New car price - used car allowance = the difference.
It doesn't matter if you get a smokin' deal on the new car if they aren't giving you the right value for the trade-in. Just as it doesn't matter if they give you $3K more than anyone in their right mind would for the trade-in if they're charging MSRP for the new one.
If you just negotiate on the difference, you'll be fine. Plus which, in many states you only pay sales tax on the difference, which is a nice side benefit, as compared to paying the full boat tax on the new car, which is what happens if you sell your old car privately.
There has been a full page ad in both every day for why GM is thankful we are supporting them and explaining the reasons we should all be behind GM
On the west coast I see that ad in our papers every day as well. Last time I checked (about 9 years ago), a full page ad ran for about $5000/day in a major paper. Yes they are sopending a ton of money on the ads. $50k to $100k per day in Canada?
Anyways I don't care, it's their money and their ads, and their marketing budget.
I don't like when a custoner throws in a trade after 1 hour of negitations, and then expects $3000 over-book for it "because dealer A said they'll pay me that much" based on a phone conversation alone.
That over the phone conversation didn't metion the fact that $3000 came from the rebate that the customer received as a discount here during negotiations, and now there's no room left.
It just adds time to the transaction.
For us it's actually easier to do out the door pricing too. We know where you the customer wants to be, we know where we gotta be, and we can balance our gross accordingly by putting more or less into the trade or into the deal.
Say you want a car that costs $25k. The rebates on it are $5k, and there's another $2k in room to move.
So you know you have $7k of room to move.
You have your trade which you want $10k for but you'll be ok if you get $8k.
Realistically it's probably worth $6k.
So you can negotiate the selling price down from $25k to $18k. You want $10k for the car, so you present an offer of $8k plus fees and taxes.
The dealer will say no way, and will come back at $12k (car worth $4k less than you want) plus fees taxes.
Dealer might say no, and might walk you, or if they really want they'll get more money for trade and come back with an offer of $10k which you'll be happy with and they can live with.
Deal is done, and you drive awaw happy. It took about same amount of time as negotating only a selling price would take except you got both transactions done.
Whether the offer is firm or you offer slightly lower is up to you. If you don't like the back and forth, then make the offer firm. Expect the sales person to do his job and try to bump your offer up, but be polite, respectful, and firm with your offer.
Me personally, I would offer a few hundred less, they might accept it, but will probably try the bump. It gives you some wiggle room and also lets the sales person think he's bumped you, which in reality, he has, but it was in your fluff anyway. But by all means, whatever final price you determine, stick to it. If you don't, he may only bump you to what amounts to a few bucks a month, but you won't feel good about your purchase.
I actually meant it to say it was simple. I guess I completely failed . What I was trying to get across is breaking the process in stages is unnecessary and makes things longer and more complicated. It of course does come to the final OTD, but to get that offer correctly you actually need to get a correct idea about ingredients - otherwise that OTD number is going to be either too high or too low.
I pretty much agree with you guys. You go in with the idea that your trade plus $X is your deal. Then you try to make that one. You'll do just as well if not better than breaking in down into parts. I know the more parts I break it into the more chance there is that I'll screw up one part.
I will say that I don't get hung up on nickles when we're getting close so while not a baby seal I'm not by any means a grinder.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
"That's exactly what I do. Negotiating an OTD price also means that you won't have to worry about added on doc or clerk fees."
Exactly...asking for an OTD price is the most direct way to a price. I suspect too many customers get lost trying to decihper all the fees. I cant think of any scenario where an OTD price will not come into play. We ALL pay an OTD price.
Exactly...asking for an OTD price is the most direct way to a price
Though I do agree with you that OTD price including everything is all that matters. You still have to know exactly how it's determined. Why? Because that's how the contract is written with all kinds of clauses that protect the dealer if THEY mis-calculate things like the sales tax. Nowhere in the contract does it say "This final OTD price is the final price with no recourse on the dealer".
I got myself in trouble once negotiating just an OTD price with a vehicle where my trade in was a lease that I was buying and then trading it in since the trade in was higher than the lease buyout. The dealer "forgot" to charge sales tax on the leased vehicle and it turned in to an ugly scene 2 days later when they realized they were wrong.
It sounds simple...but...don't forget the "added dealer fee" the "battery disposal fee", "tax, title, license fee","tire disposal fee"" or whatever...some of those fees are "pre-printed" on that final sales sheet...and then...,.the F&I guy tells you that this fee is "non-negotiable". I ran into that problem twice in the last two of my buying experiences....so when I got up and started walking out...and he asked me what else he could do...I told him to get that extra fee "added onto my trade-in allowance. It worked both times. It is very difficult to find out what is on the "final sheet" ahead of time (unless you call ahead and ask for the "hidden fees") so that you can properly give an "out the door" price offer.
I agree that the final OTD price which includes all taxes and ttl is what really matters in the end.This would be a much easier option if you were buying a new car.If it`s a used one,then it becomes slightly complicated. Also,once you have negotiated the final OTD price with taxes,i don`t think it matters if the dealer prepares a sales contract with x fees, y fees, dealer fees etc etc as long as it comes to the final agreed price. I bought a couple of cars previously wherein we agreed on a final OTD price but when the sales contract was given it included all types of fees--prep fees, dealer fees,taxes etc,,,but the total came up to the final agreed upon OTD price.
The salesperson you are dealing with should know what these "fees" are and should allow for them in any dealings they have with you. If you negotiate an OTD price and then they add on fees there is something wrong. In reality I wouldn't care what fees they charge me as long as they adjust the price of the car to compensate.
