Purchasing Strategies - Questions & Success Stories

ddunbar

We're considering the move to a minivan. Honda is advertising their model year end clearance. And Mazda is coming to the end of the line for the MPV.

How, if at all, would you adjust your buying/negotiating strategy to these facts?

How much adjustment are the dealers likely to make to clear inventory?

snakeweasel

How, if at all, would you adjust your buying/negotiating strategy to these facts?

I wouldn't change my strategy, just adjust the prices I am willing to pay.

How much adjustment are the dealers likely to make to clear inventory?

That depends on the model, market and the timing. The longer you wait the better deal you may get, also the less chance that you will get what you want.

ddunbar

How, if at all, would you adjust your buying/negotiating strategy to these facts?

I wouldn't change my strategy, just adjust the prices I am willing to pay.

How much adjustment are the dealers likely to make to clear inventory?

That depends on the model, market and the timing. The longer you wait the better deal you may get, also the less chance that you will get what you want.

How would you approach adjusting your price expectation?

snakeweasel

How would you approach adjusting your price expectation?

Well first thing is to see what their inventory is like. If they have a ton of them sitting in the back you could expect a lower price. Also get them to show you the invoice on the car you are interested in and check dates, the longer it has been on the lot means you could get more off.

Also the later in the year the better price you can get, however this could backfire as certain things you want/need may no longer be available.

For the Mazda I would shoot for a few hundred under invoice (especially if they have many on the lot) before applying any rebates. I would get them to offer a selling price prior to making any offers, then hesitate and try to see if they will come down again. Then counter offer (but don't go to low if they really slashed the price). You might find a real good price that way.

I wouldn't expect as much on the Honda.

theflush

There have been some brand new 05 and 06 MPVs sold on Ebay lately. They are selling at huge discounts which means you can get a pretty good deal on a good van with 4 year 50K mile warranty, although the MPV is certainly no Odyssey. I would think you could get a comparbly equipped MPV for $6-8K less than a comparable Odyssey right now.

Check the prices paid forums and then look at the MazdaUSA web page to check local dealer inventory, find what you want, and email an offer that is better than what you have seen on the prices paid forum. However, it does appear that some dealers '05 inventory is only on the dealer web page and not on the MazdaUSA web page.

jipster

The MPV is a real bargain at retail, so anything under that is gravy. Seriously though, the MPV LX-SV has been sold for $15,995(from what I have read ) Which is about $5,000 under invoice. I think rebates are only 3k...so really not sure how they would be going for 5k under. I guess one thing you could say to "adjust" your negotiating strategy would be to point out to the dealership this is the last year of the MPV's production... you're worried about parts availablity or whatever the neysayers say about such things.

I think this is a good time to buy as there are very good incentives and still a good selection. Waiting another month
may get you another $500 in rebates though.

The Ody is going for between $500-$1,000 below invoice at the moment...depending on market. So, deals on both should be available.

ddunbar

Thanks everyone for the responses and suggestions. I'll take an optimistic approach about getting a lower price. Had an email quote on an Ody for $450 below invoice but that's not even the full $500 dealer cash so I suspect one should be able to do better.

Probably the wrong board to comment, but ... the smaller size of the MPV is likely to be more appealing to DW who thought our Forester was too tall and big to drive comfortably but who also likes to carry lots of stuff in the car besides two young ones in mammoth car seats.

Is resale value likely to really drop to the floor on the MPV once it's no longer in production? We'd like to drive the next car into the ground so this might not be an issue. Of course, we've said that with the previous two cars, and as we've gone from 0 to 2 kids, that's proven to be a very poor assumption. Nonetheless, we'd like to avoid getting into anything bigger and more gas hungry than we really need.

cccompson

One of the Mazda stores here in Columbus is advertising '05 MVPs at $8000 off MSRP (only 3 left). I would guess that is more than 5K under invoice.

kyfdx

Don't forget the Prices Paid forums..

