Buying Tips - How Do I Get the Best Deal?

graphicguy · December 2006

Old farmer...depends on the model and the dealership involved. Hondas, for example, would take a very long time to get a special order. They just don't like to do it. Same with Toyota.

The domestic brands, on the other hand, do it all the time.

Moving a unit from the dealer's stock nets them an immediate sale. Special orders....well...you really aren't committed to a car until it's delivered to the dealership, and you drive it off the lot. That means a unit moved weeks, sometimes months later.

Is an ordered unit more profitable than an in-stock unit? Theoretically....yes. They get all the holdback money. That's offset by the fact that the sale will be made sometime in the future vs a deal "now" on something sitting on the lot.

gogiboy · December 2006

graphicguy--

That brings up an important question: does the salesman get some commission or unit credit when a deposit is placed on an ordered vehicle or does he/she have to wait until delivery/sale? I can see how a number of factors could unravel a deal including buyer's remorse (dealer keeps deposit, but may be stuck with no-sale neon green yuchmobile), salesman is fired or quits before vehicle is delivered (commission is split or becomes straight dealer profit), dealership is sold (don't know who gets the commission).

My wife and I ordered ("requisitioned" is Toyota's term) a RAV4 back in 04 with a couple of peculiar options for our area including anti-lock brakes. After waiting about 7 months it became clear that the intermediary, Gulf States Toyota, had no ability or intention of providing the dealership with said vehicle and our deposit was refunded. Later we found a lightly used one with all the options we had ordered, and more, for $7K less at a Lexus dealership. We felt bad for the salesman who worked really hard to try to make it happen only to be undercut by GST. We tried, but couldn't find anything similar within a 250 mile radius. Actually, we did find one, but when that dealership found out that my dealership wanted it they suddenly said it had been sold--perhaps so.

I guess my point is that in our case the salesman would have preferred to not "requisition", with good reason it turns out.

Gogiboy

graphicguy · December 2006

gogi....I'm not familiar with every car sales commission plan. Of the ones I am familiar with, no commission is earned until the customer drives the car off the dealership's lot.

Toyota is a bit different in the way they distribute cars to their dealerships. There are some parts of the country where Toyota sends their vehicles to a distributor....who then sells the cars to the dealerships. The distributor is the actual entity that orders the cars (and their option packages) from Toyota.

Most other dealerships order their cars directly from the manufacturer.

mikefm58 · December 2006

On my reciept, there was a paragraph entitled "Arbitration" that they wanted me to sign and date

Here in Central Florida the binding arbitration form is standard and you won't leave the dealership with the new car without signing it. You're right, they can't force you to sign anything, but they can refuse to sell it to you without signing it. I know people that have tried and left empty handed.

thenebean · December 2006

no commission is paid to the salesperson until the unit is driven off the lot. if a car is ordered, and the original salesperson leaves before delivery, the person who delivers the car usually gets the commission...

not sure what happens if a dealership is sold in the meantime though...

-thene

snakeweasel · December 2006

Here in Central Florida the binding arbitration form is standard and you won't leave the dealership with the new car without signing it.

I wonder how well that will hold up in court seeing that it is a forced signature.

snakeweasel · December 2006

if a car is ordered, and the original salesperson leaves before delivery, the person who delivers the car usually gets the commission...

I know some dealerships would split the commission between the one who sold and the one who delivers if the salesman who left hasn't received their last commission check.

mikefm58 · December 2006

I wonder how well that will hold up in court seeing that it is a forced signature.

I remember discussing it here with someone called something like driftracer (I think), who was involved in the legal end of the business. He felt it was good enough to get rid of the frivolous lawsuits but it wouldn't hold up in court.

british_rover · December 2006

Last september when our most senior salesguide moved to AZ in inherited most of his customers since I was the second most senior salesguide.

It also meant I picked up four full list deals that were cars on order. That was a nice little bonus for the next two months.

guest · December 2006

That was a nice little bonus for the next two months.

Certainly, at the very least, you split it with the guy that did most of the work.

If not, why not?

snakeweasel · December 2006

Certainly, at the very least, you split it with the guy that did most of the work.

If not, why not?

Would the guy split the taxes on it?

Also if I may ask, who are you? You have no name, you are the unknown poster.

jmonroe · December 2006

Also if I may ask, who are you? You have no name, you are the unknown poster.

Yeah, how does that happen? I thought there were controls that would prevent this.

