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Purchasing Strategies - Questions & Success Stories

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Comments

  • dino001dino001 Member Posts: 6,191
    I think all "investment" talk comes from reasoning that we should be careful when buying this depreciating asset and consider long-term effect on our expenses and benefits.

    So we shoud give similar thoughtful consideration as we would to an investment. Such a decision has a potential to influence our life in a similar way (i.e. bring benefits or make it miserable and bring more losses/expenses). But saying - it's an investment is a stretch beyond what I would say.

    And for reasons stated earlier, I would avoid putting words "car" and "investment" together as potentially more harmful than beneficial to majority of "less informed" public.

    2018 430i Gran Coupe

  • abraindrainerabraindrainer Member Posts: 312
    Dino and Belias, both of you put forth some good points! I think we all agree WRT the general aim of this discussion and we arguing more about slight differences in persepctives and maybe just wording. ;) Basically, we all know that buying new vehicles can be financially harmful particularly if it is done too often. There is clearly a "return" of dubious and less financial nature. :D
  • snakeweaselsnakeweasel Member Posts: 19,592
    Snake, I remember my Economics professor (at Loyola) defining economizing as "maximizing your satisfaction".

    Its called maximizing utility and I agree with that. All along I have been saying not all profit/pay back is monetary.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • maradagmaradag Member Posts: 85
    The information consumers gather on this site is invaluable. It has kept several of us from getting cheated out of our money and put tools in our hands to get the most value for our buck.

    The only thing that has me a bit stumped is how do we use this information? If a salesperson quotes an interest rate higher than the current rate program in place, how exactly does one go to the salesperson and tell him/her “You’re fibbing and charging me more money”? They are bound to get defensive and put you in a position where you can’t deal with them.

    How do you go and tell them that buyers nationally (including your area [after confirmation, of course]) are paying an average of “x” amount of dollars under invoice rather than the price that that dealer quoted?

    We’ve got all this useful information; some of us may have the knack to figure out how to use it, unfortunately, I am not one of those people and I'm sure there are others like me. So here are my questions and ask anyone’s input for how to handle.

    1) Interest Rate/Money factor quoted is higher than program offered.

    2) Price quoted is higher than what many are being offered.

    3) Dealer is using a residual (leasing) that lower than other local dealers.

    4) Dealer swears that his invoice is a number that you are (90%) sure is NOT.

    These are some of the hurdles I have been faced with. There are probably more but I can’t think of them at this point.

    Looking forward to tips on how to deal with these scenarios.

    Thanks everyone.
    Mara
  • mikefm58mikefm58 Member Posts: 2,882
    All good questions Mara, here's my 2 cents.

    1) Go to your local bank or credit union and get their best quote. Maybe pre-apply at several places. Heck, even go to the manufacturers website and see if they have a way to pre-qualify you. Then tell the dealer what terms you have and ask them to beat it.

    2) That's OK, that's their job to try to bump you. Just pick what you feel is a good price and stick to it. I've walked out of many a dealer and found my price at another dealer down the road.

    3) Don't know squat about leasing so I can't comment.

    4) Invoice numbers as well as MSRP really don't matter, so I never bring them up. All that matters is the market price for what you're looking for. Do your homework and offer that price. See #2 above.

    Good luck.
  • dino001dino001 Member Posts: 6,191
    Well, for most you just say "thank for your time" and walk away. Many times they may magically find those missing pages in their manuals/guidelines.

    Regarding promotional interest rates or leasing, not everybody may qualify, so if your score is below the required threshold, then you may experience a bump that is unavoidable. Being aware of one's score is a good thing in that case.

    Regarding residuals, the dealers are not allowed to change them - they are dictated by banks. However, since every bank can have their own residual guidelines, the delaer may simply try to offer you one one with higher rates/lower residuals. All you can do is say "no - try again" or just "no - thanks for your time".

    Invoice is probably the most irritating thing - there are variables that are not included in published invoices and they do vary from brand to brand. The best approach is not to get into back and forth what the invoice is, unless you are buying under some "invoice plus/minus" fixed type of program (like Ford's X plan, GMS, etc.). Just figure what you think your price is and offer it prepared it may be rejected. There is no law saying Joe's Ford has to sell to Mara at invoice or at any other price for that matter.

    2018 430i Gran Coupe

  • bobstbobst Member Posts: 1,776
    "I've walked out of many a dealer and found my price at another dealer down the road."

    When we walk out, they usually follow us into the parking lot and tell us our offer has been accepted. That's how it has been on our last three car purchases.

