Internet vs. Traditional Car Buying

blufz1

O. K. Maybe I should have said disagree. I realize each person has his/her buying style. Of course anyone can get lucky. But the industry has their decades old way of selling. I just like to turn it around on them. Dealers would not use their tried and true time investment method on buyers if it didn't work. I use it on them because it works just as well when buyers use it on sellers. + I like the irony.

thenebean

if it works for you, great! i personally wouldn't want to spend more time at a dealership than i need to - and i used to work at one! I am content with getting my car and getting on the road to enjoy it, not go back and forth for a few hours just to get the dealer invested in me. sometimes, depending on the dealer and the circumstances - they may just cut you off and send you on your way, sale or no sale, just because they figure you might kill them on the survey anyways, so whats the point?

-thene

blufz1

It's really not a ton of hours. I go in,we walk around the lot to see if they have the color I want. Spend a little time making sure it's perfect. Then go for a test drive. Back to dealer for initial #'s and my car goes to used car guy for valuation. More #'s. Meet the manager. More #'s and buy or walk. I know they will be calling me. Usually 1.5 hours.

cdnpinhead

"More #'s and buy or walk."

Exactly.

You've now spent an hour or more getting to where I am in minutes. I'm sure you're as pleased with your method as I am with mine. Either way, we move on to the next store. I've never had to go to more than three. It's no big deal. I get the price I want & no one (including the store -- most of them appreciate this) has to spend hours grinding.

Whatever floats your boat.

My time is actually worth something.

jipster

You going to 3 different stores is probably not the best use of the time you value. Even if you know what car you want and are agree to pay MSRP, the car buying process will still be around an hour... not minutes.

joel0622

The majority of car buys one will be looking at are: invoice, minus holdback, minus incentives... as a starting point.

Then be sure to mention on your survey the whole process takes to long. :confuse:

To go with thene's line of thinking, why cloud the issue by making an offer that you know will not be accepted? Believe me that does not make a dealer think any different just because you low ball them from the git go. It might make a green pea sales person think twice but not the guy desking the deal. All it does is slow down the process as we have to sit there and tell you that your deal is a no-go.

cdnpinhead

". . .the guy desking the deal."

This is the person I make my arrangement with, in 5 minutes or less.

I've done it & it works.

I probably didn't get the best deal on the planet Earth, or get to prove that I have, let's call it "superpowers" (need to keep the hosts happy - I made no reference to genetalia), but I got the car I wanted for what I considered a fair price.

I guess I'm stupid, but happy. Not a rare situation.

bobst

"All it does is slow down the process as we have to sit there and tell you that your deal is a no-go."

So how long does it take to tell the customer that? About five seconds? Not much of a slow down, if you ask me.

jipster

why cloud the issue by making an offer that you know will not be accepted?

You are assuming too much from my post. I am not suggesting making an unreasonable, absurdly low offer. Cars often go for invoice minus holdback do they not? Sometimes even less from what I've read. If it's near the end of the month and a dealership needs one more unit to move into bonus money.. you think they would be laughing at a low (not ridiculous) offer?

Let's look at it another way. Why does the dealership "cloud the issue" by suggesting a price the vast majority of people will not accept(i.e MSRP)? You ask for a price, sometimes you will get it... within reason of course.

joel0622

Let's look at it another way. Why does the dealership "cloud the issue" by suggesting a price the vast majority of people will not accept(i.e MSRP)? You ask for a price, sometimes you will get it... within reason of course.

I was more talking along the lines of the "hot" cars thene was speaking of.

The MSRP is suggested because that is what is on the window. I guess the key to negotiating and selling/buying a car is you know where the dealer starts, you make your offer so we know where you stand, then to find out if there is middle ground we can all meet at. I have no problem in the world negotiating with an intelligent, informed consumer. They impress me, and will be rewarded with there hard work with a good deal. Its the guy who pulls numbers out of the air that cannot tell you where they come from or he thinks they are fair, and thinks that the louder he gets the better the price will be that kill me.

thenebean

i wouldn't say that cars "commonly" go for invoice less holdback. i would say the good negotiators might be able to get that if they get there on the right day of the week, and the dealer has hit some good deals over the course of the month. but commonly? not really.

i would say a common deal is anywhere from a hundred or so under invoice to a few hundred over...thats where most of my deals fell when i was selling cars...

a lot of people can get well below invoice because they are including the rebate in their price. that doesn't come out of the dealers pocket anyways...so really, it doesn't count when you are trying to determine what cars usually sell for.

unless i strike it rich, my plan is to buy a new (or year old) car, finance for 5 years, keep it 7-8, put at least $5-$8k down, and enjoy life. a couple of hundred bucks spread out over 5 years is just not worth the hassle to me, to fight a dealer for it. i know what i can afford, and thats what i'll pay, regardless of what the dealer is making, etc.

life is less stressful that way

but, as always, everyone buys cars differently, and thats ok! whatever floats your boat!

