Buying Tips - How Do I Get the Best Deal?

plekto

Remember, though, that if your car that you are trading in is fairly new (under 10 years and in good condition), you'll always get an extra thousand or more from an individual, since dealers won't ever give you more than absolute rock-bottom "fair condition" blue book these days. Even if the car is perfect. If it's not, they'll deduct from that amount.

It's very vicious. But when they are negotiating the price of a car, it's easy to fiddle with the numbers to hide that 1-2K difference. Just something to be aware of, since most dealers deserve the bad reputation they get.

qbrozen

Well, as I think you and I have discussed before, selling on your own isn't always such a great benefit. I feel it is even less so as you get higher in price. For me, anything UNDER $10k is better as a private sale, while the newer, more expensive stuff is not, thanks to the tax laws in some states (including mine).

Basically, used cars are a flat rate. You'll typically get $1500-$2k over trade value as a private seller (I always assume $1500 to be safe). That involves me getting the car up to snuff with maintenance, detailing, ad costs, etc. Figure another $500-$600 on average. Not to mention my time dealing with the tire kickers. So now I'm down to $1k over trade value. BUT... on a $10k car, I'm losing the $700 tax benefit. So am I going through all this trouble for $300? Nope. I'd have to guarantee myself at least $750 to bother, personally.

stickguy

a wise man once said "the only difference is the difference".

To me, trading in makes more sense the newer (and more valuable) your car is. Especially in a trade credit state (like NJ, with 7% sales tax).

there are a couple of key reasons:

1) on a 15K trade, I have to get 16,050 on a private sale just to break even. Selling cheaper cars though (a couple grand), not such a big deal.

2) it can be a large pain in the rump to sell a more expensive car private sale. Very few people can come up with even 10K, forget about 15-20K, without financining. So you get dragged into that mess. Plus, they often have other cars to get out of.

again, if you are getting out of a cheaper car, especially something like a Honda, you can easily net a couple quick $Ks by selling it yourself (2K trade offer, sell for 4K in days, cash money, is not uncommon).

plekto

Yeah, I live in California, where they tax you on the full sale price before any actual incentives, rebates, trade-ins, or down payments, so YMMV in some cases, apparently.

BUT... in a lot of sales lately, the dealer isn't offering 1-2K less. They are offering auction prices, or 4-6K less on a 4-5 year old car. And, low mileage private party vehicles tend to sell within days, especially if they have options that you won't find on rentals. Trying to find a 3-5 year old vehicle that's not a base model or an ex-rental is crazy hard. Buyers in those cases usually come with their financing all in order.

billy3554

I have traded in three vehicles all about two years old in the past three years, two within the last fourteen months, one just two months ago. For all three vehicles the trade-in value I got from the dealer was a bit more than good and a bit less than outstanding. Certainly the first offer from the dealer was the fair condition value, which was silly.

I also got about invoice or less on the selling price of each of the new vehicles. One must always be aware a dealer may attempt to offset a good trade value with a higher selling price. That does not mean the dealer is unfair but, rather, simply negotiating.

It is so much easier to simply trade in a vehicle, particularly considering the tax advantages, which on my latest purchase was about $1,200. Adding this tax advantage to the trade value makes the money advantage gained from selling private less attractive. Also avoiding the stress of a private sale is nice.

When buying a car the key is to buy the right car at the right time. One must always remember negotiating a car purchase is not personal. If a person does his/her homework and sticks to the figures they derived a good deal is assured, though it may require contacting several dealerships.

stever

A reporter would like to speak to anyone between the age of 20 and 30 who needed financial help from a parent to buy a new car. If you fit this description – or if you are a parent who has helped a 20-something son or daughter buy a new car - and you’d like to share your story, please send your daytime contact information to PR@edmunds.com no later than 3 p.m. Pacific/6 p.m. Eastern on Thursday, May 3, 2012.

riverside71

CarWoo is a car buying service which allows you to sign up and request a quote from several dealers in your area for one car of your choice. You can request quotes for up to three cars if you sign up as a paid customer. The freebie trial offer is for one car quote only.

Registration requires you to enter a phone number so the verification codes can be sent via text. I don't have a texting plan so the signup verification process didn't work for me. I had to call customer service to get signed up. The toll-free number gets picked up and customer service is responsive.