Honda Odyssey

Mazda MPV

theflush

Are you talking about Ricart? If so, I test drove the last remaining LX a month or so ago. Sticker of almost $25K. I could have had it for under $17K without even negotiating. Even though it is a good value, it wasn't exactly what I wanted and was a little more than I wanted to pay, so I ended up with a used one instead. In this instance, the new one might have been a better value, but I needed to stick to my budget so I went with a used one (not from Ricart; I hate shopping there).

driveright

I turned off the TV for the summer and have been reading Edmunds forums. I been browsing numerous forums, but two really grabbed my attention: “Purchasing Strategies” and “Stories from the Sales Frontlines”. I read them both from start to finish, over 5000 entries. It’s been a blast. There haven’t been any entries here for a couple of weeks, so I’m not interrupting anything to drop in with my comments. I have read many, many great suggestions regarding buying strategies. I think it is important for buyers to understand the game itself, and want to describe the buying/selling game as I see it.

First, anyone buying a vehicle in a negotiated environment needs to understand the characteristics of the transaction. The salesman is not required to have the buyer’s best interests at heart, and does not. There are very few fiduciary relationships in our economy and it should not be expected by the car buyer, or implied by the car dealer. Whatever “relationship” a buyer may have with a salesman, it is not a fiduciary relationship. Socala4 deals with this issue head-on.

Second, the process is complex and overwhelming until you have some experience. The buyer needs to make many decisions. These include the type of car needed or wanted, the make and model, options, price, financing, and warranties. Sale or trade-in of an existing car is often involved as well. Research into market values is essential. (Thank you Edmunds!) Even then, since most people buy a car infrequently, there is ample opportunity for a salesman to play on a buyer’s confusion. The Bobst method cuts through these games..

Third, and most importantly for the buyer to understand, the minimum price at which the dealer is willing to sell a car is usually not disclosed. In fact, the non-disclosure of the minimum selling price is essential to the dealer in a negotiated setting. With rare exception, if you pay MSRP, you overpay no matter how happy you are with the price, the vehicle or the process. The dealer’s goal is to get as far above his minimum selling price as possible by finding the maximum price a buyer is willing to pay. In economic terms, although the dealer has no control over the supply curve (number of cars manufactured), he tries to maximize his profit by finding people on the demand curve who are willing to pay a price which is more than the market’s hypothetical equilibrium price (the intersection of the supply and demand curves.) Buyers like Driftracer or Chuminthewater who request OTD email prices from numerous dealers may get a good idea of a dealer’s minimum selling price.

Fourth, it is interesting to observe that there are significant costs for the dealers and salesmen to conduct their business this way. There are psychic costs in that buyers don’t trust sellers, and the public at large holds car salespeople in low regard. There are time costs in that there will be lots of prospective buyers who are completely unfamiliar with a realistic range of undisclosed prices and monthly payment conversions, and will therefore waste the salesman’s time. If the true prices were disclosed, many of these people would never initiate the buying process. Worse, if a buyer believes that the minimum selling price is lower than it really is, the buyer may become belligerent, thus transforming time costs into emotional costs for the salesperson. Finally, there are monetary costs, because some buyers will simply beat the sellers at their own game. A buyer can turn the dealer’s weaknesses in the negotiated market to his advantage by treating the salespeople with respect (psychic benefit), being prepared to buy now (time benefit), and by expertly negotiating to a low but realistic price (some profit vs. none).

Fifth, a buyer needs to remember that experienced car salespeople are very gifted at add-ons and overcoming objections. Buyers need to be sure to buy the car and extras they really want, and not give in to pressure to buy before being ready.

graphicguy

Whew.....don't neccessarily disagree with what you posted, but it really doesn't have to be that difficult. There's plenty of places around (including here at Edmunds) that you can get a pretty good idea of what any car will sell for. Look in the local newspaper at the car ads. Look at the dealership's stock level of what they have available of the model you want (the more they have, the more they'll negotiate).