-thene

paisan

I have a fairly good formula that I use when buying a new car:

+ Invoice Price
+ Delivery
- Rebates/Incentives
- Holdback
+ Dealer Profit (Depending on the car will determine this amount, in generall <$20k car $500 >$20k car $750 >$30k car $1000 >$40k car $1500 etc)
= Price I will pay

What I do is spell it out for the dealer in that manner and generally they will be willing to do that. I also usually know what I want and I can be in and out of a dealership in about (2) 45 minute sessions which means that sales guy is making about $250/hr give or take.

-mike

thenebean

that formula pretty much puts you back at invoice (just as a rough ballpark, the profit that you add back in based on the price of the car is about what you're looking at for holdback for a similarly priced car. you can probably wipe those two out, and just offer invoice)

but then again, i am just experienced with Nissan's holdback, as that is what I sold...

-thene

paisan

Yeah but when I spell it out for the sales guy like that, they understand, my whole idea is to make it a painless "easy" sale for them. You can also adjust the "profit" portion depending on how hard or easy it was for me to buy from them.

-mike

lrguy44

As has been stated before, most sales departments do not get paid on holdback, and will completely disregard it in negotiations. The sales managers and salesmen in most store are paid on selling price-cost-pack. That is what they look at when working a deal. Rebates they recover from the manufacturer.

blufz1

The difficulty w/ that approach is that dealers have non published amounts of profits and Mfg to dealer rebates that the public doesn't know about. You will not know unless you offer less,are a little lucky,and hit one of these deals.

lrguy44

There is a big difference between rebates (which must be passed on to the customer) and dealer cash, which is the dealer to decide if it is passed on in part, none or all. The customer has NO inherent right to that money, but the dealer can use it to make a deal if he desires.

paisan

I haven't tried this yet but may on my next car is to e-mail my formula, outlined above to all the dealers within 100 miles of me. Whoever comes back with my price first gets the deal.

-mike

blufz1

You'll get more offers than you can buy! Take off the dealer profit amount and you will get several offers at this lower price. Hope this saves you some $. Since you asked . If I were doing it your way I would send them 1 number. The amount of your offer w/ 0 dealer profit.

joel0622

to all the dealers within 100 miles of me.

Thats a classic right there. Are there allot of dealers in your area or is it a rural area?

jipster

which means the sales guy is making about $250/hr give or take.

I don't know, sounds like a "mini" to me. If you are making an OTD offer, and the dealership has a $399 fee added to the price, the sales guy is probably making more like $100/hr.

lrguy44

The sales guy doesn't get paid on D&H Fee. A mini in most low end stores pays the sales guy $50-100. But you can call that an hourly rate unless he sells 8 a day.

paisan

Sorry I meant to say I am paying about $250/hr. For that price I can get a decent hooker in NYC.

Within a 100 miles of me there are probably 100s and 100s of car dealers. At least 20-30 of each car brand if not more.

-mike

thenebean

to say that you'll get several offers at invoice minus holdback is being generous. maybe if you catch a dealer one car away from his volume bonus for the month, they'll take it. but to think a dealer on your average day of the year would just say "hey! a $0 deal on the sales side! lets take it!" is pretty naive.

will some take it? yeah...but not many, and again, it depends on the circumstances.

am i gonna stop you from asking for it? no, however you are more often going to be disappointed than not...

my two cents anyways...

-thene

jmonroe

Hmmm, where have I heard that before?

Yeah ... how many handles does Edmunds allow one guy to have?

jmonroe

blufz1

That's it. I am just looking for that 1 guy who will give me the deal. Don't go in on an average day if I can help it. Toward or at the end of the month.

mikefm58

For that price I can get a decent hooker in NYC.

Ummm, Is that appropriate for a public forum? Especially from a host.

jipster

I believe paisan was joking mike.

mikefm58

Yes, I agree, still not appropriate, but that's just me.

thenebean

agreed, the end of the month is when you are most likely to get it, however it is not a guarantee. the dealer could have already hit his bonus, and doesn't need to hand a car away. a dealer may be so far off his bonus that trying to give cars away for the next two days won't get him there, so why bother?

you gotta catch the dealer on the day where its the last day of his bonus, and he needs a car or two to get there. then BAM! you can get a really fantastic deal!

-thene

paisan

Jeez, you guys are sooo stiff. I was joking!

I agree with thene, it's a lot of luck, and hit or miss on if a dealer gives you a deal. It's more of an art than a science!

-mike

blufz1

That's what I'm talking about! The last car I got was $800 under the invoice. It was 12/28. I think that a day or 2 before the last day may be the best time. You know they maybe haven't hit their#'s but still hope to. What do you think?

joel0622

Best day to buy a car here is on a cold, rainy, miserable day about 7:00PM, and when you pull up and you are the only one here with the exception of the sales staff.

We always say if somene comes in here on day like this they are going to get a deal of a life time.

blufz1

Thanks for the info. Appreciate it.

jmonroe

I agree with thene, it's a lot of luck, and hit or miss on if a dealer gives you a deal. It's more of an art than a science!

I was the recipient of some great luck when I bought in 2005. I've told this story before. If anyone wants to read it or read it again go to:

"Purchasing Strategies - Questions and Success Stories" post 2599.

I'll never be able to do this again but at least I got lucky once.