The process is simple. You configure your desired car with all options and request a quote. CarWoo will anonymously send the request to a list of dealers you have chosen. They recommend you choose several. I learned in the end why; response rates are not guaranteed and I received a whopping total of one response from a dealer from a neighboring city.

The quoted price was well above invoice. The dealer was quick to provide the quote, took a day and then followed up with several messages on the website. CarWoo provides a page on which you can manage all your offer, or in my case.. the only offer I received. The offers are time-limited and you have to respond before they expire. I didn't get any response to my counter offer placed before the expiration period and the offer then expired.

Two more weeks passed and I didn't receive a single offer other than the first and the only one. Overall, I am very disappointed with the service and am really glad that I'd used the free-trial offer and hadn't paid for it; I'd be really annoyed if I had paid to receive offers and then had such a dismal response. The prices also appear really high; you can easily do better by just calling any dealership and talking to their internet salesperson. For regular cars available on the lot, most dealerships will gladly sell around invoice. Something that looked unachievable through carWoo based on their target range for prices offered by dealerships.

Overall, I am very dissatisfied and will not recommend this service to anyone.

billy3554

I tried Carwoo. I got several quotes from dealers. None of the quotes were that good, very close to those posted on TrueCar, which are essentially average prices being paid. While those might be good prices, they are certainly not great prices and clearly not the best prices. Interestingly, the prices quoted by dealers via Carwoo for a Mazda 3 were higher than prices listed at the Fitzmall (one price dealer) internet page for the same vehicle.

I suspect dealers believe people who use Carwoo are people who don't enjoy negotiating and would likely accept a price less than optimal. Therefore, I doubt dealers give anything close to their lowest price to a Carwoo customer.

Nothing has really changed, the best prices for a car are obtained through work, contacting many dealers and engaging in face-to-face negotiating, with the dealer's internet department.

vballplayer30

MY TIPS FOR BUYING YOUR NEW CAR
ok, just negotiated and bought a new 2013 subaru legacy 2.5i premium for my parents today so everything is fresh

1) Look around for the car/s you want, but don't buy that day...ideally search 1-2 wks before the end of the month. If you like a specific car on that lot, find out what extras are on that car and what extras you do or do not want. When negotiating later, they can't take off the moon roof, nav, etc. They can order the car, but it could take 8 wks. You may have to buy the car with the extras if you don't want to wait, so consider all this before hand.
2) Search for prices paid in edmunds forums and the new car section to get an idea of the lowest price. Also search kelly blue book and truecar.com. Don't forget to add in ALL the extras that they say the car has...again, you may have to buy the car with the extras or wait wks for a factory ordered car. They will prob make you a better deal on the car on the lot.
3) Figure out your grand total...ie price of the car you want to spend with all extras (nav, moonroof, whatever), plus taxes, and other LEGIT fees associated with the car...look up online for legit and whats typical in your area. They got us for a 296$ doc fee (I believe)...unsuer if it was legit, but after 4 hrs...didn't want to negotiate anymore...this is 1 of there clever/slimy tricks...you painstakingly negotiate, they then hit you with varied bs fees at the end!!
4) Armed with all your price info., go to the dealer on the LAST DAY OR 2 of the month. (They are trying to reach their quotas so you will have your best luck in getting the lowest price!)
Don't waste time with the salesman...they will try to crunch numbers with you and go over other bs...the mgr makes the final decisions, so immediately ask the sales rep to get the mgr because "you're ready to buy".
5) Once he gets there, tell him you did all your research and have narrowed your search down to his car and 1-2 others. Here is my "OUT THE DOOR PRICE" with taxes, fees, etc. Tell him you will not waste anytime discussing, bartering, or negotiating and STICK TO IT!!! "Here's my price...you've got 2 minutes to decide!" If he says, "he can't go below invoice...he runs back to his office with various printouts saying look at what this and that costs...says, but I'm giving you the floor mats and cargo nets, I have to make something, etc, etc, etc, etc...(he would not stop)" Then say, "thanks anyway, I'm gonna go buy that new lexus!"