Also since it was discussed I also try to keep the trade in separate in my negotiations. Reasons are that 1.) I usually drive all the value out of a car (currently I am in a 9 year old 158K mile car and plan on keeping it) and I know that any trade in value is going to be really low. and 2.) I will have alternate disposal methods so I want to know the true trade in to compare prices.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
What if he really insists on seeing the trade in car before we negotiate the purchasing car`s price?
The dealership should look at the trade before negotiations! Because if you don't you will be grinding away on the price and than have to waste time having them go look at your trade. A trade is always benefical for both parties. Especialy if you are in any equity situation. The reason it is good is because lets just say you are a "grinder". The dealer can always make the numbers work with a trade in.... (ussualy )....
If anyone has a trade just have the dealer look at it before you negotiate.
I read some of those books/publications and maintain that particular piece of advice is ... well, ill-advised. I think it simply assumes such level of illiteracy of the consumer that it's almost insulting.
Or perhaps it's me and I give the general public too much credit despite clear evidence to contrary (screamer ads that work, "$300/month" mentality, etc.). I still think it's better to give advice like "buying a car is a 5th grade math problem, so if you graduated high school here are those basic formulas", rather than "I know you are too stupid to handle more than one number at a time, so break it into pieces and make everybody's life including yours, more difficult and spend whole saturday at a dealership".
I would never conceal my trade. I do make clear that I can run around them in circles when it comes to math, so there is no point in making some funny numbers or shuffling them around. So far it worked all but one time, when the salesguy came back from his "manager" with a "four-square no disclosure" nonsense of "21K, blah, blah, blah $400 per month" (not real numbers) and would make large eyes when I started asking what's the interest and other questions. You know how well that went.
If anyone has a trade just have the dealer look at it before you negotiate.
IMHO best to know the price of the new car and their price for the trade-in car.
With my previous car we got almost to the final number and I said I would buy if they knocked another $1000 off the new car, and gave me $1000 more for my trade in. My wife thought I had a lot of nerve. But, they did it.
Also, as GP says, you might decide to sell the trade in privately to get a better price for it.
I think you will want to know the actual numbers for both to make a logical decision. Once when we were doing preliminary research and I didn't want to get bogged down in negotiations we took the other car with us so they couldn't start working out the numbers. Sorry, we brought the wrong car today. That must drive you sales guys crazy, but it saves time if you are just checking around to see what the cars feel like to sit in them. Then they can't steal your keys until you buy too
So , isellhondas,you are a dealer,, what would you prefer? Do you prefer the buyer be upfront about his trade even before looking or negotiating for the new car`s price? Or do you prefer the buyer select his vehicle,,,then negotiate the purchase price and the trade in for a final OTD price? i know it is really very easy for a salesman to "smell" a hidden trade- bcos the buyer has to answer the question upfront whether he has a trade or not.So inevitably the salesman would know.What would be your plan of approach?
I do not see what the trade has to do with the deal either before or after the price of the new car is nailed down. Simply give less for trade if car is sold at invoice.. if the car is sold at MSRP give the most for the trade.
In order to make a good OTD offer, one has to know what the market value of the new car and your trade are. The only way to determine that is to keep things separate. There are more than one way to dispose of your trade than to give to the store that is selling you the new car.
Private sale is one. CarMax is the other one. However, the best way is to shop your trade directly to stores that sell your trade new. For example, you are trading a Ford for a Honda. Honda store will give you much less than the Ford store, because the Honda will more than likely to auction your car off. In order to make any money at the auction, Honda will hit you well below the book, because they don’t know what they are going to get for your car two weeks from today when they will take it to the auction. They also have to pay transport to the auction and auction fees. Ford store more than likely will put your car on the lot, thus they might give the actual auction value, because they are saving on transport and fees.
Here is what I generally do when I have a trade. I determine what the market value of the new car is by getting quotes over the internet, and/or negotiating over the phone. This way the salesman doesn’t know if you have a trade and doesn’t have an opportunity to ask you probing questions. Ones you have that information in hand, go to CarMax and couple of stores that sell your trade new and ask for a bid. Now you approximately know what the market value for your trade is. Next, go the store that gave the lowest quote for the new car and ask for a bid for your trade. If it is too low, ask them to match the highest bid. If they refuse, tell them that that there are two other stores that are willing to match their new car price quote and you will go to them to see what they are willing to offer for your trade.
The problem I encountered once was this- I took in my trade in car before buying another car.The dealer lowballed me on the trade.And he would not negotiate on the new car price saying that he could not give me more on the trade.So how do I proceed further regarding my purchase? And it does make it easier if you are buying a new car when trading in.Otherwise you have to negotiate a lot on the used car price and the trade in price. Once,I was planning to buy a used car, and made an offer to the dealership online,he emailed me back with the Kbb price saying he is selling it for less than KBB price.I replied that Kbb is not an absolute value,only a rough indicator.He replied saying he is offering 1000$ less than the KBB. So I told him - "I would buy his car at Kbb but would he give me the Kbb value for my trade in ,,assuming a fair condition not good[ even though the car was in a very good condition with low mileage ].Then he replied that he would have to look at the market rate,blah,blah,blah,, and how he has overhead,expenses,costs, etc.etc. My question is - the dealer has every right to sell at whatever price he wants but when I give him an offer,,,he states and lectures about Kbb --saying he is giving it less than kbb etc,,,and then when I ask him for a kbb trade value,,, he is defensive and trying to justify himself into giving a lower trade in value. It`s his car,he can sell it for whatever he wants,I have no problem with that but having made the kbb pitch,, it cant be one way,,,only giving a quote for the retail value in excellent condition but less than average condition trade in Kbb value for a well maintained low mileage car. Any thoughts?
