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Purchasing Strategies - Questions & Success Stories
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There are cars where demand is high and Inventory is low and dealers have the ability to not only hold out for MSRP but can get not only over MSRP but can really pack on profits by throwing on dealer options.
The Odyssey has been a good example, back in 2000 and again in 2003. Land Rover and many others.
You can have the best research known to mankind, but if demand is high and supply is low, your negotiating is going to be as successful as shopping at carmax.
OTOH, if you are patient, socal has mentioned where you can find inventory reports and watch when perhaps your car is slowing down (ie: SUVs in May, Convertibles in January) and even use end of month, quarter, year to your advantage when a dealer will often focus on volume over profit.
I absolutely agree with and acknowledge that. Again, I'm just pointing out that there are very, very few cars to which this applies. For most vehicles, supplies are ample enough that demand is easily satisfied. Certainly not true for a Toyota Prius or possibly even the Honda Civic (very limited inventories at the moment), but your typical Camry / Accord / Altima buyer shouldn't have much to worry about.
Here's an article from CNN and Edmunds showing the current crop of hot cars: "Toyota tops hottest cars in America" (Thanks to poster Clethro for providing this link on another thread.) In large part, I would expect most of these cars to be difficult to negotiate very far downward, if at all, and prospective buyers might want to consider whether paying top dollar for one of these is a good move when in many cases, rival products can be had at a discount.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Market conditions determine prices. They example of a hot car is just proof of it. High demand raises price, low supply raises price. Fortunately with most cars supply and demand are more in line with each other which reduces price. The fact that there are alternatives to most cars further reduces the price.
While you are correct that there is no single market price for a car the same can be said for almost any commodity. The example of you paying $100 over invoice while some one else pays MSRP would be equivalent of saying Joe bout a can of soup at the Piggly Wiggly for 45 cents and you bought the same thing at Kroger for 43 cents. fact is as with just about anything there is a range that a car can be bought and the vast majority of buyers pay within this range.
the vast majority of cars are produced in large enough quantities that concerns about supply and demand aren't important to the buyer.
Oh its still important.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
just kidding
The problem with some of these is that you're not always getting the full story. We would have customers who would run down the road to another Infiniti dealership to buy their car because the "over invoice" price was so much better. Having a buddy who worked there I knew that they were paying up to $1200 for window etching, mop-and-glo, floor mats, trunk mats, wheel locks, etc. All stuff we didn't put on. But as far as the buyers were concerned their negotiated price was $200 over invoice against the $800 over we asked for.
It's difficult to objectively compare deals when factors (trades, credit score, etc.) vary so much from person to person. Also, remember that the TMV is the average paid. The spread of prices is unknown.
2018 430i Gran Coupe
1. People embelish the real cost they paid *nodnod*
2. You only see the new car part, exactley what cluedweasel was saying. They could have gotten undervalued on the trade or did not get the best interest rate.
I think one should look at those boards as an unscientific sample. Focus on:
1. Cars with the same model, trim and options that you are buying.
2. Focus on your region.
3. Use the old style of Olympic scoring. Throw out the highest and lowest price paid and focus on the "range" of prices paid.
4. Compare that range to Edmunds TMV and Invoice.
I usually try and come away with not so much a number but an idea of where the car is going for. Are people buying at or below invoice, TMV, or MSRP?
-**1. Cars with the same model, trim and options that you are buying.**
Where the dealer and customer seem to lose each other is when the customer wants to compare: (example only) a Kia Sedona, and lets say a Toyota Sienna ... not only do we have the quality difference, but there's a huge price difference ... they need to compare apples to apples.
But like I mentioned before ... the big slide starts when they came into buy an ABC vehicle for $25,000 and now they've shifted gears to the $32,000 vehicle parked in the showroom .. and this happens all the time ....
For the folks that do their homework, know what they want and have done the math, they already know they won't/can't spend that extra $7, 000 because it doesn't meet their budget ...... for the folks that don't do the homework and the math -- well .. they get aggravated and usually go down the street and buy the $32,000 vehicle anyway ... but regret it for the next 4 years, it's a human nature thing ...
Terry.
I just moved to DC with a big-[non-permissible content removed] Dodge Ram 1500 Quad Cab... and parking is driving me nuts. It's not that I don't know how... it's that this town isn't made for big trucks!
So I have a dilemma. My truck has about $10K in negative equity (ouch!) (that's 'cause I leased and the residual value is KILLING ME!) I need a small(er) vehicle. I'm really not a car person (I hate being low to the ground). But as it is I hate driving anywhere in this town because I'm afraid I won't be able to park when I get there, or when I return home. A car would make life much simpler.
