Purchasing Strategies - Questions & Success Stories

fredvh

I have always read that 3% above invoice is a good indicator. Of course, the time of the year and each specific model determines the real price. Try to find the TMV on edmunds.com for your specific vehicle and area and see what figure they come up with. If you need help with this ask the host.

manamal

It depends on the car. If it is 'hot' right now (such as an '06 Civic SI), MSRP or higher may be appropriate. Less popular cars will be cheaper.

raybear

Sounds like a hot product, is it selling at MSRP? What's Edmunds say others are paying?

drumm9

Why is negotiating Final Price better than negotiate Monthly payments? I mean, if one negotiates low monthly payments with the term (34 months, 60 months, etc..) one wants, wouldn't I pay less for the car in the long run? (provided I get the monthly payments I want). But it seems that everything I read indicates that it is better to work on the final price.

I'd appreciate some advice from savvy negotiators.
Thanks

wlbrown9

If you go prepared, it does not matter too much. For example, you should have notes (or a calculator, computer, etc.) that show what payments would be based on interest and term/length. So, if you know $1000 @4.9% for 60 months is $18.83, you can figure that financing $20,000 would be roughly $376.60 (loan calculator actually came up with $376.51).

So, you are in dealing for a purchase and the sales guy keeps going to payments and comes back with a figure that he claims is about the $20,000 but has the payments at $425/mo your know they are probably trying to slip in something else to pad the sale...this example would show $2575 more in the deal somewhere, extended warranty, paint protection, whatever. Or if they come back and meet your goal of payment for $375 month and you get in the F&I office to close the deal and notice that is for 72 months instead of 60 months as you told the sales guy, there is an extra $3414 in the deal...wow, how could that mistake happen.

When I bought my Trooper in 2000, I went through at least 2-3 hours of this. I knew pretty close what the sales price of the Trooper should be, within a $1000 what trade-in should be on my '95 Rodeo and what payments would be on the reasonable difference. Since I wanted to finance for 60 months, I knew within $10-$15 per month what I would be paying on the deal...ended up with payments of $433 for 60/mo. Sales guy kept coming back with $525/ month, then $473 /mo and I kept telling him where he should be able to get based on Trooper selling for $xx,xxx which is $300 over invoice, less $x,xxx for trade, less $x,xxx for rebate, plus tax, tags, etc. So, at that point it was hard to tell what they were actually figuring in...too little for Trade? Too little discount on Trooper? Figuring 8.9% interest financing through their 'best' bank instead of the 4.9% I could get through my credit union. That extra 4% would mean $30-50 per month on a 60 month loan in the low $20,000 range.

Main thing is that you get all the info you can out of what they are offering and then you can deal either way. And beware when you are signing the papers in the F&I office that there has not been a 'misunderstanding' as to what you agreed to vs what you are signing for in the contract.

bobst

In general, Drumm, it is better to keep things as simple as possible. Otherwise, a tricky salesman can get you to pay more money than is necessary by tacking on hidden fees. That is why some of us like to offer out-the-door (OTD) prices that include ALL fees.

If you are going to pay monthly, then you should determine a price you are willing to pay and how much that comes to per month.

For example, assume you plan to offer $20K OTD and have $2K as a down payment. That means you will borrow $18K, say for 36 months. That comes to $500 per month plus interest, so that means your payment might be $560 or so per month. I suggest you figure this out before going to the dealer.

Of course, the dealer might offer you a payment of only $500 if the loan goes for 48 months. This means you will actually be paying $24K for the car.

In short, when a tricky dealer starts discussing payments, it can get confusing. When you get confused, you end up paying more money.

bobst

"When I bought my Trooper in 2000, I went through at least 2-3 hours of this."

