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Purchasing Strategies - Questions & Success Stories
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Thanks!
another thought on TMV.....keep in mind that TMV is the AVERAGE which implies there is a normal distribution around that mean. It is indeed a good place TO START, and anything below that average has you somewhat ahead of the game, but it doesn't really tell you what you could reasonably get the car for.
I think what we're all looking for is the peace of mind that comes from confidently knowing that we're paid a *competitive* and fair price.
As we've seen on this board, depending on personal preference, you can achieve that peace of mind by working face to face with a few dealers, doing the internet/phone RFQ thing, and a dozen or more variations of these. However, because TMV is an average (and a month old average at that) I think TMV can't really get you there.
extreme example - If TMV for a car is $25k - that could mean half were sold for $24k and half for $26k; OR, half could have been sold for $20k and half for $30k. If you're paying TMV, you've left either "some" or "a lot" of money on the table.
The other potential issue is the timing factor. Those TMV prices are a month or more behind. Why risk losing dealer incentives available this month that weren't there last month? Conversely, if TMV is based on some big time dealer incentives that no longer exist, you'll drive yourself nuts trying to get to a number that is no longer realistic.
Quick -
Read online sites to determine a good asking price on the car, looking at invoice, TMV, and prices people claim they paid (but taken with a grain of salt), plus the max you're willing to pay. Go to the nearest dealer. Make OTD offer, which includes all fees, title, taxes, etc. If they accept, or counter at or under your max, then buy the car. Takes 15 minutes max, but you'll probably pay $200-500 more than the "rock-bottom" price. If that $200-500 is more important than your time then use...
Cheap -
Email every dealer in your area (for the model you're interested in) asking for an itemized, OTD quote. If a dealer does not answer you, go there or call them to get a quote. Some may not give you one, but enough will. Buy from the dealer that offers the lowest price. This will pretty much guarantee you get the lowest price in your area, but will take many hours.
I prefer Quick, but then I feel that it's worth $200-500 not to have to put that much effort into it.
Only reason I could think of to do so, however, is in case the price you can negotiate is cheaper. But, I think it is easy enough to find out in advance what the supplier price is, so you know what you are trying to beat.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
The only benefit to the dealer is knowing where you stand - if that is your bottom dollar price, and research through friends, relatives, Edmunds posters, etc got you to that number, that's all you need.
If they come back with "sorry, we can't do $27,200, but we can do $27,600", you can decide if it's worth to negotiate further or blow it off.
It's a matter of cutting to the chase for both parties, and actually ties the dealer's hands in your favor - either than can do it, or they can't - either way, you'll know.
"do not work for/run a dealership"
Actually, yes I do, and I have for nearly 2 years. I'm the sales/F&I/service advisor trainer for a fairly large (7 stores) privately owned dealer group here in PA.
It's a great situation where I don't have to strap on long hours, but I'm in touch with the car market several times per week, which helps immensely in my primary job with current vehicle values and finance/service policies.
Add to that the savings I got on the loan, and I feel that my time invested paid off.
As I said, or perhaps should have, the elmination of negative stress and conflict from the situation was also very valuable.
No one (that I have read) recommends visiting several dealers. I visited exactly 5.
3 for test drives (deciding which car we wanted).
1 When the deal on the new was set, but that fell through when they low balled the trade.
The second who actually guaranteed my new trade $$ on the phone based on what I told him happened elsewhere.
Any dealer who did not reply or correct a quote (to be itemized - not really hard to do), was simply eliminated from the purchase scenario - actually a time saver.
EDIT: Of the 5 we visited - NONE were visited for the purpose of obtaining a quote.
Dealer emails can be good if you get good responses, but I've never had much luck with it, although my wife did with her Alero.
I got a very fair price, based on my research and comparisons of price from dealer to dealer.
It was never about getting the lowest price, it was (and remains) about getting a fair price (lower is better), but more importantly about leveling the playing field, reducing 'closing time' and eliminating the confrontational situation.
Perhaps you should allow your wife to get you prices next time, and then - should choose to, you can use those numbers to make your deal.
