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How much should I pay for a new car ? How to negotiate ? Need some tips. Car buying Experience

sandiego12345sandiego12345 Posts: 3
edited December 2015 in Honda
Hi all,

I am sharing my car buying experience with all , hope it will be helpful to those who are thinking of buying a new car.

I live in Orange County California.
Car purchased on December 28, 2015 : 2016 Honda Accord EX with Honda Sensing, White Exterior
MSRP on this car was $28115 and dealer invoice cast was $25777
Price paid $24000+ DMV and Sales Tax = Total OTD -Out the Door $26300.00
I don't have excellent credit, but I was able to get %2.2 for 72 months from a credit union.

My experience sharing with potential car buyers:

Online research helped me a lot to select the car I wanted and to get the right price. I read many forums. I am trying to return favor to online community through this comment.

I was doing online research for long time almost for 4 weeks. First up all I wanted to buy a 2-3 year old used car to save myself from big hit of depreciation cost which happens mainly in first 2 years, but then I wasn't able to find a car with all recent safety features. So finally I made my mind to get Honda Accord with Honda Sensing Features. I found these features are very cool and I am amazed to know how useful they are just after driving about 250 miles.

I didn't wanna spend another few thousand dollars to get Touring or EX-L trim, I found EX with Honda Sensing is 'Value for Money ' package.

Before settling on Accord I test drove many cars which were in my budget.

On Truecar.com best target price was $24554. My target was to get a deal better than that.
I read and experienced all dealership's strategies, marketing tactics.
In beginning , I visited neighborhood dealerships tried negotiations, but was worthless.
Dealers makes most of the money by selling you financing through them, by selling extended warranty , GAP insurance and selling(forcefully selling) accessories.

I have seen dealers charge anywhere from $500 to $1000 just for aftermarket alarm security system. After you buy car you can get this system fitted in your cars for way less money. They try to sell you wax polish packages, now a days factory paintings is so state of the art, I personally dont think it is important, at least not at expensive price from dealerships. Their GAP insurance is always very expensive, I got one through my Auto insurance provider for $15 per 6 month.

Anyways if you still want few useful genuine Honda (factory) accessories, you can always buy them later from any dealerships at discounted prices later, look for coupons on their websites under specials. Or just send emails to parts departments get quotations, ask for discount, and compare quotes.

Most of the dealerships want you to invite you to store instead of giving you upfront quotation by using their marketing tactics , please don't fall to their tricks , be a strong buyer, your goal should be save your hard earned money. They try to focus on monthly payment, instead you should tell them I am focusing only on sales price nothing else, do your monthly car payment calculations on google.

My advise to potential buyers:

When I decided I want to buy 2016 Accord EX with HS , what I did is went on autotrader.com, cars.com and carsdirect.com entered the car, trim level and color I am looking for. I searched for 200 miles radius around my residential zip code. I found as many as apx. 50+ cars were in stock at different dealerships in Orange, San Diego , LA , San Bernardino and Riverside counties.
Then I sent emails/messages to all these dealers through cars.com and asked them about my target price.
I started getting email replies to my inbox within few hours. Few dealerships sent me there internet pricing with there terms and condition in smallest fond size.
I went and visited one of the dealership which is about 40 miles away from home, found out they were playing games, when I went there they told me they did a mistake and accidentally quoted me different car, then finally agreed to honor the quote of $23500 but at condition to finance through them (Honda Financing) at ridiculously higher Interest rate, obviously I walked out of the dealership.
Then I came home and emailed these dealerships who had this particular car in stock, about written quote with OTD pricing on it, clearly told them I will not buy any extras.

I got 3-4 competitive quotes around $26300 OTD (~$24000+ tax and dmv) pricing in writing.
So on Monday 12/28/2015 I drove into one of the dealership who gave me $24000+ tax and Dmv quote.
Car had 2 miles on it, test drove it for 1 mile. Saw sticker had $995 alarm system added on it, told clearly to salesman that I am not gonna buy any extras. He said he will not change his words and there will be no surprises. Went inside after test drive. He printed the numbers on paper. The price he presented was exactly same as we agreed through email conversation. I signed the papers and option contract paid my down-payment through card. I reached at dealership at 7 pm and I was out with my brand new car at 8 pm.

(They took my signature on paperwork which says aftermarket alarm system $995 is disabled, but Honda remote lock should be good enough for me, or in future I might buy one aftermarket security system for around $200 (I already looked online) or will find a way to enable the aftermarket system which is already fitted on the car- If anybody know to enable it, please let me know)

On next day, I emailed scanned purchased contract to the credit union who approve my auto loan, they prepared a check and mailed by overnight service to dealerships.

So I advise to secure your own car loan through your bank or credit union etc. Car dealerships always try to sell you expensive financing at higher rate , that is one of the way to make money for these dealerships. Do not buy any extras, politely say 'no extras'. I had Hondas and Toyotas before, they are reliable cars so personally I dont think extended warranty is worth it.

I advise all potential buyer to do car price negotiation same way, as I did. Or suggest me any improvement.

I hope my experience and advise will be helpful to online community.

Regards,
A 29 year old man living American Dream
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Comments

  • steverstever Posts: 52,457
    edited December 2015
    Aftermarket car alarms are often nothing but electrical trouble (I even had issues with a dealer installed OEM alarm). If an aftermarket alarm is installed on a car, even if it's "deactivated", I'm likely to pass on that car.

    It's a good idea to get your own financing lined up but then invite the dealer to beat your rate. Often they can (and sometimes incentives are conditioned on using the manufacturer's financing).
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