My other dilemma is that I'm very spoiled. If I'm going to get a new car, I have a list of "I wants"... I want leather I want a sunroof, I want navigation, I want satelite radio, oh, and hybrid would be nice.... ya know -- all the things that jack the price up!
So here's what I'm turning to all of you for... I need you to put your collective knowledget together and guide me in the right direction.
I have $10K in negative equity to hide. Where do I hide it? How can I hide it? (All the cool vehicle manufacturers don't give incentives! How do I find the substantial incentives?) Any vehicles y'all can suggest that will give me the list of "I wants" without jacking the price too high and still come from a manufacturer that can provide the incentives that can hide the negative equity? I do have a cap on cost of course, and $10K of negative equity hurts the Loan-to-Value ratio for financing... so it's REALLY important to hide that negative equity!
The other option is to wait 18 months (and hope the truck doesn't depreciate any more). But by then there will only be 6 months left in the lease.... wooptie doo! I'll have no hair left by then. Try finding parking in this town... then try parking a Quad Cab pickup in it and see how much hair you have left!
Thanks y'all for the help and advice!
You have 2 options ...
1.) put some major cash down (which I *don't* recommend.!) ...
2.) keep it til' the last 6/8 months and use Chryslers early-out program and save the big $$ ...
Think of it this way ... with the money you save ~ you can get a hair transplant
Terry.
It is one thing to "spoil" yourself, it's another to "soil" yourself in the process.
At the end of the lease you will be everything other than upside down. If you roll that 10K into your next car and it sounds like your budget is tight as it is, you will spend the next 5+ years trying to dig yourself out of the negative equity hole.
Deal with the parking, find a solution and in ONLY 2 years both the CAR and the 10K will be gone.
You have a few options:
-Try to find someone to take over your lease. You might want to put a few feelers out, and see if you can get any bites.
-Terminate it early.
-Live with it.
The first option is highly unlikely to succeed (although it might be worth investigating, don't get your hopes up), and the second one probably makes absolutely no financial sense whatsoever, which means you'll probably be best off with the last choice.
Remember: it's just a car, don't let it to become a vanity item that destroys you financially. If you don't like the cost of filling it with fuel or the hassle of parking it, then find yourself a cheap old beater, use mass transit, rideshare or otherwise find another mode of transportation that you can use to serve your needs.
Unfortunately, if you sign a lease, then you have to be prepared to live with its provisions, including the length of the lease term. Don't "spoil" your financial health over something like this.
LeaseTrader
SwapaLease
Good luck!
PS. Woohoo Post #1100
I must concur with everybody but Rover - stay with the truck until end and then DO NOT LEASE AGAIN. Leases are generally OK on luxury vehicles with high residuals and good only when the manufacturer supports them with some subsidies (low money factors and/or inflated residuaals). In most other citcumstances, despite appearance of being cheaper (lower monthly payments), they are generally more expensive on long run (total two 36-month leases and compare with one full-term 5-year loan of comparable rate and subtract car value after 6 years and you you get a rough idea). Rich people lease because they can afford it, poor people lease because they think it is cheaper. "Normal" people usually pay cash or take a loan (they will try a lease once or twice and never again). I leave up to you to define rich, poor, and normal.
2018 430i Gran Coupe
Well, you certainly don't lack a sense of humor.
By the way, I think the others have given you some very good advice.
1. Get yourself a beater for 3 or 4K and drive that to work for two years. You can use the Monster Truck on weekends to impress girls. However, you’ll have to drive at least 50 miles south or 100 miles west to find such a girl. :P
2. Use Metro to commute to work, just like everyone else. It’s nuts to drive into the city in rush hour in any car, much less a Monster Truck. If you don’t live close to a Metro station than move. It could be cheaper to find a place on bus line that will take to a Metro station. One thing you might want to consider is to move out into suburbs where you can rent an apartment or a townhouse with a designated parking space, and drive to a Metro station parking lot in the morning.
3. Change your work schedule from 5 A.M to 1 P.M. That early in the morning you might be able to find two parking spaces next to each other for your truck.
Seriously, if you insist on living in the city and park on the street, don’t buy an expensive car. It will look like a beater in three year, assuming it won’t be stolen before than. Just take a look at bumpers with DC tags; they’re all scuffed up.
A second cheap beater car... That's what I was gonna recommend.
Do not be afraid of leasing, leasing when done properly is a great way to go.But it is only good if you go the full term of the lease.
As for your situation, some people might recommend to trade it in on a car and go into a conventional note so you can be buried for 5 or 6 more years? I do not agree.