Maybe the quick method would have gotten you the same price, I spent 4 hours - over 10 days to 2 weeks, and 2 more (including about 1 for the finance guy), to actually take delivery.
I am quite satisfied in my cost to time spent ratio, and it includes all my research time as well.
I do not think I could have gotten within the closed price using the 'quick' method, as it would have degraded into the 'old' method rapidly - as in taking all to close.
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do your research! check on the internet and see which cars fit what you are looking for. go see them on sunday (or after hours) to avoid wasting a salespersons time. if you arent there to be serious, its unfair to the salesperson to help you for if they dont even have a SHOT at making the sale - we're people too! after narrowing it down, go test drive the ones you like - again, remind the salesperson that you are just test driving, to avoid taking up too much of your time, or their time. dont get price quotes. once you decide which is best for you (and what your budget is) email the dealerships in your area with what you are looking for and ask for their best price. compare your returns to your budget, and if you are way off, consider LESS equipment, dont try to make the dealership sell you a car thats $3000 over what you want to pay, for your price - its just not possible. when you feel comfortable with a price and a vehicle - call the person you spoke with on the internet, set an appointment, and go finish the paperwork! done!
at least, thats how i do it - having been on both sides of the desk per se!
best of luck!
-thene
Hi Thene - that's pretty much what I did and was very satisfied with the experience. The only thing I'd add to what you said is that when emailing for quotes, do NOT email the dealership where you did your test drive. Rather, once you have rounded up your quotes and you know what price you're looking for, I'd recommend going back to the dealership where a salesman spent face to face time with you and then giving them first shot at matching/beating the price. By not emailing that dealership for price quotes, you don't complicate any internal politics related to commission shares.....and if the staff is happy working with you, you've got a much better chance of being happy working with them!
anyways, i'll be happy to help however i can with anyone who has questions. anything to make car buying as easy as possible!
-thene
After sleeping on it and doing research on numbers, I call the appropriate salesperson to make and offer (out the door price). I like to deal by phone because I spend a good part of my day in the office. I can talk to a salesperson / leave voicemail and it doesn't take up much of my day. After trading a few calls, a deal can usually be struck during one day at work.
The only time I re-visit the dealership is to sign paperwork and pick up the vehicle.
Granted, this is a bit simplified since I don't usually have a trade-in, but it has worked well for me in the past.
my take on this.....ask them if "no haggle" means they won't haggle with you or if you can't haggle with them either ;-)
If they say that the price is the price, you still need to make sure you know exactly what it does or doesn't include - options, TTL, delivery, doc processing fees, prep fees?
If you aren't price shopping, at this point you're done. And, if you are shopping elsewhere, thank them for making it easy and tell em you'll be back!
I prefer to "touchy-feely" what I'm thinking about buying.
Usually, 30-60 days out, I think about what I may want and make a list of those.
A little time here spent at Edmunds tells me if there's some "gotcha" with the model(s) I'm looking at.
If I trade, I look at KBB used car trades, e-bay (not the best, but a good idea of what my trade is selling for around the country), and ultimately, Terry who resides in the Real World Trade thread to get a good idea of what my trade is worth (or what to ask for it via private sale).
A little more research at maufacturer's WEB sites and here at Edmunds tells me what incentives are available, if any. It also tells me what the cars are being bought for around the country.
A nice Sunday stroll through the lots when the dealerships aren't open tells me if I like the look/feel of the car from a "peak-a-boo" standpoint.
I call a couple of dealers. Ask a salesperson (prefereably one referred to me) if they've got XYZ in stock and make an appointment.
Test drive comes next. Trade (if any) assessment done during test drive (hint....make your trade look/drive as good, with a nice detail job, as if you were going to take grandma on a long trip).
Getting to the numbers....you should, by now, have a good idea what your trade is worth and what the new car will sell for. Make the first offer. Offer the lowest price you've researched. Dealer will either accept it, counter it, or refuse it outright. If they refuse it outright or they counter with a number $1,000 + more, no harm/no foul. Thank them for their time and walk away.
