Purchasing Strategies - Questions & Success Stories

verdugo

It's all cyclical.

Couldn't agree more. However, the cycle right now is in favor of customers, so it seems that the OP's dealer could show more willingness to negotiate.

wtd44

Specifically, it was the Toyota dealer near me that was displaying full window sticker plus $499 for seat cover spray and $499 for paint spray. They call it something like treatment or coating, I call it spray!
It is truly dismaying...

jmonroe

Any help anyone could offer would be greatly appreciated!

You’ve already gotten some good advice, so I hope you don’t mind some additional reinforcement.

(1) Don’t pay anything for that “protectant charge”. That is a totally worthless charge for a mere spritz of Scotchguard and a minimal wax job.

(2) Don’t pay any more than the state maximum allowed “Doc Fee”. In PA it’s $55 and if your state doesn’t have a maximum, then everything is negotiable.

(3) Don’t fall for the dealer has to make money so they can stick around and take care of you. They’ve probably been around longer than you have so they know how to take care of themselves; all you have to be concerned with is the deal you can negotiate. The biz guys here have taught us that, “if you don’t ask, you don’t get”. What more has to be said?

jmonroe

mikefm58

Specifically, it was the Toyota dealer near me that was displaying full window sticker plus $499 for seat cover spray and $499 for paint spray. They call it something like treatment or coating, I call it spray!
It is truly dismaying...

Unless the vehicle was a super hot brand new model, seeing that on the window sticker would make me walk away. I wouldn't give anyone my business if I saw that. It's a clear indication of the games to come.

graphicguy

mikefm....I concur. In this climate, any dealership who's trying to post addendum stickers (like mop & glo/sealant, window etching, etc), that means there are more games to come.

Given what's going on in the industry right now, good deals should be relatively easy to come by without resorting to the old "extra sticker" routine.

mako1a

ADM is a joke in this market. Just walk.

I'm waiting for 1/2 MSRP sales next.
Those rebates and discounts are a little too elusive for my liking. They come and go like the wind. Some even depend on how much the buyer is able to spend whether he intends to spend his limit or not. Just because I can afford a Ferrari doesn't mean I'll pay more for a Mustang.

jnorman76

Hi ... I have a 2006 Chrysler Pacifica base model (4dr wagon, FWD) which I am planning on turning in on 1/20. I have about 35,000 miles on it and it's in good condition. The residual value of the car is $11,101. Currently, Chrysler is not offering me any incentive to stay in the car. I have a $300 turn-in fee, plus the car will need a good detailing ($200) and maybe two new tires ($275). According to TMV, the trade in value is about $10,100. Just wanted to make sure I'm making the right decision here and need some opinions! Thanks!

oldfarmer50

"...residual value is 11,101...$300 turn in fee...a good detailing ($200) and maybe two new tires ($275)...trade in value is about $10,100..."

I'm not sure what trade-in value has to do with your decision other than giving you a general frame of reference. Besides dealers will only give you auction value for your trade no matter what TMV or KBB say.

If it were me the one question I would ask is do I like this vehicle enough to keep it when gas goes back up to $4. I would also think about what the possible repair costs could be (what's your warranty 7/70?).

You have the advantage of knowing how it was driven and serviced. Unless you are the kind of person who drag-races and never changes the oil this information is worth thousands.

Finally, is the buy out price in line with what you could purchase a similar car used. If you can get a car for 11K that has not been abused and similar cars with unknown history are 2K higher the answer is simple.

Good luck and by the way, you are required to report back here on how everything goes.

dino001

Just turn it in and move on. Unless you really like the car, can't afford a new one, it makes a good used one. One thousand between TMW trade and your residual makes the purchase somewhat attractive.

You could also play a little chicken with the bank - write down you're turning it in and wait if they call you back with a better offer. Last thing the bank wants is the car. They'll have to wholesale it anyway, which means selling it to a dealer for 9 grand or less. If they can get you to buy it for a little more and finance with them at reasonable rate, they may be happy to do it.

joebert

We are probably going to purchase a new vehicle before Christmas, and have been looking at 2008's. However, I see some 2007's still remain unsold. How badly do dealers want to unload these, and since most of these are more than 3 hours away from me, is there a good way to know what is a reasonable offer?

oldfarmer50

"...How badly do dealers want to unload these..."

Evidently not badly enough, or else they would be sold by now. Seems some dealers are on the pipe when it comes to these lot queens. They prefer to let them rust away rather than take a loss and be done with them. Don't expect them to follow any logic when you show up with a low-ball offer.