The problem I encountered once was this- I took in my trade in car before buying another car.The dealer lowballed me on the trade.And he would not negotiate on the new car price saying that he could not give me more on the trade.So how do I proceed further regarding my purchase?
What happened to you had nothing to do with the order of offers. There are really two possible things that happened: either your idea about value of the trade and value of the new car were wrong (dealer's offer was good), or you were right and the dealer's offer was bad/wrong/non-competitive. To find out which one was it you have to do more research. There is nothing wrong with taking a pass and either buying from a competitor (if their offer happens to be better) or coming back for the same offer if you find out your first idea was wrong. Again - IMHO, nothing to do with you allowing them to appraise your car early.
but then have the dealer do the paperwork and still get tax benefit... basically you trade your car to the dealer, but then the dealer immediately sells it to your private buyer... i did this and got the tax benefit...
Here's another option. As someone else already stated, take your car to Carmax for an appraisal. They will give you a cash offer that will be good for 7 days, but it will be on the low end of what you might get on a trade, probably not by much though.
Now go make a purchase offer on whatever vehicle you're interested in. Tell the salesman upfront that you do have a trade, but you'd like to first negotiate a purchase price that does not take in to consideration the trade as you've already had it appraised at Carmax and also may sell it on your own as well. Tell him, regardless of what he offers for your trade that you will still buy the vehicle you're interested in from him.
After negotiating your price, work on the trade, tell him what you need, taking in to account the sales tax issues with trading versus selling yourself or doing the Carmax thing. In my county, a break even trade amount is 6% less than what Carmax offfered, since I wouldn't pay sales tax on the dollar amount assigned to the trade.
A few years ago I bought a used car from a dealer and they insisted on a certified check. No problem, I assumed that a CC gave the dealer some security against bounced personal checks. I've also used certified checks in private party transactions for the same reason. A CC also gives me proof of payment if anything gets weird.
Now I see many private party ads which state that they will not accept CC checks, cash only.
This brings two questions to my mind. First, are bogus CC becoming such a problem that even dealers won't accept them? Second, without a CC receipt as proof of payment what documents should you request? Would a bill of sale with the price paid be sufficient if questions later arose?
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Certified checks, and money orders, can be forged and can even have a stop payment made on them. I actually did witness a few money orders being returned due to a stop payment placed on them. It was done in error and the currency exchange responsible bent over backwards to correct the issue, but it showed me that it is possible.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Nothing is 100% safe, even bad certified checks, money orders, and counterfeit bills have been passed. That's why I'm hesitant on selling any vehicle of substantial value myself. IMO, cash would be the safest if you have one of those special pens.
. First, are bogus CC becoming such a problem that even dealers won't accept them?
Here is one example from way back; The Washington Post/May 21, 1996 By Serge F. Kovaleski They are con artists driven by ideological fervor, anti-government activists who support themselves and their causes by bilking the government and businesses out of millions of dollars - and their numbers are growing.
Right-wing militias and other like-minded groups are operating schemes in nearly every state, in a movement of mounting concern to law enforcement authorities. It is not just the government being targeted, as the recent case of the Freemen in Montana shows, but banks, car dealerships, clothing outlets, gun stores and unwitting individuals viewed as somehow connected to the government, according to investigators.
The method of fraud involves bogus certified checks and money orders produced so artfully that banks have accepted them. Their supposed value is derived from phony liens placed against property. The groups also write checks for twice the amount due and then demand a refund of the difference.
Once a fringe occurrence, this fraud has evolved into a pervasive problem over the past three years, paralleling the nation rise of so-called right-wing patriot groups. Prosecutors estimate that more than a half a billion dollars in fake checks and money orders may have been passed to public agencies, companies and individuals by these organizations, and millions of dollars' worth of them have been accepted - causing hardship and havoc once their fraudulent nature has become known. At the same time, these groups sometimes receive largess, mostly farm subsidies, from the very government they decry.
"...these groups sometimes receive largess, mostly farm subsidies..."
Well I guess I won't take any certified checks from anybody who comes shopping with an M-16 and shouts "sieg hiel". I might asks for some advice on how to get farm subsidies though.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
It`s his car,he can sell it for whatever he wants,I have no problem with that but having made the kbb pitch,, it cant be one way,,,
That is your answer.
I think you’re all hung up with the “justifications” for what is being bought and what you are trading. I don’t feel you have to provide any justification for what you are willing to pay. Can the dealer really give you a good reason why you should pay more if your research has been done correctly? The same holds true for any reason you might offer the dealer as to why you have your number.
Keep it simple. Do your research, offer a number and if that number isn’t good enough to make the deal walk, and don’t spend all day deciding to do it.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
deltheking (just curious about how you came up with that user name).
What I've found, in all the years I've been in this thread (over a decade) is that most buyers are afraid to say "no". I've even run into a few salespeople here that are afraid to say "no" to a deal, too.
You can get a pretty good idea of what any new car is selling for by looking here at Edmunds, and by looking in your local newspaper car ads. In rare situations, you'll be able to buy a car under a dealer's cost. But again, that's rare (and usually limited to a "dog of a car" in an undesirable color that's been sitting on the lot for awhile). Everything else, the dealer is going to make money on. Watching the newspaper ads, looking at the stock situation of the dealer you prefer, on the model you want, will tell you a good bit about how much to offer on any particular new car.