If it's within $500 of your target price, you've got some wiggle room. If they accept it, done deal. Hint...if you get between $200-$250 of your target price, offer to split the difference. That usually gets the deal done.
F&I....by this time, you should know what the fees should be if you've done the research. If they are out of line, again...thank them for their time and walk out. I've never known a dealer to lose a sale over the high fees they were charging.
That's it.
We're left to call you, but many people intentionally don't leave a number, or take an hour to run a locate, get the sales manager involved, call a sales manager at a neighboring store that has the specific model, or close to it, but they won't talk to us, because YOU'VE already contacted THEM...the best effort is a guess, and hope you'll choose us, but the dealer across town won't release it as a trade because they're already working a deal on it - WITH YOU.
Argh.... "
Good point. I ran up against this a couple of months ago. Fortunately, I ended up not liking the cars that I as a buyer, caused by talking to too many dealers about the same car. After that, I was careful to not get too deeply involved in any one car.
The other thing I find counterproductive, is that rick is essenntially (perhaps not on purpose, nut nevertheless) "playing" the internet dealers by having them all send in price quoutes and then going to the test drive local dealer and ending up buying the car from the one place where he didn't do any internet communication at all.
Did all you sharpies pick up on this??? Terry you did as a waste of time on the buyer's part), but did you notice the "playing" factor there???
ASK A FAIR PRICE, CUT THE BULL, AND THE SECRET GARBAGE, and all the other stuff, and evolve and see how things change.
What I am hearing is the last dinosaurs of the industry upset that the buyer has taken control, and found a way to eliminate a lot of wasted time and money.
And, it's not hurting the dealerships - it's hurting the salespersons and their bosses.
Either learn or fail.
;-)
fair enough....here's my reply....I have respect for honest salesmen and those that get paid on commission. Now I don't claim to have any knowledge of how the back room of a dealership works, but I'm guessing its going to get ugly if two people try to lay a rightful claim to the same customer, and I don't want to be responsible for that for two reasons. On an absolute level, work is hard enough without that kind of conflict coming up - I wouldn't want someone to do it to me, so I won't do it to them. On a personal level, had I created that conflict and then tried to work a deal there, its going to be with either the original salesman or the internet guy - and at that point, they'll both be rightfully PO'd at me - thats not going to make for a fun transaction at all.
As for the contention about 'playing one dealer against each other' I really didn't.
I asked for prices from about 15 dealers and got prices from about 11. At that point, i didn't do a second run through to squeeze "every last cent" out of the deal. Thats not me. Yes, I do want a very good, competitive price, but I'm not doing this for sport nor to put anyone out of business. I just wanted to be sure I was working with a very competitive price...and i was.
If you already know what you want and what you want to pay, why do you need 15 participants in the bidding process? I guess I just don't understand the reasoning.
It's not worth much to the guy who didn't get your business because the dude 3 towns over beat his price by $20 after he worked his manager and the locator for you for half a business day.
---------------------
just a quick update....I finally got out all 11 emails to the folks I had been working with. I thanked them again for their time, and then told them I had purchased elsewhere and roughly how much lower the other dealer was asking.
In 24hrs, I've heard back from 7 of them thanking me for the update, and 2 wanted to ask a few additional questions about how I came to my final purchase decision.
Are they happy they lost the sale, no. Do they have some resolution and an explaination they can take to their sales mgr? yes.
I'm pretty comfortable with how it all worked out.
I'll say it for the last time.....
When I started this process, all I knew is that I wanted to pay a competitive price....and I didn't think that simply knowing invoice, MSRP, nor TMV was necessarily a competitive price. However, before I started the email campaign, I DIDN'T KNOW WHAT A COMPETITIVE PRICE WAS AND THE EMAIL CAMPAIGN WAS MY WAY OF FINDING OUT!
what is so hard to understand about that?
i wasn't trying to make this painful on anyone or get them to offer a price they really didn't want to. I asked a bunch of places for a price. Sometimes it required a followup email to make sure we had all the details included in that price. Once I had the prices, I saw there was a huge range. I wanted to pay in the bottom end of that range. Before I sent out 15 emails, I didn't know where the "bottom end" of the range was, afterward I did.