Keep your "number/offer" in mind when you walk into the dealership. Offer that number. If the dealership balks, you can either go to another dealership to make the same offer, or do the "back/forth routine". Personally, I'd visit two dealerships to make the same offer to guage how close you might be on your offer. You can either "stick to your guns" of your offer, or choose to negotiate the traditional way to get what you want.

Easy-peasy!

jipster

Nice summary of over "5000 entries" driveright. I'm surprised you still have your sanity.

I concur with your statement of having experience in the car buying process. Reading discussions like this in Edmunds is very helpful.

For those young teenagers,adults or first time car buyers...I think it would be greatly benefical to tag along with a friend who is in the process of buying a car. Learn what it is like to interact and negotiate with the car salesperson. Learn how to say no and walk away if the deal is not to your liking.

You can read all the posts ever written in Edmunds on car buying, but stepping into the lions den for the first time (with chair, whip and pistol) is where the real learning takes place.

driveright

I don’t think any game can be easy to play unless you know the rules. I tried to describe the game itself, and think I had a couple of insights not mentioned previously in the forum. I don’t agree with you that it is “Easy-peasy” to get a good deal. It takes skill, and many participants have described their techniques here. Perhaps you are taking for granted the level of skill you have developed from your experience in making many purchases.

snakeweasel

Oh I think with doing a little homework and doing a method that is comfortable for you the "game" can be easily played. I mean all you are doing is buying a car not negotiating the Paris Peace Accords. With a little research it should be very easy.

bobst

"I had a couple of insights not mentioned previously in the forum"

What were they?

Kirstie_H

Possible responses to your message:
1) Goodness no. That might require you to play jeux en Francais, whereas an auto purchase usually doesn't; OR
2) Will that be a special edition vehicle for Honda?

Feel free to pick the cheesiest one.

snakeweasel

Feel free to pick the cheesiest one.

I pick number pi.

tidester

I pick number pi.

Not only is that irrational it is also transcendental!

tidester, host

P.S. I hope somebody understands that! Otherwise, nevermind. :shades:

driveright

Well, I guess I got something started after a few weeks of silence.

Bobst, I was referring to the supply and demand curve model in Item #3 of my post #2390, which provides a context for the systemic costs to dealers listed in Item #4. Maybe it doesn’t grab you, but it was an “Aha” moment for me and put the discussion into an economic context that I found helpful. I don’t recall the process being explained previously in the forum in those terms, but I’m not going to put up a fight on the issue of originality.

I don’t think the process is naturally easy. The many people who have requested and received guidance from the members of this forum are evidence of my position. Buying in a negotiated environment has to be learned, and there are many good buying strategies which have been explained and debated. Bobst, your method can in fact make the process easy. It is duplicatable by anyone willing to do the research and self-disciplined enough to follow the plan.

driveright

Thanks for your response. I have been enjoying your comments all summer.

snakeweasel

P.S. I hope somebody understands that! Otherwise, nevermind.

LOL I get it, but it may be over most peoples heads.

tidester

YaY!!!

tidester, host

jipster

I have been enjoying your comments all summer.

I truely appreciate the positive feedback driveright. It made my day...and it's only 9 a.m !

nynewcar

Please excuse me if this is a "d'oh" question, this is the first time I'm buying a new car in the States.

How does the buying process actually work? Assuming we work out a deal, I'm planning to pay by certified check. I found a good checklist for inspecting the car, but am confused about some other points.

If I find a problem when I'm inspecting the car, and the dealership tries to brush it off, is the car already legally mine at that point, or can I still reject it and walk away?

Will the car actually be handed over to me that day, and if so, how is it insured? Don't I have to give my insurance company the VIN (which I won't know until I buy the car) for them to add it to my policy? Where does the license plate come from?

Thanks.

bobst

You should inspect the car before you buy it.