As far as what is a reasonable offer I suggest you look at what used cars of this type are going for. Add something for the low milage. Make the offer and if they are in fantasy land walk away.

cccompson

Good advice from OF so I'll just make a couple of points. Many times the answer to how good a deal there is to be had lies with information that may be hard to come by: the amount of factory to dealer money available. Heck, it would not be unusual to find that there's more on an '08 than an '07.

On the other hand, sometimes good deals are out there. Example, a month or two ago, an Infiniti store in NY was selling its remaining new '07 M45 with stickers in the mid-fifties for about 19 grand off. That's alot of car for mid-thirties.

Research extensively so you know the score and then just have a frank discussion with the dealer(s) to see if you can buy at your target price.

jnorman76

You're right - just a frame of reference. I do not like this vehicle enough to keep it when gas goes back up ... it's horrible on MPG. The warranty on the car is 3/36, so no incentive there.

I will be sure report on how it goes ... we may go down to one car for a while!

jnorman76

I'm not in love with the car. I like the way it drives/handles, but even at sub-$2 gas, it still gets horrible MPG.

I didn't finance through a bank, but rather Chrysler Financial.

wtd44

I'm planning to "shop" a little in January and February. Good sense says to wait for the 2010's to appear. The allure of an extreme bargain will nail me, no matter what good sense purports!

Karen_S

A reporter from a large national newspaper would like to speak to consumers who have sought to take advantage of the desperate situation car dealers find themselves since their sales have slipped in recent months, and bargained hard or in unusual ways during the last few weeks, whether they were successful at buying a vehicle at a low price or not. The writer is thinking many consumers have been empowered and can now turn the tables on car salesmen. Please respond to ctalati@edmunds.com with your daytime contact information by Friday, January 9, 2009.

kiawah

I love the scientific approach, when someone has an hypothesis, and then tries to find data to substantiate the hypothesis.

joel0622

The writer is thinking many consumers have been empowered and can now turn the tables on car salesmen.

Damn were not the Taliban. LOL

Mr_Shiftright

It's not science, it's entertainment. You have to give some slack here...

Like those "ten best places to retire" articles-----

#1 Pebble Beach
#2 Villa in Tuscany
#3 Manhattan Penthouse

Gee, I never would have thought....

Dealers and car buyers remind me a lot of cops and robbers...they have some things in common... :P

tidester

I love the scientific approach, when someone has an hypothesis, and then tries to find data to substantiate the hypothesis.

Do you think it would be easier to find buyers sympathetic to dealers to the extent they are offering to pay sticker plus a 20% hardship adjustment?

tidester, host
SUVs and Smart Shopper

jipster

A reporter from a large national newspaper

I wish you guys had a forum where members could go to read all of these articles that we've given data for. :confuse:

I'd like to read more on "turning the tables" on them bad ole salespeople.

fezo

Damn were not the Taliban. LOL

Since when??

hmchl

I own a 2003 Hyundai Elantra GLS with 78,000 miles on it. I am done paying for the car this month, and am tired of it, so I want to trade it in. Here's the rub: While the car is generally in good shape, I had a minor accident during an ice storm this week, and cause ~$700 in damage to the front right suspension. My deductible is $500, but I want to avoid claiming it through insurance, regardless.

The decision I need to make is, do I repair it before trading it in, or should I trade it in with the current damage. The tough part is that I don't think I can get a fair estimate from a dealer without them reviewing it, and it is not drivable until it is fixed. Does anyone have an opinion on the best course of action?

cccompson

It has to be repaired - period.

1) They can't see it until you can drive it down there.

2) They will deduct FAR more than the cost of the repairs from it's value if you don't.

Mr_Shiftright

I'm with him...definitely fix it or take thousands in loss.

wlbrown9

"I'm with him...definitely fix it or take thousands in loss. "

That would just about total it out since trade value is listed as maybe $2400-$3000. So, if you can get it fixed for $5-700 or so, then you might net $2000 more or less trade after allowing for the repairs depending on condition.

ilmbg

ilmbg

On tv the past few days, the news is saying how much auto/truck dealers are trying to sell- offering 2 for 1, thousands off new cars. Supposedly REALLY good deals, because cars just are not selling. What about used cars? Are they trying just as hard? I would like an older Mercedes/Volvo wagon- would dealers bargin with an older car?
Your thought and professional answers appreciated.

wtd44

Today is "show time" for Chrysler and GM on Capitol Hill. Meanwhile, I have found a very appealing new Dodge 2009 Ram pickup at my local dealership. I find myself somewhat afraid to negotiate for it, even with the nearly 9K I think I can save from MSRP. Under the various scenarios we might conjure up as the avenues our domestic industry may soon travel, do you suppose making a deal now is definitely not a good idea? :confuse:

tidester

do you suppose making a deal now is definitely not a good idea?