If you've got a trade, shop that trade to a couple of different dealerships. Ask them how much they'd give you for it as a straight buy. You'll get a fair indication what it's worth in your market. Also, use private seller ads in the local newspaper to see what they're asking for your used car. That would be a private party sale, so don't expect a dealer to give you that number. But, it's another data point.
KBB, Black Book, Edmunds is another good resource for trade values. Come up with a number you want for your trade based on all of that.
Now you have two numbers.....one you're willing to pay for the new car, and one number you want on your trade.
Like others, I think "hiding" a trade just adds to frustration (for you and the dealer) and doesn't net a better deal. Your trade is worth what it's worth to the dealership.
For simplicity's sake, let's say you put a number of $20,000 for the price you're willing to pay for the new car. Further, let's say you've done some research and say $10,000 is the number you want for your trade. The difference is $10,000.
That's the number you give to your dealer. If the dealer comes back and says they need $3,000 more to add to the deal, either they're off on their numbers, or your off with yours (or, they're "low balling" you).
Don't be afraid to get up and walk. You can be polite about it. But, you'll find out in pretty short order whether they're serious about their number or not by getting up to leave.
If every dealer you visit turns down your offer, you have to rethink either what your trade is worth, or what they'll sell the new car for.
But,if your deal is legit, where they make a little money, and they can make decent money on your trade, they're likely to "make the deal".
You may have a trade that the dealer has no use for. It may be a car that nobody wants, a car that will bring thousands of dollars less than book at the auction if it sells at all!
"You may have a trade that the dealer has no use for."
As I discovered when trying to trade my beloved '99 Chrysler 300M on my new Acura TL! But, dealer #2 gave me 50% more on trade than dealer #1. Too bad, I really wanted to buy from #1, but it was too much of a difference. Both dealers didn't fight me too much on my offer on the TL (invoice, but I got death stares at just the mention of the word "holdback!"). So, I'll believe a fair deal was struck, but #2 probably got me on trade. My choice to be lazy...
'21 Dark Blue/Black Audi A7 PHEV (mine); '22 White/Beige BMW X3 (hers); '20 Estoril Blue/Oyster BMW M240xi 'Vert (Ours, read: hers in 'vert weather; mine during Nor'easters...)
Also since it was discussed I also try to keep the trade in separate in my negotiations. Reasons are that 1.) I usually drive all the value out of a car (currently I am in a 9 year old 158K mile car and plan on keeping it) and I know that any trade in value is going to be really low. and 2.) I will have alternate disposal methods so I want to know the true trade in to compare prices.
You would really bring in an 11 (?) year old Hyundai to a dealership to trade? Yikes!
The understatement of the year is that the trade in value is going to be really low. They'll "give" you $400 for it. OR, sell it yourself for $1,200 the first day your ad comes out in the paper. Seems like a no-brainer.
In order to make a good OTD offer, one has to know what the market value of the new car and your trade are. The only way to determine that is to keep things separate. There are more than one way to dispose of your trade than to give to the store that is selling you the new car.
Good point. I would keep things seperate as well. Only then will you actually know what you will be getting for your trade-in.
When we bought new in 04' the salesmen asked if we had a trade-in. I said yes, but that we wanted to work the numbers for the new car first. The dealership did a test drive while we negotiated new car price (must have been flooring it pretty good as gas gauge was noticeably lower) and made an offer on our 10 year old Buick Century Wagon. Of course the offer was too low. So, we bought their new car and sold our old car for 3 times what the dealership offered.
Good point. I would keep things seperate as well. Only then will you actually know what you will be getting for your trade-in.
Absolutely not true. When I was working on my last two cars, the dealers gave me a full itemization of my deal. It's really not that hard, Jip. X is car price, Y is trade, Z is fees, T is tax and I is interest (if applicable). All numbers can be checked back and forth. It all checked out and final papers were just the same or within a few bucks in not pennies.
I am trully puzzled - what's so hard about handling five-six numbers at the same time so they have to be broken into "one at a time" approach. Unless you have no intention of actually trading it and are ready to sell it yourself - why wait for the offer and be disappointed after just hammering a new car price. :confuse: :confuse:
I don't know why (considering I'm young), but I've never liked the ride quality of the BMW (or Mercedes) that I've driven. They all seemed too firm for my liking & the BMW seats were extremely uncomfortable. However, I do like the ride quality of the 2008 Chevy Impala - soft & quiet. The Lexus LS was a bit too quiet & soft & made me car sick. It's a shame I'm not old enough to justify owning an Impala. The credit application gets rejected due to the fact that I don't have grey hair.
When I was working on my last two cars, the dealers gave me a full itemization of my deal. It's really not that hard,
That would be okay, as long as it was itemized (seperate). I would want to see car price, trade price, fees, etc. I just wouldn't care for a deal where the salesman comes out and says, "with your trade-in the price of Car X is $15,000". You can get a rough guesstimate of your trade-in's value with weeks of research, but still you don't know a dealerships financial situation or what profit margins they are shooting for at that time. So, definitely get a number on a trade.
But, my primary focus is on buying the car I want at the price I want to pay. My "older" car trade-ins are secondary. If I can't get a decent price, which I usually don't, then I just sell the car myself.
I don't know why (considering I'm young), but I've never liked the ride quality of the BMW (or Mercedes) that I've driven.