BTW, the initial visit to the showroom was on April 29, 2005 at about 7PM. This part was intentional, no luck here.

Like I said, pure luck.

jmonroe

audia8q

well now you have to go to word rehab...shame on you.

in this era of super hypersensitivity you can't say anything without causing somebody to whine.

oldfarmer50

Just ask Don Immus.

audia8q

you know.. some of the most amazing deals I have ever worked were often given to people who had no idea how good it was. Not because I'm a generous and wonderful person (I'm not) but luck and timing play a big role...sometimes when I'm a little short on a sales objective I will lose money to hit a goal...This isnt always on the last day of the month, and its not as rare as some would like to think..

There are two types of buyers who will never get these types of deals from me, the internet buyer and the grinder. The customer sitting in the showroom ready to buy right now has a much better chance of getting a better deal than anyone.

jeffyscott

The customer sitting in the showroom ready to buy right now has a much better chance of getting a better deal than anyone.

So should one park themselves in your vistor chair for the entire month, to be sure that they are the one who is in the right place at the right time?

If I come in every week and ask you if I can have an "amazing deal" are you going to eventually let me be the lucky one?

Some dealerships have internet only sales people, so I guess, if one deals with one of them, there is a chance of getting lucky without the hassle of visiting a bunch of dealers a bunch of different times.

joel0622

So should one park themselves in your vistor chair for the entire month, to be sure that they are the one who is in the right place at the right time?

No I would say it is more of a case of being in the right place at the right time.

bugchucker

I just spoke with a guy who got $4500 off MSRP when the most I could find in a 200 mile radius was $3000. I asked for his secret but he had none. He stated the dealer was trying to #1 in volume in the U.S. and that was the price he was given.

joel0622

He stated the dealer was trying to #1 in volume in the U.S. and that was the price he was given.
Bragging rights are expensive some times

audia8q

So should one park themselves in your vistor chair for the entire month, to be sure that they are the one who is in the right place at the right time?

yup

jmonroe

There are two types of buyers who will never get these types of deals from me, the internet buyer and the grinder.

The last two times I bought, I started with the internet followed up with a phone call and went to the showroom to sign the papers. As one of our more respected posters would say, &#147;easy, peezy&#148;. I had never done this before and was pretty skeptical about it until I tried it. This is the way I plan to do it again unless the rules change in my area.

I&#146;m not a grinder but I won&#146;t buy unless I get my price. People here know I won&#146;t spend more than 30 minutes after the test drive to buy a car, whether I&#146;m at the negotiating table or on the phone. So, a grinder, I&#146;m not.

The customer sitting in the showroom ready to buy right now has a much better chance of getting a better deal than anyone.

Give me a good price and I&#146;ll buy before you close your doors. I&#146;ve done it twice so I know it can work.

jmonroe

cosanostra

I've been reading through the posts (mainly the most recent ones, so sorry if this has been asked) and was wondering what the group thought about using the internet for buying a used car. Would you follow the same techniques as you would for the new car or does the fact that its used make it easier or more difficult?

-cosanostra

jeffyscott

For used, I would use the internet to see who has what I am looking for. I would possibly use email to confirm they actually do have it and that it is accurately described. I would not really negotiate, until after actually seeing and driving the specific car.

After selling a car on craigslist, I am amazed at how many people call and try to negotiate a lower price without first coming to see the car. It's ridiculous from the seller's perspective, because the person is not really offering to buy if you say "yes, I will take $100 less than what I have listed".

With new, you can see and drive the model once and then search anywhere, but with used each vehicle is going to be somewhat unique. So used is much more difficult and time consuming. The internet has made used car shopping easier, in terms of finding who has what you are looking for. With new cars, the internet has instead had more impact on negotiation of selling prices.

jmonroe

For used, I would use the internet to see who has what I am looking for.

If you're looking at dealers, wouldn't using the phone accomplish the same thing and thus you wouldn't have to wait for replies?

jmonroe

jeffyscott

If you're looking at dealers, wouldn't using the phone accomplish the same thing and thus you wouldn't have to wait for replies?

Are you going to call every dealer in the area to find out if they might have a car you want? I was referring to doing a search for what I am looking for on cars.com and/or autotrader.com. Follow-up confirmation could certainly be done by phone. My personal preference is to avoid the phone as much as possible.

jmonroe

Are you going to call every dealer in the area to find out if they might have a car you want?

Since we are talking used and not new, if I've decided to buy from a dealer, using the phone is easier for me. Furthermore, talking over the phone lets me know what they have now and if they have what I want I'd go now. By the time an e-mail is sent, replied back to you, you get back to the dealer, the car you want might be gone. I'm not knocking your use of e-mail for used cars, it's just not the way I would get info from dealers.

There is more than one way to skin a cat.

jmonroe

jeffyscott

What I had said was "I would use the internet to see who has what I am looking for". You are misinterpeting "using the internet" to mean emailing dealers.

What was meant was using cars.com and/or autotrader.com to search pretty much all dealers' used car inventory in a few seconds. After searching, I can see your point about following up with phone call rather than email for confirmation, etc. But, you seem to be suggesting just randomly calling car dealers, which seems like an awfully time consuming way to find a used car.