Some people know how to enjoy life. I'm super envious.

drumm9

Thanks for that explanation wlbrown9. It sounds like doing your homework (get info) prior to going to the dealership is key. Thanks for your reply

wlbrown9

Not a fun week until I finished buying the Trooper. I had my eye on a Trooper at another dealer... Isuzu corporate turn in. They kept delaying on getting sales price, could not find the keys, etc. So I went to the other dealer and started dealing on one of their Troopers, different color, new instead of Demo miles. I was real close to walking out of that dealer and driving (well, maybe calling the dealer in Nashville to make sure of stock, etc.) and driving 200 miles from Memphis to convince a dealer to SELL ME A TROOPER.

The older I get, the less tolerant I am of misleading screamer ads, BS games of 'could you go $XXX payment, etc. When we bought the Envoy XL in 2004, found out we qualified for GM Supplier pricing. Had just about decided on vehicle, okay here is the price, trade-in offer decent, no DOC fee, matched Credit Union financing...no BS and still got a good net deal. Much easier to deal with.

Coached my mom through a purchase on a Buick last year after finding one in stock about 45 miles from her home. Told her what I thought they could do based on invoice, any rebates, trade of her old vehicle. They would not close the deal...until she was getting in her car to drive home. She said the sales guy came wandering out and said they had decided to do the deal for what she wanted. She probably was more patient than I would have been, but she is 88 and retired..has more time to spend on these things than I do :-)

Good day

Bill

drumm9

Arrgghh..! thanks bobst. I can see how a manipulative dealer can get his way once he starts discussing payments.

wlbrown9

Well, you have to watch all the way through no matter what. I was helping my step-daughter negotiate a purchase a couple of years ago. Ended up with a Rodeo. Almost did a deal on a Mit. Galant. The dealer would have had to bring it in. During the dealing the sales guy ended up putting a second sheet of paper on the 'scratch' pad we were using to go back and forth. There was a $1000 rebate and we were going for about $1000 discount which would have been within a couple of hundred of invoice. Came to agreement and signed some paperwork...had taken several hours and were doing this after work on a Friday...F&I guy or maybe it was the sales manager was tied up in another deal so we end up there much longer than planned. Got to thinking about it later and went back the next day. Turns out the $1000 discount had gotten left off so the deal had gotten written up as pretty much a MSRP-rebate deal. We undid that deal since there was no delivery and it was not final. Of course the sales guys denied that they had tried to pull something, but both step-daughter and I agreed on what they had tried to do with the second sheet folded that disappeared. So, do NOT let your guard down until you have checked EVERYTHING at your closing.

Reminds me of when we finished the Envoy deal. That F&I guy had to video the closing, signing, etc. I think that must have been the result of some lawsuit, but I don't really know the details.

rroyce10

... **That F&I guy had to video the closing, signing, etc. I think that must have been the result of some lawsuit, but I don't really know the details ... **

Lotsa dealers are doing it nowadays ...

You'd be amaaazed how many "customers" remember their pay-off was $7,500 when it was really $10,500, or they "think" they make $4,500 a month when they really make $3,200 or maybe they forgot that divorce they went through last month and they have $900 in child support and 2 unpaid mortgages, or perhaps they forgot their was 2 names on the existing loan and they forgot to tell the Mrs., etc etc, etc etc ........ happens everyday.

Then you wonder why dealers are using a video ...?



Terry

bobst

Do the same dealers videotape their mechanics working on our cars so we can see exactly what they did or did not do?

stkntraffic

I know exactly what you're talking about. I was buying a car for my wife some 7-8 years ago... Same thing, agreed on a price, blah blah blah, we were waiting for hours on end, finally signed the paperwork and drove the car home just to get out of there.

Started looking at the papers later on that night, realized that the price was $1000 higher than we agreed. I took the car back to the dealer the next day, talked to the general manager, and he gave me my check back.

I guess I was lucky, maybe they could have stuck it to me, but they already had a number of complaints about that particular salesman.