I think Security has to get involved here.

jmonroe

tidester · December 2006

It's an elusive software glitch that occurs sporadically with certain ISPs. Our IT team is working on it.

tidester, host

oldfarmer50 · December 2006

LOL A true story indeed. I know you made that one up because no farmer I ever knew could buy a Caddy and still have a farm to drive around in. He could have one only if he sold the other. Ha ha. keep up the good work.

imidazol97 · December 2006

I had friends who were farmers at the edge of a small town. He went to the Cadillac dealer on Saturday and paid for the Cadillac he'd decided on with cash. It was the talk of the town. This was the sixties something Caddy he had.

Later he was treated miserably when he stopped in their delivery truck at a fairly new Mercedes dealer in a small medium sized town. He was wearing work clothes. He had decided to buy a Mercedes in early 70s because of the overbuilt image of durability.

He bought a Cadillac at a Dayton dealer a few weeks later, also shopping on his delivery route for the farm meats to restaurants.

I don't recall seeing him drive the Cadillac into a field to work but maybe to drop off something he had in the trunk when it was convenient than switching it to a pickup--he had two or three of those.

jlawrence01 · December 2006

I had friends who were farmers at the edge of a small town. He went to the Cadillac dealer on Saturday and paid for the Cadillac

I know a number of Ohio farmers with Cadillacs. It is not really all that much of a status symbol and an older one can easily be had for a song.

imidazol97 · December 2006

Is that connected tothe previous post?

graphicguy · December 2006

In some of the rural areas of SW OH, I used to go to these "farmer's markets" (this is back in the '80s). These were places that several Farmers would congregate to sell fruits, vegetables, etc that they had grown. One particular guy I used to buy eggs from sold them from the trunk of his Caddy. He had a new one every couple of years.

The eggs were "plopped out" by the chickens one day. Being sold from the farmer's Caddy the next day. They were turned into an omlete on my kitchen room table the day after that.

Best and freshest produce, eggs, etc I ever had in my life.

guss · December 2006

He must have used the Caddy because of it's smooth ride compared to his pick-up. Alot less breakage with the Caddy.

jmonroe · December 2006

Alot less breakage with the Caddy.

So much for that stupid "dumb-farmers" stereotype comment that we've all heard, huh.

jmonroe

gogiboy · December 2006

"He must have used the Caddy because of it's smooth ride compared to his pick-up."

That reminds me of the first Saturday Night Live commercial I saw back in 1978 (I think). I was surfing through the very limited channels at the time and stumbled on their commercial for the car whose ride was so smooth a Rabbi could complete a circumcision in the back seat. I remember my jaw just dropped until I realized it was part of a comedy show.

I know that it spoofed a car commercial where a diamond cutter successfully cut a large stone, but can't remember who the manufacturer was or what kind of car--other than it was a big sedan. Anybody remember what car was being lampooned?

Much later, SNL had fun with another manufacturer's tight body panel tolerances. That manufacturer was always running ball bearings along the gaps between panels demonstrating their exemplary fabrication and assembly. The SNL car looked like the worst heap in the world and the ball bearing ran erratically along a rusted gap and down a hole in the hood. The premise was no criminal in their right mind would bother with such an obvious hulk. Of course, the interior was the height of luxury and new technology. I think it was called the "Chameleon". To stay on topic, I think for many, the Chameleon might be a very good deal for the consumer since the outside has already sustained maximum depreciation before leaving the lot.

Also, my best wishes to GG and condolences to isell.

Gogiboy

michaellno · December 2006

The car being lampooned was Lincoln .. in the late 70's and early 80's, they offered "designer" versions of the Town Car - Cartier, etc.

audia8q · December 2006

I know that it spoofed a car commercial where a diamond cutter successfully cut a large stone, but can't remember who the manufacturer was or what kind of car--

Wasnt that when Lincoln was trying to convince us that the Lincoln Versailles, which was a Ford Granada with a continental tire kit on the back, was easily mistaken for a Cadillac Seville?

yogiowner · December 2006

wow! that's deep...to purchase a car at a dealership in central florida, you have to sign away your legal right to litigate, if they screw you....

wow....that is deep.

I know there's another side to it...but man, that's deep.. :surprise:

yogiowner · December 2006

I WANT TO WISH YOU A VERY HAPPY HOLIDAYS!!!

