weak salesperson gets the sale by beating my price by $200. Thanks I will pass
So it sounds as if the buyers are more friendly, but how does that get me a lower price? From my vantage point, the basic goal of getting a low price remains the same, and the methods and information sources are essentially the same.
I've done business in the South, and while there are some modest differences in terms of etiquette and style, the basic methods and practices don't differ. We all have our agendas and goals, just the same.
7. Don't get yourself worked up over what interest rate the sales manager is figuring payments at. Why?
because when you sign that little work sheet you might notice that there isn't a % rate written on it. Thus you are not agreeing to a certain Rate only the price of the car & a payment NO MORE than what's written.
Sure, $20,000 vehicle price, no more than $500/month payments. For 120 months. Who cares about the interest rate?
Focusing on payments, rather than purchase price and terms, is a recipe for overpaying. There are lots of ways for a dealer to lower a monthly payment that do not involve improving the terms for the buyer:
-Increasing the required down payment
-Extending the length of the loan term
-Giving you less car for your money
Imagine this: You buy a car for $20k, putting down $4k in trade or cash, and borrowing $16k.
Dealer comes along and drops a payment on you of $486.75 per month. You panic with an Ohmigawd!, at which point the dealer works his magic and calculator, and makes you happy by offering a much lower payment of $324.42 per month. You breathe a sigh of relief, thank the dealer for his good work, and sign the paperwork.
Not so fast: You've just been played. Here is the difference in these two loans:
-The first loan was based upon a 6% interest rate and a 36 month term. Your total payments over the life of the deal would have been $17,523.
-The second loan had a higher interest rate of 8%, for a period of 60 months. You end up with 24 more payments than you would have otherwise had, and made total payments of $19,466, almost $2,000 more than with the first deal. Not only did you get stuck with two more years of payments, but you got hit with a higher interest rate with the same deal.
A better approach for the customer would be to:
-First, negotiate the best purchase price that you can get. Every dollar that the purchase price is reduced is a dollar that you don't need to pay or borrow.
-Next, if trading, negotiate the best trade-in value that you can get. Don't let the deal try to blend this deal into your new car purchase, keep it seperate and put it second so that you get the very most that you can.
-Finally, be pre-approved, and negotiate the very lowest interest rate that you can get for a given loan term. Having preapproval will give you more leverage, and help to encourage the dealer to give you a lower rate.
Remember, monthly payments are calculated based upon (a) the amount that you borrow, (b) the term of the loan and (c) the interest rate. Therefore, if you borrow less money and get a lower interest rate, your monthly payment automatically goes down. Focusing on payments is a surefire recipe for paying too much, on loan terms that are probably worse than you could have otherwise negotiated.
You're confusing "difficult" and "complicated".
Commissioned sales is one of the most difficult jobs in the world. Any other job, you can study, and train, and practice, and eventually you'll learn everything inside and out, and be an expert, and, with luck, make a living. For a sales job, you can be spot-on with your knowledge, but if you don't have the personality for the job, if the customers aren't there, or even if you encounter the same customer at a bad time, all your skill avails you not at all.
It's not a complicated job: find out what they want, sell it to them. But there's no such thing as an easy job that involves working directly to people.
Sales and stand-up comedy have to be the two most unforgiving professions out there.
(That said, there are certain skills and abilities that make that sort of job much easier, and you really have to *want* to be doing the job. But even with perfect memory, the gift of casual schmooze and doing what you want, it's still a tough job.)
On the other hand, some people are willing to pay that premium for having more money available on a monthly basis, and to insure that if something goes wrong with their personal finances, their car will be one fewer thing to worry about.
Never get a loan payment that's longer than the length you plan on keeping the car, though.
You are absolutely correct about that, and I've acknowledged that in some of these other threads. Anyone who can make a good living without a salary deserves some credit for resourcefulness and talent.
However, my comment was in response to the dealers who seem think to think that the car sales business is so complex that no consumer could possibly comprehend the mechanics of it, which leads to their argument that we had just better keep our little ideas to ourselves.
That common argument from the salespeople couldn't be further from the truth. If consumers understand the implications of holdbacks, floor plan and the importance and costs of inventory turn, and combine that with knowledge of the turnover method that is routinely used in car sales, then the business is quite easy to understand.