Yes, the car is handed to you that day and your insurance covers it for a month. That gives you time to give your insurance company the VIN.

When we bought our Honda in 2005, the dealer gave us the new license plates.

biancar

1) test-drive and inspect the car before you buy.

2) you can call your insurance company from the dealership and get your car covered immediately. Most insurance companies have a free 800 number; it should be on your insurance card.

3) the dealer will put a cardboard temporary license on and will file the papers with the state Dept. of Motor Vehicles to get the regular license. Typically it comes in maybe three weeks or so. The dealership will call you to come in and will put the plates on.

If you've never done this before, you might want to take someone along with you who is experienced in car buying in the U.S. It doesn't have to be a difficult process, but sometimes another pair of eyes and ears can be helpful.

If at all possible, try to do your shopping mid-week during the middle of the day rather than on a Saturday. If you know some dealers where you want to shop, it might help to call ahead and make an appointment, but it's not essential.

graphicguy

LOL I get it, but it may be over most peoples heads.

That's why I ducked.......

Regarding the "Game" of car buying...I don't know that my experience yields better or worse results than anyone elses technique. Depends on what you're comfortable with. If you view it as a hard and complex process, your experience will be a self-fulfilling prophecy. I have bought a lot of cars, however. The more complex the deal is (whether it's made that way by the dealership or the customer), the more stress filled and difficult car buying gets. I've always felt that it's my money. I control how much and where I'll spend it. I make it easy on myself.

I've walked out of many a dealership because we couldn't agree on a deal or I didn't trust the sales person or dealership. It doesn't bother me. I don't like playing a whole lot of "if we....will you" games.

I personally believe that both the buyer and the dealership will know within the first several minutes of hooking up whehther a deal will be possible or not.

As long as you're comfortable and confident in your observations and research, the buying process shouldn't be complex at all.

nynewcar

Thanks, I'll give my insurance company a call to see how it works with them.

Do you know anything about my other question about inspecting the car, as far as what happens if I find a problem and the dealership isn't forthcoming about dealing with it to my satisfaction? Basically I guess I'm asking - do they let me do the inspection before I hand over the money and take possession of the car?

I'm not anticipating any serious problems, just trying to prepare myself for possible scenarios. After reading these discussions for the past couple of months I realize that all kinds of small issues can come up at the last minute - finding unexpected touch-ups on the car's paint, etc.

driveright

"...don't necessarily disagree with what you posted"

Of your responses, I like this comment the best.

The game is what it is. The buyer can choose a simple strategy, as you say.

geo9

Without that Socala poster...............

deserth8r

Not much going on today, so I will throw out what strategy I use. I am pretty sure that I dont pay the lowest possible price, but I think I have always gotten a fair deal. I am 25, and have only bought three cars, but here it goes...

I do my research, mostly on edmunds, and determine a price that I think is fair, usually a couple hundred above invoice (all three purchases are Fords, and I didn't discover these boards until recently) and throw out a price typically about 300 lower than this to start negotiating from. When we get to a point where we are a few hundred apart, twice it has been a little above what I want to pay, I tell the dealer to throw in something that I would most likely end up purchasing anyway and we have a deal. Both times I have gotten what I wanted, window tinting on two cars, a spray in bed liner for my truck, extra keys, dash mats, you get the idea.

This worked well for me, except when we purchased my wifes car, they accepted our first offer without negotiations. I still believe I got a fair price on the car, but I probably could have gotten it a little cheaper.

I believe that in each of these purchases it was a win-win situation for us and the dealer, yes we probably could have paid less using the famous "bobst" method, but this one works for me.

driveright

I read your posts on "Stories from the Sales Frontlines". You have been on the real frontlines. Thank you for your service.

jipster

Without that socala poster...

I agree. I miss his postings. The guy knew a lot about the car industry and negotiation strategies.