It is an aquired taste like fine. It seems logical to most Americans that the softer the ride and the lighter the steering is makes a more comfortable car. But to get that spongy feeling you lose the feel of the road and the lack of precise steering. Since half the population in America is overweight it might seem that cars with big interiors and big seats ( one reason there are so many mini vans and SUVs around), and that are softer riding and have light steering are more comfortable, but to get a sense of the driving surface, firmer ride, firmer steering, better cornering, you have to go to a BMW, MB or even VW. You won't get that in an Impala...which is boring to drive.....just a living room couch with a steering wheel. If you equate loose steering, soft ride, big seats with no side support as more comfortable....then there's lots of cars to choose from. Cadillac is becoming more European in road handing ability because GM knows the people who buy these cars want to experience the "feel of the road". Think of it as the difference between driving a limousine or hearse compared to a Corvette, only not as extreme.
What does it really matter how they got to "C" if you are happy.
Back in my youth I always negotiated at "C" or as you may say the difference. A= sales price less B= trade in = C the difference. I remember telling one salesman, just give me a $1 for the trade in, I don't care- but all I willing to commit to is "c".
I try to be fully informed as possible today when buying a car and I don't want my salesman to pull any surprises, so I don't pull any either. My last experiences, I went out to CarMax and this other car purchases, and had two "valid" quotes for purchase of my trade-in.
When it came to the trade-in question I simply said, if we can agree on a making a deal, I will interested in trading my old car in, so you are more than welcome to inspect it as we talk (I then did give them the valet key - yes just some old school paranoia on my part).
First time I did this...dealer came in under and I told them I had a better quote, and they moved up to match. Which was more than a match since the sales tax thing was then factored in.
Last time i did this..dealer blew away both quotes by $1,500 and I lost my poker face and agreed without trying for more.
I don't think you have to keep the separate, but you can have two simultaneous transactions in the works. Of course you can ALWAYS get more going ebay/craigslist..but honestly I just don't have the patience or nerves to have people come to my home/office and then take a payment.
That 1999 Chrysler is a great example of a used car that nobody wants at any price unless there is something exceptional about it like extreme low miles.
Sometimes deals are lost because the appraiser is scared to death the car will "no sale" at the auction like the last three did. As a result, the offere is so low the customer walks.
Another store makes a decision to pay more and a deal is struck.
Three months later the Chrysler finally gets bought by a wholesaler and hundreds of dollars are lost in the process.
Comments
New car price - used car allowance = the difference.
It doesn't matter if you get a smokin' deal on the new car if they aren't giving you the right value for the trade-in. Just as it doesn't matter if they give you $3K more than anyone in their right mind would for the trade-in if they're charging MSRP for the new one.
If you just negotiate on the difference, you'll be fine. Plus which, in many states you only pay sales tax on the difference, which is a nice side benefit, as compared to paying the full boat tax on the new car, which is what happens if you sell your old car privately.
Good luck, and try to keep it simple.
On the west coast I see that ad in our papers every day as well. Last time I checked (about 9 years ago), a full page ad ran for about $5000/day in a major paper. Yes they are sopending a ton of money on the ads. $50k to $100k per day in Canada?
Anyways I don't care, it's their money and their ads, and their marketing budget.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
I don't like when a custoner throws in a trade after 1 hour of negitations, and then expects $3000 over-book for it "because dealer A said they'll pay me that much" based on a phone conversation alone.
That over the phone conversation didn't metion the fact that $3000 came from the rebate that the customer received as a discount here during negotiations, and now there's no room left.
It just adds time to the transaction.
For us it's actually easier to do out the door pricing too. We know where you the customer wants to be, we know where we gotta be, and we can balance our gross accordingly by putting more or less into the trade or into the deal.
Say you want a car that costs $25k. The rebates on it are $5k, and there's another $2k in room to move.
So you know you have $7k of room to move.
You have your trade which you want $10k for but you'll be ok if you get $8k.
Realistically it's probably worth $6k.
So you can negotiate the selling price down from $25k to $18k. You want $10k for the car, so you present an offer of $8k plus fees and taxes.
The dealer will say no way, and will come back at $12k (car worth $4k less than you want) plus fees taxes.
Dealer might say no, and might walk you, or if they really want they'll get more money for trade and come back with an offer of $10k which you'll be happy with and they can live with.
Deal is done, and you drive awaw happy. It took about same amount of time as negotating only a selling price would take except you got both transactions done.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Me personally, I would offer a few hundred less, they might accept it, but will probably try the bump. It gives you some wiggle room and also lets the sales person think he's bumped you, which in reality, he has, but it was in your fluff anyway. But by all means, whatever final price you determine, stick to it. If you don't, he may only bump you to what amounts to a few bucks a month, but you won't feel good about your purchase.
2018 430i Gran Coupe
I will say that I don't get hung up on nickles when we're getting close so while not a baby seal I'm not by any means a grinder.
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Exactly...asking for an OTD price is the most direct way to a price. I suspect too many customers get lost trying to decihper all the fees. I cant think of any scenario where an OTD price will not come into play.
We ALL pay an OTD price.
Though I do agree with you that OTD price including everything is all that matters. You still have to know exactly how it's determined. Why? Because that's how the contract is written with all kinds of clauses that protect the dealer if THEY mis-calculate things like the sales tax. Nowhere in the contract does it say "This final OTD price is the final price with no recourse on the dealer".
I got myself in trouble once negotiating just an OTD price with a vehicle where my trade in was a lease that I was buying and then trading it in since the trade in was higher than the lease buyout. The dealer "forgot" to charge sales tax on the leased vehicle and it turned in to an ugly scene 2 days later when they realized they were wrong.
It is very difficult to find out what is on the "final sheet" ahead of time (unless you call ahead and ask for the "hidden fees") so that you can properly give an "out the door" price offer.