I would research, some cars and get into something that has a high residual, and short term lease specials.(Like a Japaneese, or German Car)
Be prepared to put some cash down, to reach your desired payment and to get rid of some of that neg equity. Most banks will lease 120-130% Of MSRP so it depends on what the mark-up is the car you are looking at. You probably need to look at something that is option heavy because there will be more mark-up for them to work with.
Talk to a finance manager directly once you find out what car you want, so he can work your deal. In your position you do not have to worry too much about the deal you are getting for the car because they will have to strip all the profit out to get the bank to carry all that equity.
Once you find something you can live with, STAY IN THAT LEASE DO NOT TRADE OUT OF IT. Disipline yourself to stay in for the full term to wipe all that neg equity out.
If the Payment is a little higher, remember your fuel costs are going to go down a lot also.
Remember what ever road you take whether it be a purchase or lease BUY GAP INSURANCE!!
GOOD luck and email me if you have any more questions!
I wanted to thank all of you for the help - directly and indirectly!!
Last week I purchased my new vehicle. I had employee price so I already had 4% under invoice, but I still had to haggle my trade-in.
I took all of your experiences and comments and walked in with print-outs of Trade-in Values from KBB, Edmunds, Black Book, and one other site.
The dealer hit me low off the bat and i told him No. Then he countered with KBB - but it was $300 lower than the KBB I brought in, Dealer's response ---" oh, it looks like we forgot some options, there we are, that's right now."
I then showed him my other internet quotes, and told him that I wanted the Edmunds price. Of course I got the "no one uses Edmunds"
I then switched to the "I have to talk to my wife" - he then raised the price $399 - the amount of the doc fees.
I told him we were still about $150 off. I used socal's advise of "playing dumb" and turning his questions back on him. Then I just didn't speak and stared at the numbers. He kept insisting it was a good deal (which it was) but I again told him I'd have to talk with my wife. I tried calling her, but luckily she wasn't available. I just went quiet again.
He said "is she really going to let you loose this deal over $150" - so I replied -"Maybe- you're married aren't you"
After a few more minutes of silence and then him trying to jumble the numbers... which I fought against, he came up to Edmunds price.
I may have been hit a little in the F&I office on interest rate, but I was using $1000 cash back and in three months I will just transfer it to my credit union.
All in all - I got the trade in up $1500 and $500 above my minimum, by using all of your advice (and got the car at employee price)
Again, thank you all. I just wanted to let you know that all of your advice and conversations do help the "average" negotiator!!
Thanks again!
Jef
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I then showed him my other internet quotes, and told him that I wanted the Edmunds price. Of course I got the "no one uses Edmunds"
I then switched to the "I have to talk to my wife" - he then raised the price $399 - the amount of the doc fees.
I told him we were still about $150 off. I used socal's advise of "playing dumb" and turning his questions back on him. Then I just didn't speak and stared at the numbers. He kept insisting it was a good deal (which it was) but I again told him I'd have to talk with my wife. I tried calling her, but luckily she wasn't available. I just went quiet again.
He said "is she really going to let you loose this deal over $150" - so I replied -"Maybe- you're married aren't you"
After a few more minutes of silence and then him trying to jumble the numbers... which I fought against, he came up to Edmunds price.
This is a classic negotiation gambit, which I'll call Deferral to Authority. Basically, you refer to either a policy manual, rulebook or authority figure (whether present or not) as a reason why you are unable to change your position. You use the authority figure as the bad cop in your transaction, who is the reason why you are unable to counter with a different number.
Great lesson here -- don't get trapped into a numbers game, where you feel compelled to always counter one number with another. Instead, counter by questioning the other person's position, failing to comprehend it (even if you understand it completely), deferring to your authority figure (whether that authority is your spouse, your "budget", KBB, Edmunds, etc.), etc.
I'm also glad to hear that you remembered to get your cash back. As noted above in one of my prior posts, dealers often neglect to mention incentives, for whatever reason, so it is wise to do your own homework. And if there is a factory-to-dealer marketing incentive, be sure to reduce whatever price you'd normally pay by that amount, so that you effectively capture that incentive for yourself.
I hope that I helped, and that you enjoy your new car.
Looks like we saved ya some money. That means you're buying, right? :sick:
I too think the information that socala passed along was practical and useful information... that would be of benefit to every "consumer". Can be applied to everything from buying cars...to negotiating for furniture, plumbing, electrical, carpeting, tatoos, and bikini waxings.
I think the best advice out there was "buy a beater." I could easily go to a buy here-pay here or buy from an owner and get some clunker to love until the transmission do-us-part, for when I need to drive about the city and fit into a shoebox-sized parking space.
Sometimes, it is best to bounce ideas off of total strangers. Thank you all for being out there!