Just a thought - if everyone keeps sitting on the fence, the auto industry will continue its downward slide. What they need more than government handouts is sales.

tidester, host
SUVs and Smart Shopper

wtd44

I'm with you on this one, all the way. Actually, I traded in my 2004 Grand Cherokee Jeep for a 2009 Pontiac Vibe about ten months ago, when they came out early. I suppose I feel like I have done my part in support, although I would like to hit again, considering I sold my 1996 Chrysler about five months ago, and have not yet replaced it. The new Ram pickup is soooo nice...

tidester

The new Ram pickup is soooo nice.

It sounds like you're more than halfway there. Go for it!

tidester, host
SUVs and Smart Shopper

wtd44

I am of the opinion that the public is not adequately informed concerning the risks of purchasing vehicles from the Big Three at this point in time. That is the major factor holding me back. Last spring when I bought the early-release 2009 Vibe, I was not concerned. Some ten months later, I am unsure on matters such as warranty enforcement. But because of some radio advertising, I stopped by a local Saturn dealership today. I inquired about the possibility of deep discounts under the current state of the economy and the state of GM. The salesman became quite obtuse and informed me that he had no idea what I was talking about. In short, I left the property wondering just what the future holds for the Big Three and us customers.

tidester

That's just it. Uncertainty has been injected into the market so people tend to hold off purchasing which creates more uncertainty. A good dose of confidence would be great right about now.

tidester, host
SUVs and Smart Shopper

oldfarmer50

"...I am unsure on matters such as warranty enforcement..."

I had the same thoughts last year when I bought a Mitsu. The media had them dead and buried in the US. I took a gamble, got a good price , and they're still here.

I think gamblers have a saying "scared money don't win".

omegagen

because it is obvious that the price of cars, especially the big 3, are out of line with what people can/are willling to pay! This is a harsh statement..."I don't think many of the big 3 cars are worth $30K+." A few are, but most are not! Hence, that is just ONE reason of a list of many that is leading to their demise.

I've been in the market for a Dodge Charger, Daytona Edition or SRT-8, and although Dodge is offering huge discounts on the cars IMHO their still not worth what their asking. Why do I say that? Well, if the parent company is about to go bust where is the value in the product? It's just not there! I know we "think" we need the big 3 to survive, but the market is FORCING them to reorganize. The government can pour all the money in the galaxy on them, but it will be " pi$$in' on a forest fire"...let it burn! After the "fire" things will slowly become green again...it's has to happen! It'll hurt, but it will get better.

In conclusion, the dealerships I've come across are in such denial it's sad and scary. Three of the dealerships are still asking $29-34K for a leftover '08! The cars in 2008 stickered for $39K-41K. Now you say whoa! That's alot off, but actually the MSRP is out of line with what the market WANTS to pay. The correct MSRP is $30-32K, this is more in line with what it's worth...new. Of course, some will pay 39-40K, but MOST haven't and won't, therefore, they've come to this crossroad. Think about it for years the big three ALWAYS have the biggest rebates. Why? Because they weren't moving at their list price. Sure the foreign maufacturers offered rebate, but at most $1K off.

Well that's my take on this mess! Of course, it can't be ruled out that I am NUTS for considering a vehicle from a company that could possibly go bankrupt. Hey I like American V-8's!! Not trying to hijack the thread, but I was trying to stay with the flow of the posts.

imidazol97

>Uncertainty has been injected into the market

That uncertainty has been intentionally increased and prolonged for political purposes in my opinion AND it has had an unintended consequence on the automotive market. The Tuesday night oratory included a criticism and indicated support of the US automakers and should increase confidence in their longevity. At least, I hope it does.

imidazol97

>The salesman became quite obtuse and informed me that he had no idea what I was talking about.

Stop by your local Accord dealer or Lexus dealer and see if they're giving great discounts in these hard times. Nobody is selling what they were.

dino001

What you are seeing now is dealers ready to sell at small profit or small loss. Remember, they paid for those cars some amount - if the car sticker is $41K (which of course it was way too high), they probably paid (financed) something like $37K-$38K minimum, probably more unless the mfrs have already gave them some money. The cutomer rebates, dealer incentives, holdbacks and what not come after the sale made, not before.

While you may think the car is worh half of its sticker, but there is no way or incentive for dealers to actually offer that price. It's cheaper for them to pay interest (e.g. 10% APR of $37K is $3.7K/year, not $15K you want them to write off) on the inventory than give that to you. What you want is essentially a liquidation sale, where everything trully must go even at big loss. It may happen, not just yet and not necessarily at your levels (think Circuit City prices in first week of their closing sale).