I'll tell you that taught me a lesson, thankfully early in life, to double check EVERYTHING you sign. A little paranoia is ok when it comes to financial dealings.

drumm9

Damn that's unbelievable.. Well thanks for all the replies. I am thinking on going for a new car later this month with a MONTHLY payment with a TERM in my mind rather than out the door pricing. One thing I have on my side is that my car runs great. There is nothing wrong with it. So I really don't need a car, I just want to see If I can get a new one with the term I want.

Right now I am just doing a lot of research on a realistic monthly payment I can get.

wlbrown9

May be overkill in some cases, but the issues are on both sides. There have been several lawsuits in the Memphis area (at least a couple of dealers) that have brought up problems with the sales side. I don't remember the details of any of the cases, but a couple of dealers did not come out real well.

I realize that a lot of buyers will have 'issues' to deal with that could cause problems for the dealers.

Main thing is to do your research, triple check everything BEFORE signing anything. :-) If you get confused or don't understand something, back off until you can find out what the deal is.

Good day folks.

Bill

bobst

After you agree on a price, the salesman might add on $400 or so for a 'dealer processing fee'. If you are surprised and question it, he may point to a sign on the wall (way up high and above the normal eye level) that says they add a $400 fee to every transaction.

That's why some of us like to make OTD offers only.

wlbrown9

Yep...but usually that comes up when you think you have already made the deal and the F&I guy starts printing out the contracts for signature. "Hey, we charge that on all our deals. See, it is preprinted on the sales contract and I can't change it."

The sales guy has done his job by then to get you to sign the offer sheet and go into the F&I guy for closure. You could open negotiation again at this point or walk... Best just to make the OTD offer or at least inquire about fees and such before you agree to a 'deal'. I like the OTD offer in that it simplifies the deal for the buyer.. Confusion will probably cost you money or at least make you mad.

rroyce10

.. **I don't remember the details of any of the cases, but a couple of dealers did not come out real well. **

They never come out "real well" in those situations .... they're the big bad monster that's trying to make a profit on a $10/$20 million investment, heaven forbid the profit is made on you ....

What most folks forget to add in OTD prices is, little things like the pay-off, or they subtract the payoff from the value and use that as the difference figure .. dealers spend HOURS, I mean even days trying to explain basic math to most folks, most buyers might not get it til' they're at the 2nd or 3rd dealer .l.o.l... .. then the tax is thing is based on their county, *not* the dealers .. then they want the dealer to pay that extra 1%+ because they forgot to use it correctly.

OTD prices are fine for folks like you and Bobst, you're intelligent buyers, plus you can add and subtract ... now, if you can get the other 20 million into that program then 95% of these issues would never come up ...



Terry.

mikefm58

" now, if you can get the other 20 million into that program then 95% of these issues would never come up ... "

Amen. I am amazed at the number of college educated people who can't handle even their basic finances. We've hired college graduates recently who are out the ying-yang in credit card debt from graduation day.

mikefm58

I prefer the bobst method of OTD price offering. As long as you know the going rate for the vehicle and the TTL breakdown, it keeps things much simpler for the buyer. And get pre-approved financing before going to the dealer.

jmurman42

"My thoughts exactly!

From my viewpoint, I am constantly amazed at the pain some people will put themselves through when they buy a car.

Most dealers will round can "blast faxes". We get dozens of these a week usually on the same form letter that must be somewhere on the internet.

The "fleet manager" is usually just another salesperson with more experience than most. I have often been tempted to ask..." Oh, how many cars will you be needing for your fleet?"

Blast Faxes do get read...and we keep them but since they are ALL the SAME, there is no need to now.

I say they are read, but the reality is that they are responded to in the same manner as any Internet Inquiry would be. The only difference is that with an Internet Inquiry you can acxtually get a closing ratio. With Blast Faxes there is NO closing ratio...worthless.

isellhondas

Wow...you are responding to a post I left over a year ago.

My opinion of Blast Faxes hasn't changed. We don't get as many these days but they are totally worthless.

british_rover

We got one of those from someone where in NJ not long ago looking for an LR3. Basicly we are faxing all dealers in the tristate area whoever gives us the best deal will get our business.