    Anyway, Mara, listen to Mike's advice.
  • gasman1gasman1 Member Posts: 321
    Mike's advice is spot on. Additionally, the purpose of this information is become a smart shopper, not a warrior. Start throwing your research at the salesperson and you may as well forget about a good deal. Know what is a good deal so you recognize it when it's offered and so you don't pay more than you should.

    Keep your knowledge to yourself. You don't need to tell them why you won't accept their offer. When I lived in Germany there was a great phrase that meant "too expensive". It was common place to use it there. I wouldn't get away with it here. However, statements like the following can change the deal to your favor.

    a. You may want to sharpen your pencil and come back with a much better number.
    b. I'm sorry. I really want to do business with you today. However, that/those figure(s) won't allow a deal with me to happen.
    c. Thank you for your time. Call me if my price changes to $x.
  • lrguy44lrguy44 Member Posts: 2,197
    The only thing I would not do is to apply for a loan at very many banks. Each inquiry lowers your credit score by about 5 points,and it takes time (I think 6 months) to come off your bureau. Pick one with a lower rate, get preapproved, see if dealer can do better. If both are way off, at least you will have your credit score to do a quick check of other bank rates without pulling a bureau. If you find a better rate then apply.
  • dino001dino001 Member Posts: 6,191
    Multiple inquiries for an installment load done within 2 weeks should be treated as one, according to FICO. Banks will often adjust the score if this is pointed to them.

    2018 430i Gran Coupe

  • maradagmaradag Member Posts: 85
    ok, for starters, I know I've got an excellent credit score (I just checked recently) therefore, I know I'd qualify for a top tier rate.

    So, when I saw a post in one of the forums here which disclosed the manufactureres program, I figured out that my payment was $23 more a month because of the higher interest rate that Mr. S quoted me. All the while, Mr. S @ dealer A, swore left and right that he can't do anything about the rate and residual because its set by the bank. Ya, ok.

    What do you guys think about Lendingtree.com where you get 4 quotes from institutions?? FYI, lendingtree.com, will get you a quote on a purchase or a lease!

    Secondly, I've found that there's no negotiating with dealers in close proximity to my home or work. And I know that I'm not far off on my pricing. I mean, are they really that hell bent on getting their own way that they would sacrifice doing a deal, period?? Does it really make sense to drive 30 or 40 miles to get a good price? I guess that's something I need to determine myself (whether the drive and time is worth the savings...).

    Anyhow, I'm not good with "Sharpen your pencil etc." kinda of comment... Knowing me I'll probably fumble over my words 3 or 4 times before I get that statement out and completely convince the salesperson that he can get over on me.

    So, I guess the best thing to do is swallow the information that I've got rather then embarassing the (lying) salesperson and be on my way. Unfortunately, so far that action has gotten me to this point: end of my lease with nothing to drive!! (thank heavens for lease extensions).
  • maradagmaradag Member Posts: 85
    That's a good peice of information to know... I was concerned about having any lender get me a quote because they'd have to run a report and I didn't want to have it show up on my credit report.

    Thanks Dino!!!
  • oldfarmer50oldfarmer50 Member Posts: 24,198
    Maradag,
    Just search this and other smart shopper discussions for postings by bobst. I found his method to be the best for people who have trouble "wheeling and dealing".

    2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible

  • mikefm58mikefm58 Member Posts: 2,882
    I've never been a fan of sites like lendingtree.com as I believe they share all of the personal information that you gave them with every tele-marketer on the planet. You say you have an excellent credit score and I'm assuming you have a checking account at some bank, so apply there.

    What city are you in? Sounds like there are a small number of dealers and the local market is pretty tight, so your only options are to buy local or decide how far you'd go to save some money.

    And good advice from a previous post, use the infamous patented super duper can't miss Bobst method. Which is simply to determine what you think the vehicle is worth to you, add tax, tag, title, and dealer fees for an out the door price and then offer that, and stick to it. If I misquoted the Bobst method, so sorry Bobst, please correct me, LOL.

    Maradag, Bobst is kind of a legend around here.....
  • bobstbobst Member Posts: 1,776
    You got it right, Mike. Not much to it, is there?

    I guess some people like negotiating, but I don't.
  • losheeloshee Member Posts: 11
    Has anyone tried to negotiate their price online? I've gotten a few quotes from dealers and am ready to try to cut their offers but am not sure how. What do I say?! "I know you offered x, but I only want to pay y."? I need some help!
  • tidestertidester Member Posts: 10,059
    You may also be interested in Internet vs. Traditional Car Buying.

    tidester, host
    SUVs and Smart Shopper
  • snakeweaselsnakeweasel Member Posts: 19,592
    Has anyone tried to negotiate their price online?