If you want a true market price, go with slightly used.

kyfdx

Prime is 3.25% now..

Dealers who were in good financial shape heading into this mess probably pay that rate to floor their inventory...

So, that $30K car is only $82/mo. to keep on the lot... While that adds up over time, it isn't enough to incentivize a dealer to knock an extra $1000 off a car, just to get rid of it...

If the manufacturer doesn't add incentives, the dealer pretty much has his hands tied... as far as price..

regards,
kyfdx

dino001

That's right. I didn't know dealers could get prime, so I bumped it up. Anyway - it even strengthens my case: they won't sell something half off just because it doesn't sell.

tidester

The Tuesday night oratory included a criticism and indicated support of the US automakers...

So what are customers to do? Stay on the fence as omegagen proposes?

tidester, host
SUVs and Smart Shopper

dhamilton

anyone in a commissioned sales position give up all their paycheck to anyone who just walked/called in and said "I just want your best price"?

Because your
1. Handsome
2. Nice
3. Have been so trampled on by society someone is sure to feel sorry for you.

Please do the smart thing.....1. Research, figure out what is both possible, realistic, and reasonable, and then go offer that.

The best price is still to high regardless of what we say. Be a smart informed consumer.

tidester

anyone in a commissioned sales position give up all their paycheck

I don't think it's an "either-or" proposition. "Best price" obviously has to include commission.

tidester, host
SUVs and Smart Shopper

golic

From what I have seen in the market place today is that most lenders are moving away from prime and using LIBOR during the renewals.

I would venture to guess that most floor plans are annual renewals, so the enjoyment of a low interest may be coming to a halt.

omegagen

dino & kyfdx...you all have made some valid and informative replies. Aside from just stating my view of things, I also was looking to hear what everyone else had to say.

If the bank has lent the dealers money at prime like kyfdx says even at prime with few to no sales that will add up over time. Sure it ain't much on an individual basis, but multilpy that by the cars that haven't sold. What happens to cars that don't sell? I read somewhere that they end up selling it to an autioneer at a lost. Then the car is considered used and sold as such...True?

With GM & Chrysler possibly or probably going to have to file Chp.11 I am more cautious with this car purchase than I have ever been before. I feel that is most people's sentiment. The current asking prices may be the best the dealer can do, but the price, regardless of whether he takes a loss, has no "support" due to their financial troubles. They'll have to as we say on the coast..."fish or cut bait".

What mess we're in!!! I guess with all the "cheap" money going around in the past 8+ years the "chickens had to come home to roost"! A depression during my life...well ain't that just great!!!!

golic

Ome-

From an accounting standpoint, when you are in the worst financial crisis in a few decades, the last thing you do is start creating larger losses. It makes no rational sense to sell something at a 5K loss, just to move it off of your books.

Whats missing are the days when Joe six-pack would come into the dealership having done no research and agreeing to pay top dollar for a car. When you have 20-30 of those guys coming in every week, you can take a loss on other deals to work your volume.

You will never see a dealer offer liquidation prices, because when it gets to that point - the dealer has long been cut out of the picture and the credit holders are doing whatever they can to get repaid with whatever is left.

Sure it seems foolish for salesman to stair you in the eye and pretend like things are great, but what do you expect them to say...OMG I haven't received a decent commission in 3 months and I am worried how I am going to feed my family? Its sales - no salesman is ever going to tell the you the sky is falling! Heck, I just got a flyer from a real estate agent advising me how I can take advantage of the upcoming heated spring market...

oldfarmer50

"...what do you expect them to say...I am worried how I am going to feed my family?..."

I thought that was standard practice with sales people. :confuse:

"...a flyer from a real estate agent advising me how I can take advantage of the upcoming heated spring market..."

He was telling you that he could help you burn your house for the insurance money. :P

Mr_Shiftright

I got kinda ticked off at car salesmen the other day. I sent a friend to my favorite Toyota dealership. They treat you really well there, and they treat everyone I send there well, too. ANYWAY, they quoted her what I thought was a great price on a loaded Camry.

So, she tries one or two other dealers that are more in her area, and she gets a quote that is literally *impossible*.

So she doesn't go back to the dealer I recommended, then goes to the "great quote" only to be oversold on all this other stuff to make up for the impossible quote she got---in the end paying more.

Ticked me off! :mad:

mikefm58

only to be oversold on all this other stuff to make up for the impossible quote she got---in the end paying more.

Did they hold a gun to her head and make her buy all that over priced "stuff"? I'm sure we all know the most important word in negotiations.....No.....