If you did your homework and priced the car well (the forums from here of what people actually paid are prob the most helpful and def the most accurate), you should get the deal without the headache of sitting there for 4 hrs like we did! DON"T be afraid to walk out, and be prepared to do so if ANYTHING is not what you wanted. Any additional fees or waste of your time then leave!! The moment we got up to actually leave, he said give me a price and was ready to sign off...and did!!! Remember, it's the end of the month and they need to reach their quota!

On a side note, we were paying cash, but agreed to finance as this made him some extra cash. It didn't effect us because we are paying it off in 3 payents in the first 37 days so there is no finance charge for us (of course we got that in writing as should you). You could possibly do this with your deal as they make money and as long as you pay it off, it won't cost you anything, but provides additional bargaining power... Hope all this helps!

55396

Good advice. Here are a few more thoughts.

"they then hit you with varied bs fees at the end!!"

So ask up front what any and all fee's will be. Write it down in front of them and note who told you, then let them try to weasel out of it.

"go to the dealer on the LAST DAY OR 2 of the month"

It would be beneficial to do this on a bad month. Where can one find sales data for the month and history? Edmunds?

"Here is my "OUT THE DOOR PRICE" with taxes, fees, etc. Tell him you will not waste anytime discussing, bartering, or negotiating and STICK TO IT!!!"

Be ready to walk. You know you can always come back. HE doesn't know if he will ever have another shot at you. In fact, if he lets you walk, you know that he is probably near his best price. BUT, if he has your phone #, he knows he can call you, so wait a week before returning.

Taking and paying off the financing could be a deal sealer, just be sure you know ALL the details and hooks. And, READ it. Amazing how many just sign what is put in front of them. If you don't, shame on you.

plekto

Most of these online services like Truecar and Cars Direct are actually using the same call center and search database, much like how travel agents do. I was looking for my father a couple of years ago for a car and called Cars Direct and Truecar and a couple of others and noticed that the main operator at the time was the exact same person who was forwarding me to the right company.

Go figure. So of course the prices are essentiall identical.

That said, the way to get a great deal is to:
1 - Get a year old model in the fall.

2 - Get your list down to three or four cars and simply shop which has the better incentives and bottom line price. For instance, the differences between a Mazda 3 and a Honda Civic are essentially cosmetic plus a few minor technology options. If one is a better deal than the other, buy whatever car or close clone to it is cheapest. Don't get emotionally attached to one specific car unless it really IS unique like a 911 or similar.

3 - Be patient. Some cars, like Cadillac and so on, can be left on the lot late ion October or early November. By then, the dealer is willing to let it go for under invoice because they don't buy the car outright, but they have to pay for the space rental and upkeep that could be going to a brand new and much higher profit car.

billy3554

Interesting comment as to whether the $296 doc fee was legit. As is posted so many places on the "internets", any document fee is not a legal fee or any other fee. Therefore, as a "fee" it is not legit.

A doc fee is is also not a cost of any kind to the dealer. All dealer costs are covered by the sellling price. Has anyone ever seen a dealer provide a listing of all its costs? All a customer might see is the invoice price of a vehicle. An invoice, in no way, represents a dealer's cost. Costs include such things as employee salaries, rent, supplies, electricity, etc., along with a cost for the dealer to buy the vehicle from the manufacturer. A dealer's selling price covers all these costs.

A doc fee is, without question, simply part of the selling price of the vehicle. If a dealer negotiates a price of $20,000 and then adds a $300 doc fee, the actual selling price is $20,300.

Astute buyers recognize this and adjust their offer accordingly.

One other comment, buyers need to be aware of published prices like TMV, and True Car. TMV is an average price which, by definition, means half of buyers pay less. True Car, on the other hand, sets prices hand-in-hand with dealers. Would any dealer really offer its lowest price at that point? Also, True Car receives a "fee" from the dealer, which I think is $300. Why let that $300 go to True Car?

ken117

Spot on comment about True Car and Cars Direct. Having bought six vehicles, not all for me, within the past three years I have had much experience with both of these services. True Car used to be fairly good but no longer.

One thing I can say for certain, anyone buying a vehicle through True Car or Cars Direct has left serious money on the table. As an example, the last vehicle I bought, six months ago was an Acura for which I paid nearly $2,000 less than the True Car price at the time.