    Personally I wouldn't do it. Negotiating online would take some time. Plus the dealership may not think you are serious. I prefer to look face to face with the person I am negotiating with, its faster and there is a lot of non verbal communication that can help out.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • dino001dino001 Member Posts: 6,191
    Obviously something is giving you away. Perhaps your eyes, or some parts of your demeanor. You can't expect to go into negotiation with a success if, as you say you fumble after three or four words. They see it and all they know is if they press long and hard enough you'll cave. You remind me myself from five years ago - I was insecure, afraid, definitely unsure. I speak with an accent, which I thought at the time was a huge disadvantage (until I learned later that half of salesforce is also from overseas). You obviously experience a high confrontation anxiety. They see it so they prey on it without mercy (and it's their job to do so).

    Four years ago, when I bought my new car, I dealt with my issues by internet. Put inquiries, got responses, talked over the phone, got detailed fax quotes from three different dealers and bought it next weekend with a decent trade offer. Granted, Subaru is a low-volume brand in Florida, so every inquiry was probably handled quite attentively. The dealers are also more of low-pressure nice-guys types with upscale twist (half of them are parts of multibrand luxury dealers) than high-pressure high-volume dealers. The latter tend to ignore the internet inquiries. I'm afraid you may need to drive 40-100 miles to save some decent amount. Or - be ready to do so. If you are persuasive to get a written quote from a guy 50 miles away, the guy near you may be more cooperative.

    Lets be honest about one more thing - the lease also puts you in a disadvantage. They tend to be more complicated, less transparent, thus more open to abusive practices. If you don't know for sure what you are doing, a 60-month loan on a cheaper car may be a better way to go. There are decent safe cars the size you want out there for low 20s, you know. Moreover, after 3 years of similar payments you'll be already owning something rather than in need of doing the same excersize again (and frustration). After another 3 year, assuming you stick to it, you'll have some money in the pocket and whole lot more leverage to buy another vehicle - perhaps this time something in low 30s. Just a suggestion for a consideration.

    2018 430i Gran Coupe

  • tidestertidester Member Posts: 10,059
    There's a branch of mathematics called Game Theory (think John Nash in "A Beautiful Mind"). I came across this article relating to car buying strategies that you may find interesting: Worthy Trade

    It's a bit long but you can skip down to the "Purchasing Power" section to get straight to the discussion about negotiating a car purchase. A lot of the ideas I've read here are reflected in the article.

    Enjoy!

    tidester, host
    SUVs and Smart Shopper
  • joel0622joel0622 Member Posts: 3,299
    Has anyone tried to negotiate their price online? I've gotten a few quotes from dealers and am ready to try to cut their offers but am not sure how. What do I say?! "I know you offered x, but I only want to pay y."? I need some help!
    the internet is a great place to get a price quote to see if you and the dealer are on the same sheet of music. Once you have established that it's time to get face to face and see if you can strike a deal.
  • jmonroejmonroe Member Posts: 8,989
    The only thing I would not do is to apply for a loan at very many banks. Each inquiry lowers your credit score by about 5 points,and it takes time (I think 6 months) to come off your bureau.

    Since I'm a cash buyer for everything other than houses I'm going to admit my ignorance about this.

    I don't understand why a request for a loan lowers your credit rating. Maybe mine is well over 800 because I've never asked for a credit check. The only reason I know mine is because a few years ago when I refinanced (that's a whole discussion in itself and is way off topic here), I got a 4 1/2 % loan (they were giving money away then for about a week so I took it) and the mortgage broker told me my score.

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • lrguy44lrguy44 Member Posts: 2,197
    Multiple inquiries for credit, be it for a mortgage, credit card, or car will lower a credit score. I usually submit a deal (I have a good idea of the best deal for my customer) before I will pull a bureau. The only exception is if I am doing a spot delivery and I can't get an answer from the bank in time.
  • imidazol97imidazol97 Member Posts: 27,675
    > I usually submit a deal (I have a good idea of the best deal for my customer) before I will pull a bureau.

    Do you tell the customer that you're going to do a credit check? I keep hearing that the multiple credit checks from shopping does lower the score. So the customer needs to know it's being done and agree you're close enough in the deal to do so.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • lrguy44lrguy44 Member Posts: 2,197
    Before I submit a credit check or a deal to a bank for approval, I have a signed credit app from the customer giving me permission.
  • jmonroejmonroe Member Posts: 8,989
    Multiple inquiries for credit, be it for a mortgage, credit card, or car will lower a credit score.