Now, did I have the right to do a second pass through in order to squeeze a couple hundred more dollars out of the dealers and get to a point where they make 10 bucks on it? Damn straight I did. Just as the dealers had the right to give me the virtual finger by not responding, but I didn't go there. As I said, its just not me.
I'm glad your method works for you. I'm not changing mine, and I walk away from this very comfortable with myself knowing that I treated everyone respectfully & professionally as I would want to have been treated, and I paid a competitive price where the dealer whom I bought it from doesn't resent me.
YOU should find out what you want to pay for a car, not ask advice from the folks who are trying to sell you something - you can't have the upper hand at any point in your car chase unless you know what a fair goal is (yourself), not what someone who sells them says the goal is.
Do your research before you contact dealers, tell them what you want to pay, not ask them what they want to sell it for. See? I really am on your side on this and I'm trying to make car buying easier for you, and not such a monumental task.
"Before I sent out 15 emails, I didn't know where the "bottom end" of the range was, afterward I did"
Perhaps so, but you still don't know what a fair price is, or the best you may be able to do, based on national research and opinions from other buyers - info like that is available in many places, right here on the internet.
All you knew at the end was what the lower range of prices were that dealers in your area would like to get for the vehicle. What if Edmunds TMV and what Joe Blow from Sacramento paid were $1000 less?
After all the e mails do you still know what the competitive price is? Why would ANY dealer that negotiates give the lowest price they'll sell the car for- over the internet?
"Now, did I have the right to do a second pass through in order to squeeze a couple hundred more dollars out of the dealers and get to a point where they make 10 bucks on it? Damn straight I did"
That pretty much makes my point- the very first dealer you e mailed could have given you(or not) their rock bottom price- but it wouldn't of mattered because not only did you shop that price 14 more times- you went back a second time to most of the dealers to see if you could do better.
I'm going to send out Emails to get a price on a Honda pretty soon. I think I know what a reasonable price should be. If the dealers give a price lower than that, I will probably take the lowest one. If they all come in higher, then I will revert to my old Bobst method of car buying.
I am curious to see how it works out.
Why the change? Youre quite proud of your method.
Stores that do internet sales know that we sent same email to fourteen other stores. They also know that if they don’t reply with a good price somebody else will, and they won’t get the sale. Therefore, the lowest quote out of fifteen emails is probably as close to the bottom price as you can get WITHOUT grinding. With any other non-grinding approach we would end up paying MSRP, plus we will get screwed on the backend (host, I did not mean that literally ; unless you are telling us that we should be using Bobst method. I have never heard of anybody having their first offer accepted, no matter how fair it is. The salesman will always try to squeeze more, therefore it is fair for us to try to squeeze more out of you.
Having said that let me be blunt with you (and by you, I mean all the pros out there).
STOP WHINING!!!!!!
We didn’t create your business model, you did. We care about your family finances about as much as you care about our family finances. We care about wasting your time as much as you care about wasting our time. You have your “methods” of squeezing money out us, and we have ours. You have created this monster, live with it. Take good with the bad. If it was all bad, you would change your business model, because you are in control.
but you are right about internet managers (me being one) i consistantly offer $400 below invoice on pretty much any car quote request over the internet because i KNOW that people on the internet are emailing me and about 10 other people. if i am not competitive, i dont earn business - thats it.
By getting quotes from about 8 dealers, itemized so I could make comparisons, I ended up getting it from one of the closer dealers, and at about $800 (or more) under.
So, I'd say that in my case anyway, the process I outlined was 100% successful.
I disagree with the cavalier thoughts that the use of the internet and emails to simplify the process and reduce the price is causing nothing good.
I happen to think that anyone who IS going to buy a car and IS using the net/email will be more serious and will be more apt to get a better price faster and with less stress and BS.
It is a matter of dealers learning who is serious and who is not.
Remember, if dealers choose not to play that's fine.