People buying a car must have as much knowledge as possible. People should pay attention to the prices posted on Edmund's forums. Seems many people like to question those prices. I suspect many of those people are affiliated with the dealer in some way. After all, if a person does not try for the best price one will not achieve the best price. Even if a person cannot achieve the prices posted, that person knows he/she at least tried.

vgx

Good morning,

Wanted to get thoughts on how dealers price their demo units. Working with BMW on a 2012 X5 at the moment and it turns out the owner of the dealership has put almost 8k miles on it. They want to sell it around 2012 invoice cost, but I feel like this should be a used car negotiation or we should at least be discussing a discount from invoice per mile.

Anyone have luck in getting a dealer to come off the ridiculous new car cost when the car has obviously been driven this much?

Thanks in advance!

qbrozen

I would first confirm that it was never titled, and therefore the warranty would last for 4/48k from date/miles of purchase.

And if this is the case, it isn't technically a used car. Although I agree with you from a negotiation standpoint that it should be treated as one (although I probably wouldn't use the term "used car" when negotiating).

Right now, as a trade-in, it would be worth something like $4k-$5k under invoice (assuming an X5 35i premium, for example).

stickguy

You can always use the lease mileage charge. Probably .20-25 cents/mile? so figure 2K back off of what a leftover 2012 would go for with no miles.

For me, I would negotiate hard on a 2013, to get a real bottom line, then figure at least 5K off of that price to take a last years model with that many miles (besides, it is "used", and if I am dropping 50 large or so, I want it untouched!)

vgx

Wanted to follow up on this. We backed off of the 12 because it just didn't jive for us paying even slightly under invoice for such a used vehicle. Too much can happen in 8,000 miles for me to feel ok dropping that much $.

Definitely appreciate the insight though. We'll look around at 2013s and bide our time until the deal is right.

Thanks!

55396

We are looking at a 2012 528i 4 cyl tturbo RWD. 3800 miles. Window sticker is $54,2xx and the asking price is $42,900. This is from the dealer loaner fleet, titled in May? Whatcha think? Excellent discount, but I also saw a 2011 6 cyl with 28k? with an asking price of $36,900. I assume one could buy it for less, figuring sales tax etc, I could possibly take another $10k hit on the discounted 2012 in a year. Good grief, what would it be if one buys new?

igozoomzoom

I have finally talked my Mom into getting a new vehicle to replaced her high-mileage (135k) 2007 Ford Explorer. I'm pretty sure that she has decided on a 2013 Hyundai Santa Fe Sport. I think it's a great fit for her needs and the long warranty coverage is reassuring.

Carmax and local dealership that buys used cars have both made offers that are far below what the pricing guides show for trade-in value. After adjusting for the high mileage, all of the pricing guides (KBB, Edmunds, NADA) show the Trade-In Value as $8200-$9,900 in Good to Very Good Condition. It is in Excellent condition, but Carmax only offered $6,100 and the other dealer offered $6,500). If we can't get at least $7,500, I plan to sell it privately.

She will be paying CASH for the new car, which I plan to keep quiet until after we've negotiated the vehicle price (and trade-in, if applicable). I had to explain to her why paying cash does NOT improve her negotiating power because dealers make a profit from financing.

Any advice on how to deal with these two situations? My plan has been to tell the dealer that we aren't sure whether we'll be trading-in the Explorer, but we'll let them appraise it and see what they have to offer. As for how we'll be paying, I really hate to lie, but I think we say should say that we haven't decided. I'll tell them that we have been pre-approved by her credit union (she has a credit score of 720+) and we'll see what they have to offer. Then if we pay using Cash, they won't know the source of those funds.

Any thoughts or suggestions?

stickguy

I agree about the trade in. That is what I did. Negotiate on the new car, and when done, see what they offer on the trade. I just tell them that I am willing to go either way, but that I am negotiating the price first on the new car, so you will get a true wholesale/buy figure, not a shell game!

for the money, I think you are worrying way too much about it. They don't really care that much on the floor. So if they ask, just tell them you have not decided, and that once you are set with the deal you will see what they have to offer. All that question really does IMO is let them know if you are a payment buyer. Once they know you aren't, the price should be the price.

stever

A reporter would like to speak to someone who is going to be in the market for a new car in the next few months because their lease is expiring. If you fit this description, please email your daytime contact info to pr@edmunds.com by Friday, January 25, 2013 at noon PT/3 p.m. ET.