    I've come to know this because I keep hearing it but my question is WHY does it happen. Could it be that if you're asking for credit, those that give this credit see repeated requests as you getting close to you're limit of being able to pay for items purchased via credit.

    I'm beginning to think that this is the reason but I'm not totally convinced of my theory.

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • lrguy44lrguy44 Member Posts: 2,197
    The answer is known only to the 3 credit bureaus. It could also be an indication that people are in financial trouble and trying to dig out by refinancing everything. Or it could also be that they think that the people are being denied credit from multiple sources.
  • joel0622joel0622 Member Posts: 3,299
    Multiple inquiry's in a 30 day period for the same industry DO NOT lower your score. They are counted as one inquiry. If you shop for a car and your credit is checked 11 times that counts as one inquiry. It only lowers your score as though it was pulled once.

    Now if in a 30 day period you have your credit pulled multiple times by multiple industrys then it will affect it.

    Jmonroe the reason it lowers it is because to the scoring matrix it looks as though you are attempting to take on additional debt.
  • jmonroejmonroe Member Posts: 8,989
    Jmonroe the reason it lowers it is because to the scoring matrix it looks as though you are attempting to take on additional debt.

    Thanks. That's what I was theorizing.

    Now I'm going to go have mine checked at a couple different types of places. There is no sense in having an excellent credit score (those are the words my mortgage broker used) if I can't use it. :)

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • tallman1tallman1 Member Posts: 1,874
    I have great credit but a few years ago, when I bought my current house, my car insurance actually went up a few dollars because of multiple checks of my credit. Don't know if I started a new credit card around that time or what but I was surprised. #%&$ actuaries! :sick:
  • joel0622joel0622 Member Posts: 3,299
    Now I'm going to go have mine checked at a couple different types of places. There is no sense in having an excellent credit score (those are the words my mortgage broker used) if I can't use it

    Hey, just shoot me your SSN and your full name. I will have you in the 590's by weeks end :D
  • jmonroejmonroe Member Posts: 8,989
    Hey, just shoot me your SSN and your full name. I will have you in the 590's by weeks end

    Spoken like a true F&I guy. :)

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • dino001dino001 Member Posts: 6,191
    It makes no difference on the loan between 789 and 784 scores. Similarly, even 595 and 590 will not make a difference. Moreover, there will be some cutoff point even if one asks frantically for new credit at ten different industries, as inquiries are only part of the score. So if someone has excellent payment history, long established credit, no big balances on revolving accounts, etc. their score can go lower only so much within short period of time, as those components remain the same.

    It makes difference only in marginal situations, when score is just above some cutoff point of tiers used by the lender.

    2018 430i Gran Coupe

  • snakeweaselsnakeweasel Member Posts: 19,592
    I've come to know this because I keep hearing it but my question is WHY does it happen.

    Because it is a sign that you are shopping around for credit. 5 inquiries could mean you will take out 5 loans and take on a huge amount of debt.

    But credit bureau generally treat multiple inquiries within a short period of time as one.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • joel0622joel0622 Member Posts: 3,299
    For those who missed it the first time I posted it.

    Jmonroe, this will help clear it up.

    link title
  • jmonroejmonroe Member Posts: 8,989
    Jmonroe, this will help clear it up.

    Thanks again Joel.

    There is nothing like another source for verification.

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • butterfly888butterfly888 Member Posts: 7
    So, I'm now in the situation where I have emailed several dealers and got one dealer whose quote is $1000 less than the others. I went to see that dealer but he won't go any lower than the quote. Now I am going to see two other dealers to see if they can beat this other dealer's quote. HOW should I go about this? I don't want to keep going back and forth between dealerships so I thought perhaps I could start some type of price war via email...if they go for it. Should I give them the price I want and see who bites first? Just tell them that I will go with whomever can beat my initial quote the most?
  • snakeweaselsnakeweasel Member Posts: 19,592
    Well how good is that one dealers price? Its possible that the best quote you got is the best you can get.

    You could try to get a better price from another dealer, but I would go there in person and be ready to buy if the price is right.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • gasman1gasman1 Member Posts: 321
    You may already have the best deal that's available. How does it compare to the on-line research that you've done? You really haven't provided enough information for us to advise you to take the deal or go for more. However, since that's not your question... If this dealer has provided their best price up-front, they're to be commended and deserve your business. A price bidding "war" may work and then again it may also backfire. Dealers can and do withdraw offers when they find that someone is doing exactly what you mention.