BEST REGARDS,

THE YOGI FAN!

dino001 · January 2007

What a four square sheet looks like? I don't recall seeing it. Also - what is so wrong about them anyway? To see a deal, you need to know the price, the taxes/fees, trade value and interest, provided you finance. Wouldn't those four squares fit the general ideal of these components? Perhaps I'm too go with math to get intimidated by numbers, or else - just why are they so dreaded?

shasta67 · January 2007

They are basically just an offer sheet. Edmunds has a good description of them. You, like me, may be good at math and understand money but many don't. I am sure that is why they are using them. My problem with them is you are negotiating several things at once and they are basically used to confuse the customer. Also by signing them you feel like you have already entered an agreement to make a deal. To me they are just another way to put pressure and take control. I negotiate one thing at a time. First price, then trade-in(although I have never traded in a car myself)and lastly financing(even that will only be a chance for them to beat what I have already lined up).

newbee7 · January 2007

An excerpt from
http://www.edmunds.com/advice/strategies/articles/99254/article.html

"Four-square: As negotiations begin, the salesman pulls out a worksheet divided into four squares which represent the four elements of a car deal: selling price, trade-in value, monthly payment and down payment. "I started working the four-square and looked up at the prospect. It was great  they had no idea what the hell I was talking about." "

I saw the sheets at different dealers but they never got to use the sheet with me because I didn't have trade in and wouldn't talk monthly payment nor down payment until we reach an agreement on the OTD price of the car.

A problem with the sheet is that it does not include other fees (they may jack up the fees to make up for whatever concession they made). I'd prefer to look at the details of everything than just the 4 numbers on the sheet.

One observation though, the sheets seem to be very similar at different car dealers. This made me wonder if car dealers buy the sheets from the same seller (e.g., Staples).

boomchek · January 2007

The sheets seem to be very similar at different car dealers. This made me wonder if car dealers buy the sheets from the same seller (e.g., Staples).

It's usually a sales training company that comes out with a system and if it works, or if it's the flavour of the day, many dealers jump on the bandwagon and use that system.

jb_turner · January 2007

I dont see it being a "forced signature" at all. It is the custoemrs choice to sign the agreement or not and try to purchase elsewhere.

mikefm58 · January 2007

The last time it was used on me, there were 4 squares on the paper, each with a monthly payment and he asked me to pick one. As I got in to the details, the lowest payment included just the vehicle but with obscene terms to get a low monthly payment. The highest figure was the vehicle plus all the add-ons: ext. warranty, gap ins, mop & glo, etc etc along with obscene terms. The others were somewhere in the middle.

It really is insulting.

snakeweasel · January 2007

If its a "you sign it or you can't buy a car anywhere" it is a forced signature. Remember that its the case with all the dealerships in the area, so you either sign it or you walk. It won't stand up in any court in this land.

snakeweasel · January 2007

because it would most likely cost us more.

Plus advertising isn't allowed on these forums, a host has been notified.

abraindrainer · January 2007

This dude is no ex-salesman... He is still pushing pretty hard!

frenchv · January 2007

I'm in a very tight financial situation. I'm want to trade in my 04 BMW 325ci for a cheaper car. However, here are my stats,

Balance on car: $23k
years left: 3
Interest rate: 5.25%
current monthly pyts.: $565
trade in value (estimate): 20k or so
current Equifax score: 560

I want to get into a used Honda coupe, what are my options. I must somehow get rid of my bmw and get into a affordable car. Any suggestions welcomed, thanks!

madmanmoo · January 2007

Frenchy,

How much money down can you put and what kind of payment are you looking for?

-Moo

frenchv · January 2007

Maybe $1000 if I save, but due to unforseen events I am in a very tight budget. Otherwise less than $500.

I'm looking for $300 to $400 payments. Anything $100 less than my $565 will help greatly. Not including reducing the maintenance for a Beemer.

The funny thing is that I called my insurance and the quoted me a slightly higher premium for a Honda Coupe. The Beemer has more safety features.

british_rover · January 2007

You are probably better off keeping the BMW. You have negative equity that is going to run up your total amount financed, the insurance will cost more as you said, BMWs have maintance included up till 50,000 miles.

How many miles do you have now?

With your credit score you will probably not be able to match your old interest rate.

Keep trying to slide some money away for repairs/down payment on a new car for a year or so and you should be right side up on the BMW, assuming normal mileage and use etc., and have some money to put down on a new car.

frenchv · January 2007

I have 45k on it argh.. getting close!

I know for sure I won't get a great interest rate on a lower used car. But I thought that even though if the stealership get me on the trade in and higher interest it may lower my pyt. somehow.

Maybe I'm just doing wishefull thinking..

british_rover · January 2007

Start putting money away for repairs/down payment on a newer car.

That is the best thing you can do. I wouldn't buy an extended warranty in your situation but waiting a year or 18 months to trade out should help.

You will hopefuly be even or maybe even a bit positive on the trade side plus have some money to put down. The time also gives you a chance to raise your credit score.

kyfdx · January 2007

Umm... is this a balloon note? Because if you have 36 payment of $565/mo., and your loan rate is 5.25%, there is no way you can owe $23K.. You would owe a little less than $19K..

If that is the case, then you could just trade out of the car and break even... Then go lease an Accord sedan for about $300/mo..