Also,once you have negotiated the final OTD price with taxes,i don`t think it matters if the dealer prepares a sales contract with x fees, y fees, dealer fees etc etc as long as it comes to the final agreed price. I bought a couple of cars previously wherein we agreed on a final OTD price but when the sales contract was given it included all types of fees--prep fees, dealer fees,taxes etc,,,but the total came up to the final agreed upon OTD price.
Also since it was discussed I also try to keep the trade in separate in my negotiations. Reasons are that 1.) I usually drive all the value out of a car (currently I am in a 9 year old 158K mile car and plan on keeping it) and I know that any trade in value is going to be really low. and 2.) I will have alternate disposal methods so I want to know the true trade in to compare prices.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Those of us who have been in the business awhile will usually be able to smell a "hidden trade".
" Are you going to be trading in your Taurus?"
" Ah...probably not"..that means they are.
" I think I have a friend who may buy it" --Nope, they plan to spring it.
" I may just keep it for a spare car" - Same thing.
Right guys?
The dealership should look at the trade before negotiations! Because if you don't you will be grinding away on the price and than have to waste time having them go look at your trade. A trade is always benefical for both parties. Especialy if you are in any equity situation. The reason it is good is because lets just say you are a "grinder". The dealer can always make the numbers work with a trade in.... (ussualy
If anyone has a trade just have the dealer look at it before you negotiate.
GP
I agree Isell..... You can always tell.
Maybe you could blame Edmunds for suggesting to consumers to not mention the trade untill figures on the purchase vehicle are set :surprise:
No JK.... I know it suggests it one of thise "How to Beat the Dealer books".... :lemon:
Hope everyone had a great Christmas!
GP
How about "Yes, I've got a trade, it's that 12 year old Chrysler behind you. What will you give me for that?"
Is a person like that really holding back a nice BMW that he's waiting to spring on you?
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Or perhaps it's me and I give the general public too much credit despite clear evidence to contrary (screamer ads that work, "$300/month" mentality, etc.). I still think it's better to give advice like "buying a car is a 5th grade math problem, so if you graduated high school here are those basic formulas", rather than "I know you are too stupid to handle more than one number at a time, so break it into pieces and make everybody's life including yours, more difficult and spend whole saturday at a dealership".
I would never conceal my trade. I do make clear that I can run around them in circles when it comes to math, so there is no point in making some funny numbers or shuffling them around. So far it worked all but one time, when the salesguy came back from his "manager" with a "four-square no disclosure" nonsense of "21K, blah, blah, blah $400 per month" (not real numbers) and would make large eyes when I started asking what's the interest and other questions. You know how well that went.
2018 430i Gran Coupe
IMHO best to know the price of the new car and their price for the trade-in car.
With my previous car we got almost to the final number and I said I would buy if they knocked another $1000 off the new car, and gave me $1000 more for my trade in. My wife thought I had a lot of nerve. But, they did it.
Also, as GP says, you might decide to sell the trade in privately to get a better price for it.
I think you will want to know the actual numbers for both to make a logical decision. Once when we were doing preliminary research and I didn't want to get bogged down in negotiations we took the other car with us so they couldn't start working out the numbers. Sorry, we brought the wrong car today. That must drive you sales guys crazy, but it saves time if you are just checking around to see what the cars feel like to sit in them. Then they can't steal your keys until you buy too
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Or do you prefer the buyer select his vehicle,,,then negotiate the purchase price and the trade in for a final OTD price?
i know it is really very easy for a salesman to "smell" a hidden trade- bcos the buyer has to answer the question upfront whether he has a trade or not.So inevitably the salesman would know.What would be your plan of approach?
Private sale is one. CarMax is the other one. However, the best way is to shop your trade directly to stores that sell your trade new. For example, you are trading a Ford for a Honda. Honda store will give you much less than the Ford store, because the Honda will more than likely to auction your car off. In order to make any money at the auction, Honda will hit you well below the book, because they don’t know what they are going to get for your car two weeks from today when they will take it to the auction. They also have to pay transport to the auction and auction fees. Ford store more than likely will put your car on the lot, thus they might give the actual auction value, because they are saving on transport and fees.
Here is what I generally do when I have a trade. I determine what the market value of the new car is by getting quotes over the internet, and/or negotiating over the phone. This way the salesman doesn’t know if you have a trade and doesn’t have an opportunity to ask you probing questions. Ones you have that information in hand, go to CarMax and couple of stores that sell your trade new and ask for a bid. Now you approximately know what the market value for your trade is. Next, go the store that gave the lowest quote for the new car and ask for a bid for your trade. If it is too low, ask them to match the highest bid. If they refuse, tell them that that there are two other stores that are willing to match their new car price quote and you will go to them to see what they are willing to offer for your trade.
And it does make it easier if you are buying a new car when trading in.Otherwise you have to negotiate a lot on the used car price and the trade in price.
Once,I was planning to buy a used car, and made an offer to the dealership online,he emailed me back with the Kbb price saying he is selling it for less than KBB price.I replied that Kbb is not an absolute value,only a rough indicator.He replied saying he is offering 1000$ less than the KBB. So I told him - "I would buy his car at Kbb but would he give me the Kbb value for my trade in ,,assuming a fair condition not good[ even though the car was in a very good condition with low mileage ].Then he replied that he would have to look at the market rate,blah,blah,blah,, and how he has overhead,expenses,costs, etc.etc.
My question is - the dealer has every right to sell at whatever price he wants but when I give him an offer,,,he states and lectures about Kbb --saying he is giving it less than kbb etc,,,and then when I ask him for a kbb trade value,,, he is defensive and trying to justify himself into giving a lower trade in value.