    The bottom line still comes down to doing your research so you know and act upon a good deal when presented. If it's not a good deal, then that's another thing.
  • butterfly888butterfly888 Member Posts: 7
    Thanks for the reply! Is it the best deal around...that's what I'm not sure about. If I compare to the people on these forums, then it's not a good deal. Edmund's TMV seems way over what anyone has offered and so I'm wondering if it's even valid. I've been reading that getting 5000-6000 under MSRP is a good deal? Seems like that may be region specific? Here's my info:

    MSRP 36,000
    Invoice 32,500
    Holdback 1,000
    Offers 33,200 for most dealers
    32,200 from the one dealer that's offered the best price so far (and they will throw in a rear DVD player worth about 550 according to them)

    Any thoughts??
  • tallman1tallman1 Member Posts: 1,874
    Is it the best deal around...that's what I'm not sure about.

    I might have missed the name of the vehicle so I don't know about incentives, demand, etc. but can you really complain about getting a car for under invoice? Beware of other fees, however.
  • dino001dino001 Member Posts: 6,191
    Remember that some people claim (or really think) they got it for X amount of dollars, but they "forget" to mention they got ripped on the trade, their financing was 12% APR, they bought $3000 extended warranty, $599 fabric and paint protection package, etc. Did I forget dealers doc fee of $599? But, yeah - it was 2 grand under invoice, wasn't it?

    I'm not saying those killer deals have never happened and those who post in Edmunds are more likely to get them, but they probably happened less frequently than claimed - much less frequently.

    If there are some incentives/marketing support/volume bonus deals available to the dealers, they may be willing to lower the price - if not I think you are getting quite a deal here.

    2018 430i Gran Coupe

  • butterfly888butterfly888 Member Posts: 7
    It's a Honda Pilot EXL with Nav. They are offering a 0,9% financing offer right now...that's with the price I was quoted.
  • bobstbobst Member Posts: 1,776
    You have been reading the other forums to see what others are paying. That is the smart thing to do.

    Based on what you have read, you should determine an out-the-door price you are willing to pay. Then go to a dealer and see if they will accept your price.

    That is what we did. In 1995, I assumed we would have to pay about $200 over invoice for an Accord. However, one guy in the Prices Paid forum said he got one for $500 under invoice. We went to dealer, offered that price, and they accepted.

    There is no harm in making a low offer and having it refused.
  • dino001dino001 Member Posts: 6,191
    I don't know exact market on Pilot now and whether there are any dealer incentives available, but my best guess is I take it and run (fast). As long as you hold them to their word and there is nothing "other" popping up.

    Honda dealers and customers are notorious for "hiding" the "other" parts of their deal so it appears to be under invoice. It is easier in some states, as they don't cap dealers' fees, so $499-699 fees are not uncommon (think SE of US).

    My guess is because of many domestic brands having huge cashbacks creates pressure for illusion of buying under invoice even if it's not real. So they respond with those gimmicks and the customers buy into that illusion so they can claim under invoice deals, too so their neighbor in a Tahoe shuts up.

    2018 430i Gran Coupe

  • jipsterjipster Member Posts: 6,296
    There is no harm in making a low offer and having it refused.

    That's my thinking as well. Though many salesmen here contend you lose credibility with "lowball" offers. $500 under invoice is reasonable though, as it is merely a reduction of holdback.
    2021 Honda Passport EX-L, 2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere.
  • blufz1blufz1 Member Posts: 2,045
    O. K. Here's what you do. Save the dealer that gave you the lowest quote for last. Go to one of the dealers and offer $400 less than your best offer. Put your checkbook in your shirt pocket. Tell them you want to buy a car that day. Assess what happens or buy. Go to the next dealer and offer him/her $300 less than the best offer. Assess what happens or buy. Go to the guy who gave you the best price and offer him $200 less than his low offer. Assess what happens or buy. Don't touch your checkbook or gesture to it. Don't volunteer your lowest quote. That's what I would do. Hope this helps.
  • jipsterjipster Member Posts: 6,296
    I would take a stack of $100 bills and slap them upside the salesmans bald head as I am making the offer.

    It's like a Great White Shark swimming in a pool of flipperless sea lions... to irresistible to pass up.
    2021 Honda Passport EX-L, 2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere.
  • blufz1blufz1 Member Posts: 2,045
    Yes, but you're a jipster. :)
  • joel0622joel0622 Member Posts: 3,299
    I would take a stack of $100 bills and slap them upside the salesmans bald head as I am making the offer.

    Please make sure its $10K+ so I can notify the IRS and tell them the whole transaction seemed suspicious :D:D :shades:
This discussion has been closed.