Tram
I also live in the same general area (across the river in Alexandria). I'd suggest, like someone else did, you use Metro and the bus system as necessary, and keep your truck parked most of the time at wherever you live.
Also, check with your employer and see if they participate in the Metrocheck program. They might give you either a substantial discount or perhaps even free Metro cards as a benefit of employment. If so, then you really hardly ever need a car at all in the city.
Last night, I swung by the dealer we will be visiting Friday evening to p/u a couple of brochures, and to get the card of a salesperson. I did chat briefly with the salesman. He proceeded to tell me about some of the perks/services that they provide special for their customers, and took some general notes about myself, and the vehicles we are considering - but nothing at all about price, or anything specific.
The salesman did ask me if I would be financing. I told him yes, but that I already have approval from my credit union (true). He asked what my rate was, I told him, and he said that assuming I have good credit, they would probably have no problem beating it. He asked if I had a trade, I said no (true). He then proceeded to tell me that they want it to be a "fun" experience, and want to develop a clientel instead of just selling a car (they are a new dealership). He also said that they prefer the customer come to them with the deal that they need in order to buy a car. We then set up an appointment for Friday for my wife and I to come drive the cars.
Here's my question to the forum...I know MSRP and Invoice on what we are considering. I have never purchased a Honda before, but have purchased many other vehicles. I have also never purchased a vehicle where the dealer expects me to just come with an offer (very much like the "bobst method"). I have a plan in mind, but would be curious to hear from some of the folks here how you would handle this.
May help to know the models your looking at. But generally speaking you should be able to get invoice minus any incentives/rebates. I wouldn't worry about what the dealer "expects" though. He is there to make you happy...not the other way around.
Review the last 30 or so days of this thread there is much much inoformation on it.
1. Review the prices paid forum and note the exact make, model, and trim and your location of what other people are paying.
2. There is a huge debate on who should offer a number first. And my take on this is unless you know the "true" bottom you should avoid offering a number first.
If you are pressed for a number and I don't know what cars you are looking at, the experts on this forum can say what they think about this. If you see the car going for under invoice, then when you are pressed say my "research" shows that this car is going for under invoice...
3. Every Honda I bought I have had to play the "wheel lock" and "mudguard" game. They will want an an extra-ordinary amount of money for this option and have every piece of paper and sworn testimony from their salemans grandma they are not making any money on these "add on that our research shows are customers want"
Hold your ground, don't pay for them, ask them to be taken off the car. Be stubborn and unwaivering. I am 3 for 3 in rather than uninstall them from the vehicle they have left them on for free.
See my early post on the "nibble" if they really are going to take them off.
Good Luck!
I have read a lot of the previous posts, and personally don't like starting with my own #. I typically like to keep my # to myself, let them give me a # and then work down from their # towards mine.
That being said, do your research on both vehicles and get a good ideal of what you should be paying for either car. At the dealership once you decide which car you want let the salesman make an offer. Ask him right off the bad what the asking price is, even if he asks you to make an offer. If the salesman tries to get you to make an offer first stall. Talk between the two of you like you have some ideal but not a definite price. Don't be afraid to waste time, the longer you stall the more likely he will make the first offer.
Once he makes an offer don't counter offer, talk between yourselves and talk to the salesman and try to get him to bid himself down but don't give a price. Don't be afraid to walk, but also don't expect the salesman to come chasing after you either (they might but not always).
After you get your deal and your with the F&I guy learn to say no. Don't let them up sell you, you don't want the undercoating, scotch guard and paint sealant for $800 or anything else like that. I would advise against extended warrantees (you can usually buy them later after you had a chance to sleep on it) and GAP insurance.
Then afterwards take a nice long drive in the country in your new car.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I'd go back through some of the posts above to get your started for the rest. For one, unless the car is very hot, just forget about MSRP, and focus on the invoice. (And if an Accord is one of your choices, you should know that there are a lot of Accord inventories, including a marketing incentive, so these should be available at a low price if you negotiate properly.)
For another, why are you insisting on making the first offer? If you negotiate for minimum price, you should be having the dealer make the first offer, then continue to pull his price down toward yours, rather than you naming the first price which only ensures that you are locking in a price.
As for your actual shopping day, you need to figure out whether you are best off doing your purchase with just one of you at the dealership, or whether you should go together. If you do the purchase together, you should be sure to present a unified front, or else consider having one of you play the role of "bad cop" in a good cop-bad cop routine. (By the way, in the salesperson-sales manager relationship, the sales manager plays the bad cop, so don't think that the dealership doesn't use this method itself.)