It`s his car,he can sell it for whatever he wants,I have no problem with that but having made the kbb pitch,, it cant be one way,,,only giving a quote for the retail value in excellent condition but less than average condition trade in Kbb value for a well maintained low mileage car.
Any thoughts?
Go to another dealer.
What happened to you had nothing to do with the order of offers. There are really two possible things that happened: either your idea about value of the trade and value of the new car were wrong (dealer's offer was good), or you were right and the dealer's offer was bad/wrong/non-competitive. To find out which one was it you have to do more research. There is nothing wrong with taking a pass and either buying from a competitor (if their offer happens to be better) or coming back for the same offer if you find out your first idea was wrong. Again - IMHO, nothing to do with you allowing them to appraise your car early.
2018 430i Gran Coupe
Now go make a purchase offer on whatever vehicle you're interested in. Tell the salesman upfront that you do have a trade, but you'd like to first negotiate a purchase price that does not take in to consideration the trade as you've already had it appraised at Carmax and also may sell it on your own as well. Tell him, regardless of what he offers for your trade that you will still buy the vehicle you're interested in from him.
After negotiating your price, work on the trade, tell him what you need, taking in to account the sales tax issues with trading versus selling yourself or doing the Carmax thing. In my county, a break even trade amount is 6% less than what Carmax offfered, since I wouldn't pay sales tax on the dollar amount assigned to the trade.
Now I see many private party ads which state that they will not accept CC checks, cash only.
This brings two questions to my mind. First, are bogus CC becoming such a problem that even dealers won't accept them? Second, without a CC receipt as proof of payment what documents should you request? Would a bill of sale with the price paid be sufficient if questions later arose?
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Here is one example from way back;
The Washington Post/May 21, 1996
By Serge F. Kovaleski
They are con artists driven by ideological fervor, anti-government activists who support themselves and their causes by bilking the government and businesses out of millions of dollars - and their numbers are growing.
Right-wing militias and other like-minded groups are operating schemes in nearly every state, in a movement of mounting concern to law enforcement authorities. It is not just the government being targeted, as the recent case of the Freemen in Montana shows, but banks, car dealerships, clothing outlets, gun stores and unwitting individuals viewed as somehow connected to the government, according to investigators.
The method of fraud involves bogus certified checks and money orders produced so artfully that banks have accepted them. Their supposed value is derived from phony liens placed against property. The groups also write checks for twice the amount due and then demand a refund of the difference.
Once a fringe occurrence, this fraud has evolved into a pervasive problem over the past three years, paralleling the nation rise of so-called right-wing patriot groups. Prosecutors estimate that more than a half a billion dollars in fake checks and money orders may have been passed to public agencies, companies and individuals by these organizations, and millions of dollars' worth of them have been accepted - causing hardship and havoc once their fraudulent nature has become known. At the same time, these groups sometimes receive largess, mostly farm subsidies, from the very government they decry.
For more see; militiaAnd even better;
A BOGUS CHECK FOR $80,000; SO SKILLFULLY FORGED THAT IT WAS CERTIFIED AS GENUINE. IT WAS DRAWN ON THE MERCHANTS' NATIONAL BANK AND BORE WHAT PURPORTED TO BE THE SIGNATURE OP E.F. BEDDALL, THE MANAGER OF THE ROYAL INSURANCE COMPANY.
check; bogus check
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Well I guess I won't take any certified checks from anybody who comes shopping with an M-16 and shouts "sieg hiel". I might asks for some advice on how to get farm subsidies though.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Hey, oldfarmer, just what are you growing down there, on your farm? lol
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
That is your answer.
I think you’re all hung up with the “justifications” for what is being bought and what you are trading. I don’t feel you have to provide any justification for what you are willing to pay. Can the dealer really give you a good reason why you should pay more if your research has been done correctly? The same holds true for any reason you might offer the dealer as to why you have your number.
Keep it simple. Do your research, offer a number and if that number isn’t good enough to make the deal walk, and don’t spend all day deciding to do it.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
ROFLOL
But seriously, I hope you aren't writing any of those bad cheques.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
What I've found, in all the years I've been in this thread (over a decade) is that most buyers are afraid to say "no". I've even run into a few salespeople here that are afraid to say "no" to a deal, too.
You can get a pretty good idea of what any new car is selling for by looking here at Edmunds, and by looking in your local newspaper car ads. In rare situations, you'll be able to buy a car under a dealer's cost. But again, that's rare (and usually limited to a "dog of a car" in an undesirable color that's been sitting on the lot for awhile). Everything else, the dealer is going to make money on. Watching the newspaper ads, looking at the stock situation of the dealer you prefer, on the model you want, will tell you a good bit about how much to offer on any particular new car.
If you've got a trade, shop that trade to a couple of different dealerships. Ask them how much they'd give you for it as a straight buy. You'll get a fair indication what it's worth in your market. Also, use private seller ads in the local newspaper to see what they're asking for your used car. That would be a private party sale, so don't expect a dealer to give you that number. But, it's another data point.
KBB, Black Book, Edmunds is another good resource for trade values. Come up with a number you want for your trade based on all of that.
Now you have two numbers.....one you're willing to pay for the new car, and one number you want on your trade.
Like others, I think "hiding" a trade just adds to frustration (for you and the dealer) and doesn't net a better deal. Your trade is worth what it's worth to the dealership.
For simplicity's sake, let's say you put a number of $20,000 for the price you're willing to pay for the new car. Further, let's say you've done some research and say $10,000 is the number you want for your trade. The difference is $10,000.