I wanted to fax them back with a good luck Land Rover dealers, for the most part, can't sell out of their market area so your best bet is to just go to your local dealer.

sbell4

You would be amazed at how helpful this is to all involved. If there is ever ANY question at all about ANYTHING said or promised it is all on tape.

cdguess2

Need some advice... I'm faced with the option of purchasing a new 2006 F-150 SuperCrew Lariat 4x4, or a new (last one on the lot) 2005 F-150 SuperCrew Lariat 4x4. At face value, one would think that I can cut a much better deal on the 2005 (thinking that the dealer wants to get rid of last year's model), but I'm uncomfortable with buying something that's already a year old (with commensurate devaluation). Yet another option would be to wait until October for the 2007 model. Which option is best? Should I price out the 2005 as a "used" vehicle with 100 miles on it, or what? Anyone else faced this dilemma?

british_rover

If you are going to keep the truck for more then 5 years from date of purchase then I would get the 2005. But if you are one of those people who is trading out of a vehicle every 2-3 years then get the 2006 model.

cdguess2

An update: Dealer is offering $10,000 off $40,695 MSRP for the 2005 model. Kelley Blue Book says the 2005 model (priced as "used" with 100 miles) is worth $33,460 Retail, $29,495 Private Party, or $25,700 Trade-In. Sounds like a pretty good deal to me...

isellhondas

Bad color? Manual transmission...something has caused it to remain unsold.

Cars that don't sell well as new cars can be impossible to resell later as used. If this is the case, this could bite you later when you go to sell it.

windycity2

Last year I bought a brand new 2006 Toyota Camry from CarMax in Wisconsin(Yes carmax in wisconsin do seel new cars) at a very good unbelievable price.

But I noticed following strange things :
i) I understand that when you buy a new car salesman is support to explain you all the functions of the car. But he didn't do it he just handed over the keys.
ii) At that time salesman said he will call me in a week to findaout my experiences but so far no call(even after 4 months)
iii) There is no communication from Toyota at all. No welcome leetter no customer survey.

What do you think happened? I am suspecting if my purchase is legimitate one? How is that CarMax didn't inform Toyota about it until now?

mikefm58

Are you sure it was brand spanking new and not just a low mileage used vehicle?

windycity2

Mileage when I bought the car is 18 miles. Didn't check carfax history though.

raybear

New cars don't have a CARFAX history...we have several "used" Subaru's with mileage in the teens, bought as "wind-damaged" at an auction.

What did the paperwork say? Is the car new or used, and does Carmax even have a Toyota franchise?

golic

Carmax has a Toyota franchise in Kenosha Wisconsin. Which is about an 60-90 minute drive north of Chicago.

In fact, when I was looking at the Highlander, I went to there Schaumburg location (just outside of Chicago) thinking I could purchase the vehicle from Kenosha and have it transferred to Schaumburg.

But since the Schaumburg facility is on the same street as another Toyota dealership they cant transfer new toyota's so I would have to drive up north.

And there no haggle on the Highlander was high, IMO.

jmurman42

Here is one possible scenario.

Don't take this the wrong way...if you were a pain in the a$s customer, then the dealer could have very well RDR'd (registered with the mfg)under an incorrect address, email address and phone number.

The car would still show under your name, but everything else could be off by one digit and you'd never know about it.

It is one way a dealer can avoid having a bad survey.

stickguy

I bought a new Accord back in December, and never received any kind of survey from Honda (mail or phone call, not even via email). I was kind of surprised, but that's life.

subdude

I recently bought a Ford Escape Hybrid for $200 over invoice. I pretty much followed the bobst method - did my homework, had cash in my pocket, made my offer, and stuck to it. The dealer made a relatively token effort to bargain me up. I (politely) stuck to my offer, and got what I wanted. In addition to a very good deal (compared to the TMV price), I retained my integrity in the process. I don't lie in other areas of my life, and didn't need to do so to buy a car. There's a lot to be said for that.

british_rover

Good for you. I hate when people throw me obvious low ball offers and then with just a little bit of prodding back away from it.