But, the way you describe getting a price is the way you want to go about it. Have them work towards your price...not the other way around. Hold out for the counter offer to the very end if need be, lets the dealer/salesperson save face...lets both sides feel good about the deal.
Absolutely good advice. I would hope that one of the lessons here is to have some possible nibbles up your sleeve in order to get that little bit extra at the end. Golic did a really, really nice job with this, a very good case study, indeed.
Just remember Elements are ugly as sin.
Just remember 2wd SUV's have lousy resale values if you are concerned about that.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Yep, I agree that the Element is ugly - but my wife likes it, and likes the idea of being able to haul our dogs in it. She is a hard worker, so far be it for me to be agianst the Element if that's what she wants.
In terms of the CRV, we are looking mainly at the cargo space, but still being able to get good gas mileage out of it. We haven't ruled out the 4wd, EX auto though.
I have done this, but have found over the years that these are to be taken with a grain of salt.
But, I have always used that forum to see the range of where the car is going.
Are people posting that the car was bought above, below or around? invoice? Or is the range around TMV?
That is how I have used the information in the past. As Socala points out, looks like their is lots of factors that give the Element more wiggle room.
Here is something else, I would like to add. Before you start negotiating, decide on which car you want first. I think socala had an excellent point. Drive both cars and sleep on it. Come back and negotiate for the one car you want.
Don't find yourself negatioting against yourself on an Element vs. a CRV. You will lose the focus and my guess is you will inadvertanly raise the bid on the lower cost Element along the way.
I had planned to only negotiate 1 vehicle, not 2 at the same time. I can tell you that within the first 2 minutes of the test drive, my wife will eliminate one, or maybe even both of these.
My plan is to let them quote the first price, and never actually counter with my own #. The beauty of this is that I have 2 reliable (knock-on-wood), paid for vehicles, so this is a purchase I don't have to make - but will if the price is right.
One guy said he got an Accord for $500 under invoice. I was amazed at that price.
We went to the dealer, offered that much, and they accepted.
Besides if a price given in the forum is too low, all that will happen is that your offer will be rejected. So what? How much time does it take to make an offer, have it rejected, and walk out? 10-15 minutes? Big deal.
If you're looking for cargo space you may want to look at a mini van. They typically have much more space and better fuel economy than an SUV.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I struggle with this. And I understand that when you name your price you have set the bottom.
And I have learned about not countering and try to let the dealership counter themselves.
And help me with this. I like numbers so lets go with this:
Honda MSRP $35,000.
TMV $32,500
Invoice $30,000
Let's further say you do your research on the prices paid forum are going from $29,200 to $32,000, but the mean (not the average but the point where there is as many prices above as there are below this point) seams to be $29,500.
So, I give my self a target of $29,300 to 29,700.
So, in my mind I think if I were to use the bobst method I would say $29,500 -lets write it up.
But from a "negotiating" standpoint. My feeble mind says start below my bottom say $29,100?
Here is where I get confused, if your first offer is below your bottom, does it matter if you are first, second or third?
I would appreciate your comments.
I'm sorry, but that is good advice for the dealer, not for the consumer.
As noted above by Snakeweasel, myself and others, it is NOT a good idea to give your "best and final" upfront, it creates a price floor which will only be bid upward. You should get the dealer to name the first number, and then preferably have him develop his own counteroffer as well.
On Purchase Day, these are the points that you would want to communicate, whether directly or indirectly:
-I am ready to buy today if the deal is right, BUT I don't need to buy today
--I like your car enough to buy it if the deal is right, but not so much that there aren't substitutes available -- there are other cars not sold by your dealership that would also meet my needs. (In fact, you should know some of the relative disadvantages of the car that you want, so that you can highlight why a competitor's product might motivate you to walk if a low-priced deal doesn't work.)
-I am potentially interested in borrowing your money. (This makes your deal more appealing, and you can pull the financing off the table after you've already negotiated the purchase price if/when you choose)
-(If you have a late model car that appears to be in good condition and with reasonable mileage) I may want to do a trade-in (again, this makes your deal more interesting)
-I may be interested in some other options, such as LoJack, etc. (Again, makes your deal more interesting, and you can pull these off the table later.)
Giving the salesperson all of your personal details and an exacting listing of needs and wants is a bit like playing stud poker against a guy playing draw poker. Don't lay all your cards on the table when the other guy hasn't shown you anything at all, you really get no benefit from doing this.
Don't rely on a salesperson to educate you about the car, that research and tastemaking should be left entirely to you. And do not get into a mindset in which you are emotionally compelled to buy, or that drives you to think about monthly payments, when a low purchase price with good loan terms will naturally get you the lowest payment available.