Tidester, see if you can bribe socala4 into coming back. Send him one of those, "Tidester is My Favorite Edmunds Host", t-shirts you are always giving out.

snakeweasel

Send him one of those, "Tidester is My Favorite Edmunds Host", t-shirts you are always giving out.

Huh?

What?

I want one!!!!!!!!

imidazol97

Kirstie_H

You can make your own at www.cafepress.com.
Please note that it's spelled KIRstie rather than KRIstie.

nynewcar

Thanks for the tips. I wish I could have someone with me, but unfortunately I'm on my own. Still, as corny as it sounds, I feel as if I have this whole community behind me. Everyone here has been incredibly helpful answering my and other newbies' questions.

I'm planning to use the "Bobst Method" (TM? ), reinforced by a certified check, which should cut down the hassle somewhat. Also, I will be buying a Honda, so there aren't a lot of options they can try to push. And, I'm not a youngster, so I'm not easily intimidated. But my biggest strength is knowledge.

tidester

Send him one of those, "Tidester is My Favorite Edmunds Host", t-shirts you are always giving out.

I had no idea they were becoming so popular! We're waiting for the "CarSpace" edition.

tidester, host

audia8q

The guy knew a lot about the car industry and negotiation strategies.

He also thought that anyone associated with the auto industry in anyway was on the grassy knoll in Dallas.

british_rover

He also thought that anyone associated with the auto industry in anyway was on the grassy knoll in Dallas.

And that his negotation method was the ONE TRUE METHOD

or whatever Kirstie called it.

tsgeisel

Judging from your handle, you're in New York, but keep in mind that the actual (ahem) mechanics of the buying process will vary from state to state, and you may have more rights in one place than in another.

California is a generally consumer-friendly place to buy a car. Never (for some definitions of the word) buy a car in Georgia or Tennessee, where the environment seems actively hostile to auto buyers.

So, not so much for you, but for anyone else following this discussion, please be a bit more specific about where you're located, so the advice can be made more specific.

biancar

Sounds like you've got a plan!

By the way, you don't necessarily need a certified check. After all, you might end up buying the car for less than you planned! It does happen.

If you're financing through your credit union, usually you can get pre-approved for a certain amount. Then you can write a check for anything up to that amount. Your credit union office can give you details.

If you're paying cash, and if you have good credit, you can usually just write your own personal check, as long as you also let the dealership run your credit to see if you are who you say you are. Fair enough, they're taking your piece of paper and giving you a big chunk of steel.

You probably know the usual things to be careful with: don't fall for "Additional dealer's markup" (known as "ADM") , outrageous processing fees, etc. If you're using the "bobst method," make sure the dealer knows the price you're offering is the complete, out the door, price, including taxes, etc.

Honda dealers are usually pretty thick on the ground near any major city, so if you don't like one for whatever reason, feel free to walk out and go somewhere else.

Good luck and have fun with it!

nortsr1

and be sure to get back to this forum and let all of us know how your Bobst method worked.

bobst

Ok Nynewcar, I hearby assign you the rank of official "Bobst Trainee".

If you come back with a good story, you will attain the rank of Senior Bobst Associate, and you will have the right to train new legions of Bobst car buyers.

mikefm58

LOL, some good advice Nynewcar, you've got alot of experienced folks here behind you, just make the buying process fun. Stick to your guns, be professional, polite, courteous, but firm, and be ready to walk if you don't get your price.

graphicguy

Stick to your guns, be professional, polite, courteous, but firm, and be ready to walk if you don't get your price.

Best advice I've seen here in quite some time.

no_clever_name

A quiet message board is worthless.

snakeweasel

So is one that is too busy.

jmonroe

Basically I guess I'm asking - do they let me do the inspection before I hand over the money and take possession of the car?

It's your money so you're the boss. Inspect your car in bright daylight and when you're totally satisfied, fork it over.

Enjoy your new car and as others have said, don't just walk away and leave us hanging; LET US KNOW HOW IT WENT.

Good luck,

jmonroe