So... please clarify?

Thanks,
kyfdx

snakeweasel · January 2007

You should owe $18,800 on your car (5.25% $565/month 36 months to go).

Since you have a low credit score you will be burned on any interest rates. Best thing to do would be to keep this car for the next year or two and get that credit score up. Get a second job to make ends meet if you have to.

rjmerryman · January 2007

I am interested on a 2007 Hyundai Entourage SE. MSRP is $27,870, invoice is $26,444. Am trading a loaded 2000 Nissan QUest SE, with 96K miles. They have offered $3000 for my trade, and have discounted the Entourage to $25,857, which is already below invoice. ON top, I'm getting 1.9% finiancing. THis is their first offer, so i know they must be making money. It just seems too good for a first offer to be $600 below invoice. I do know that my trade is worth more, though. Edmunds, KBB and NADA list it anywhere from $3750 (Fair condition) to $6875 (Avg cond). Any suggestions would be greatly appreciated!

rjmerryman · January 2007

I am working a deal for a 2007 Nissan Quest 3.5S. There is a customer cash rebate of $2000, or 0.9% APR for 36 months. My wife and I are leaning towards the 0.9 financing, but the dealer is trying to convince us to take the rebate. If we take the .9%, we will be financing $10,000 for 3 years, paying $10,139.36 after 36 months. If we take the rebate, we will probably still finance $10,000, but put $2000 less down. At the best financing we can get (estimated 6%), we would be paying 10,951 over the same time period.

Is my thinking correct or am I being foolish? What incentive is there for the dealer to push us towards the rebate instead of the .9%? Or is he just truly looking out for our interests?

shasta67 · January 2007

Hmm I may be missing something here but this is a nobrainer. Save $2000 now or save under $820 spread out over 3 years? My only question to you is why don't you put the $2000 towards the car now and only owe $8000? Your dealer may not be looking out for your best interest but I am sure he will think you are foolish if you don't take the rebate.

kyfdx · January 2007

If you were borrowing $30K, it might make sense to take the financing...

But, if only borrowing $10K, then take the $2000...

stickguy · January 2007

If your math is right, you are much better off taking the rebate. Actually, you usually are, unless you are borrowing a lot of money for a long term. 10K for 3 years or so is going to be a no brainer, take the rebate. You can also just figure out what happens if you add the rebate to the DP.

They want you to take the rebate so they can have you finance at market rates through the dealer, since they may be getting some piece of the action from the lender. The .9% is manufacturer backed, so their isn't going to be a cut for the dealer.

As to the Quest, a famous man once said, "the only difference is the difference" They aren't neccesarily selling the new van below cost (there may also be some dealer cash you don't know about). If they are lowballing the trade, they can make up the perceived savings there.

Many people have no clue what real world value on their trade is. THey do, however, get sucked in by a big discount on the new one.

If you honestly thing the Quest is worth more than 3K, then tell them the new one is fine at that price, but jack the trade to 5K (or whatever your # is) and you got a deal.

I think you will do bette on a private sale with that van, but if you don't want to deal with that, then 3K might not be too far off.

cccompson · January 2007

The dealer always makes money, don't kid yourself. Do some investigation to learn what, if any, rebates/dealer cash, etc., is on this unit. At worst, your price should be invoice less whatever other money is out there.

List your van on craigslist or the local community paper for $5000 or so.

1racefan · January 2007

Check on this site to see if there are any available incentives or rebates, and you can deduct those from invoice, and go from there on your counter offer.

If I were you, after checking that out, figure out what price you are willing to pay, and buy it if the dealer can come close to it.

Last spring, I bought a car for my wife, and knew what invoice was, and did not see any rebates or incentives when I was doing my research - I could only find a special finance rate. When we went in to negotiate, the dealer's first offer was $500 above invoice. I then countered with $1400 below invoice (just for the heck of it). He then countered with $400 above invoice, so I in turn raised my offer $100 to $1300 below invoice (It was still a low ball offer on my part). I was prepared to buy the car at invoice (which would have been my final offer), but was AMAZED when the salesman accepted my $1300 below invoice offer - AND we got the special finance rate. I learned from this that it never hurts to ask, because the worst they can say is no.

exb0 · January 2007

I am not sure it is as simple as take the rebate. There is a third option. Finance the whole amount at 0.9%, and keep your down payment in an interest bearing account at 4.5 to 5%. Then each month withdraw the difference between payments and apply that towards the monthly payment. It is possible that you might earn more in interest than the 2K rebate. Go to Bankrate.com calculators and crunch some numbers. Dont forget that you have to pay taxes on earned interest.

Buying Tips - How Do I Get the Best Deal?

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