Obviously you just wanted to see if I was sleeping and would give the car away cause if that was your real I will only buy at this price number you would get up and walk away.

kyfdx

This is the semi-bobst method..

If it were the full-bore bobst method, you would have immediately risen up out of your chair and walked towards your car, as soon as the dealer said any word but "Yes".

I personally like the semi-bobst method..

guss

How many keys did you get?

Anything less than 4 and bobst would be disappointed.

mikefm58

" How many keys did you get? "

Yikes.......Don't go down that road.......Please????

mikefm58

Good for you......That method is so painless and easy for everyone involved. Speaking to the sales folks politely but firmly works wonders.

bobst

Action speaks louder than words, Mike.

When the sales person knows we are leaving, the time for talking is over. They accept our offer or decline it. Very quick and painless.

mikefm58

I usually give them one more chance to accept my offer. If they call me back in later and try to accept it, the price goes up $100, which I've already told them before the one last chance offer.

You should patent this method. From reading about the Blackberry case and "patent trolls", anything can be patented.

kyfdx

Some company actually patented (copyrighted?) the name "Washington Nationals", and has filed suit to get them to pay royalties...

Major League Baseball says if they lose the lawsuit, they will just change the name of the team... they will never pay royalties..

Unreal..

mikefm58

Oh, to patent a name is nothing. Think I'd get sued if I started a website that has to do with cars and called it Edmonds.com?

Here's an interesting article.

http://news.com.com/Rise%20of%20the%20patent%20trolls/2010-1071_3-5892996.html

Sorry for going off-topic, no more from me on this.

jenrn

I am in the process of purchasing a new 2006 Nissan Altima 2.5S, with the 2.5s premium package and the 2.5 special edition package. Nissan's website gave the msrp price of $22,455, and the sticker price of the vehicle was $22,416.

After negotiations we were able to get down to a base price of $21,916, with $3,500 down, interest rate at 3% for 60 months. This is making payments $356.62, including tax.

We were unable to complete the deal, due to dealer not having the vehicle of our choice on his lot, however I did sign the finance sheet, and gave him $100 deposit, so he could "source" our new car. He told us he would have it in by Friday (today), if not sooner. Well, here we are and he has no vehicle, and said he hopes to have one on Monday, but not sure.

Questions:

1. Does this sound like a reasonable deal, or do you think I could do better.

2. Is this the OTD price, or will there be other fees involved once I go to finance.

3. Should I negotiate for a better deal /or/ options since the car wasn't able to be delivered as he stated.

I could always go to another dealer in our area, which after research, I found has the car we want on his lot.

This is my first car purchase, and my husband is not giving me any help, and I have been the one negotiating the deal. The dealer told me he was impressed with my bargaining skills, but probably just to make me feel good about the deal.

Any help or info would be great! Thanks!

golic

Why did you even go to Finance when there was no car available?

With your payment terms you stated of $356.62 for 60 months at 3% that means the loan amount is for $19,846.74. With $3,500 down then the total due on the vehicle is $23,346.74. Not sure if you had a trade, note pay-off etc....

To me, until there is a car there is no deal. So, if your heart is set on that car keep looking for it or you can wait if he finds it.

Since he can look up inventory either he can't find it OR a dealer that has it wont do a swap.

jenrn

The payment includes tax, so would that change the total due on the vehicle, or amount financed? There is no trade or payoff, only the $3500 down cash.

We haven't gone to finance yet, only talked about figures, and I did sign the sheet which had the negotiations listed. The dealer said today that the first car he found was a demo, so he declined that one, and the second one the dealer wouldn't do the swap.

golic

Based on what you told me, then my number was your OTD (out the door price) which includes taxes, title, doc, transfer fees.

Well at least you know another local dealer has the car you want *grin*