That's the number you give to your dealer. If the dealer comes back and says they need $3,000 more to add to the deal, either they're off on their numbers, or your off with yours (or, they're "low balling" you).
Don't be afraid to get up and walk. You can be polite about it. But, you'll find out in pretty short order whether they're serious about their number or not by getting up to leave.
If every dealer you visit turns down your offer, you have to rethink either what your trade is worth, or what they'll sell the new car for.
But,if your deal is legit, where they make a little money, and they can make decent money on your trade, they're likely to "make the deal".
I just try to be upgront with my customers and I expect the same from them. They think they are being so smart or so coy but they weren't fooliing me.
You may have a trade that the dealer has no use for. It may be a car that nobody wants, a car that will bring thousands of dollars less than book at the auction if it sells at all!
As I discovered when trying to trade my beloved '99 Chrysler 300M on my new Acura TL! But, dealer #2 gave me 50% more on trade than dealer #1. Too bad, I really wanted to buy from #1, but it was too much of a difference. Both dealers didn't fight me too much on my offer on the TL (invoice, but I got death stares at just the mention of the word "holdback!"). So, I'll believe a fair deal was struck, but #2 probably got me on trade. My choice to be lazy...
'21 Dark Blue/Black Audi A7 PHEV (mine); '22 White/Beige BMW X3 (hers); '20 Estoril Blue/Oyster BMW M240xi 'Vert (Ours, read: hers in 'vert weather; mine during Nor'easters...)
You would really bring in an 11 (?) year old Hyundai to a dealership to trade? Yikes!
The understatement of the year is that the trade in value is going to be really low. They'll "give" you $400 for it. OR, sell it yourself for $1,200 the first day your ad comes out in the paper. Seems like a no-brainer.
Good point. I would keep things seperate as well. Only then will you actually know what you will be getting for your trade-in.
When we bought new in 04' the salesmen asked if we had a trade-in. I said yes, but that we wanted to work the numbers for the new car first. The dealership did a test drive while we negotiated new car price (must have been flooring it pretty good as gas gauge was noticeably lower) and made an offer on our 10 year old Buick Century Wagon. Of course the offer was too low. So, we bought their new car and sold our old car for 3 times what the dealership offered.
Absolutely not true. When I was working on my last two cars, the dealers gave me a full itemization of my deal. It's really not that hard, Jip. X is car price, Y is trade, Z is fees, T is tax and I is interest (if applicable). All numbers can be checked back and forth. It all checked out and final papers were just the same or within a few bucks in not pennies.
I am trully puzzled - what's so hard about handling five-six numbers at the same time so they have to be broken into "one at a time" approach. Unless you have no intention of actually trading it and are ready to sell it yourself - why wait for the offer and be disappointed after just hammering a new car price. :confuse: :confuse:
2018 430i Gran Coupe
That would be okay, as long as it was itemized (seperate). I would want to see car price, trade price, fees, etc. I just wouldn't care for a deal where the salesman comes out and says, "with your trade-in the price of Car X is $15,000". You can get a rough guesstimate of your trade-in's value with weeks of research, but still you don't know a dealerships financial situation or what profit margins they are shooting for at that time. So, definitely get a number on a trade.
But, my primary focus is on buying the car I want at the price I want to pay. My "older" car trade-ins are secondary. If I can't get a decent price, which I usually don't, then I just sell the car myself.
It is an aquired taste like fine. It seems logical to most Americans that the softer the ride and the lighter the steering is makes a more comfortable car. But to get that spongy feeling you lose the feel of the road and the lack of precise steering. Since half the population in America is overweight it might seem that cars with big interiors and big seats ( one reason there are so many mini vans and SUVs around), and that are softer riding and have light steering are more comfortable, but to get a sense of the driving surface, firmer ride, firmer steering, better cornering, you have to go to a BMW, MB or even VW. You won't get that in an Impala...which is boring to drive.....just a living room couch with a steering wheel. If you equate loose steering, soft ride, big seats with no side support as more comfortable....then there's lots of cars to choose from.
Cadillac is becoming more European in road handing ability because GM knows the people who buy these cars want to experience the "feel of the road". Think of it as the difference between driving a limousine or hearse compared to a Corvette, only not as extreme.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Back in my youth I always negotiated at "C" or as you may say the difference. A= sales price less B= trade in = C the difference. I remember telling one salesman, just give me a $1 for the trade in, I don't care- but all I willing to commit to is "c".
I try to be fully informed as possible today when buying a car and I don't want my salesman to pull any surprises, so I don't pull any either. My last experiences, I went out to CarMax and this other car purchases, and had two "valid" quotes for purchase of my trade-in.
When it came to the trade-in question I simply said, if we can agree on a making a deal, I will interested in trading my old car in, so you are more than welcome to inspect it as we talk (I then did give them the valet key - yes just some old school paranoia on my part).
First time I did this...dealer came in under and I told them I had a better quote, and they moved up to match. Which was more than a match since the sales tax thing was then factored in.
Last time i did this..dealer blew away both quotes by $1,500 and I lost my poker face and agreed without trying for more.
I don't think you have to keep the separate, but you can have two simultaneous transactions in the works. Of course you can ALWAYS get more going ebay/craigslist..but honestly I just don't have the patience or nerves to have people come to my home/office and then take a payment.
Sometimes deals are lost because the appraiser is scared to death the car will "no sale" at the auction like the last three did. As a result, the offere is so low the customer walks.
Another store makes a decision to pay more and a deal is struck.
Three months later the Chrysler finally gets bought by a wholesaler and hundreds of dollars are lost in the process.
Being a Used Car Manager is NOT an easy job!