But, perhaps it's more of a regional thing. In the city internet sales may work much better, and vice versa.
I would be very surprised if the next time I buy a car the process has not totally changed -- again.
newsflash....work is hard and its not always fruitful, thats why they call it work.....
As for the 10% qual rate - if its not making sense for you, don't answer them. In fact, 4 of the 15 didn't respond. I think no more or no less of them.
As for what to pay - I don't KNOW anyone who bought the same car I wanted, so I didn't KNOW what a good price in my area was. We've been through the TMV conversation - 1) the number is dated, and 2) its an average meaning there is a range...if the range is 2% around the average, there isn't room to go down, if the range is 20% around the average, paying $100 below TMV still isn't a good deal.
On an apples to apples comparison - OTD prices for car, options, TTL, delivery, doc fees - I saw $27.6 (motivated sellers) to $29.7. Had I walked into the $29.7 dealer for the smile and the handshake, how much lower was he really going to go without me feeling like I've been through a war?
Some posts are missing - as I said before, this won't turn into a redux of the Inconsiderate Buyers/Salespeople discussions. And, I'm not going to spend a bunch of time monitoring and deleting in this topic. If it gets personal and/or ugly again, I'm just going to close this discussion.
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If the only communication up to that point has been by e-mail only, how would the dealer know what kind of price comparison you have done, or not done at all?
What buyer will be taken more seriously- the one who does a mass email for prices or the one who is physically at the dealership?
I respectfully disagree- IMO the best deal is going to come through research, and applying that at a dealer that-
1- you would do business with.
2- they have the vehicle you want.
Easy.
I send 1 email (the same one) to all the dealers - they can see who was on distribution for the request.
Plus, in my area they ain't naive. WHy would anyone submit one request, when they can send in 10 just as easily?
WHen they know it is serious, and it is a competition, well it gets to the bottom line rather fast.
COuld I have done better absolutely, but I saved time, confrontation, stress, and BS - and the time saved cost me about $150.
Well worth it.
In my humble opinion.
Fact is, if you walk in to negotiate, you don't want to leave empty handed. SO you are more likely to get worn down and ultimately more frustrated.
All dealers pay the same for a new car from their respective factory brand. All dealers can match any other dealer's car price, if they so choose.
With the wealth of information I can glean with regards to invoice, rebates, etc, it should be fairly easy to see whast price will buy any given car.
Doing just a little bit of research , I should be able to tell if the car I'm interested in is selling well or not. I can look at the dealer's lot and tell whether a particular car/truck is selling well. You can go to just about any manufacturer's WEB site and search for the vehicle you want, at the dealership closest to you via "search for my vehicle" functions.
Based on all the above I personally find it would be a waste of my time to fax a bunch of dealers looking for the best deal.
To me, the best deal is always had by me standing in the showroom with checkbook in hand. I doubt very seriously any dealer is going to let me walk out without making the sale if they know I'm serious.
Having never been in sales, I would think that a fax wanting my best price would be highly unproductive way to respond since I have no idea whether the person will actually buy my product.
Since I already know what a fair price is (via my research), it's usually a "yes, we have a deal" or "no, we don't have a deal" when I walk in.
Nobody is wearing me down in the process. It's usually fairly simple. Either the dealer accepts my price (in which case I just bought a car)), they counter my offer (which I'm free to walk away from, or I can counter their counter), or they reject my offer (in which case I don't buy a car and they don't make the sale).
All that said, I don't spend much time with dealers who use the "4-square" method of selling.
I have my own spread sheet with all of my figures.
Personally, I use my PDA with my spreadsheet and enter numbers on it as we agree to them so I can check and recheck all the numbers (mine and their's). That way we can catch mistakes as they happen.
One thing I've learned recently is to have the salesperson disclose all fees before we enter into a deal. Usually, they try to deflect talking about them as a function of the F&I office. But, I don't like surprises and insist on having the total deal in front of me before agreeing to anything.
I always asked for an offer to purchase - puts you in charge, plus we don't play the back and forth as much.