Got a Quick Question for a Car Dealer?

obyone · June 2013

When I bought a Regal back in '97 it was from a family owned store. I purchased the car from the youngest salesman who was 58 and found out the oldest was 76. Talk about surprised.

avatexrs1 · June 2013

At least one dealer gets the Internet and e-quotes.

I just closed on a 2013 Acura ILX Premium, polished metallic (grey) with black leather interior. The dealer provided a great price initially in response to the "e-price" link on their website, responded immediately by email in response to a request for an OTD quote, and negotiated the entire transaction in about three phone calls. I never actually went into the dealer, having test driven the model when I had as a service loaner and someone else going to the dealer to pick up the vehicle. Used FedEx to sign the papers and deliver the purchase price via cashier's check.

The deal:
$24,988 Sales price
1,620 Sales tax
149 Dealer doc fee
143 Other taxes/title
$26,900 Total OTD

Comparisons (without taxes and fees):
$28,790 Edmunds TMV
$28,137 TrueCar
$26,600 CarsDirect

I paid less than what I was quoted for a base model a month ago. With the 2014s now on the lot, there are great deals on the 2013s.

This is the future for a lot of buyers: using technology to avoid the hassles of the four square, the 30+ minutes of sitting there waiting for the sales guy to "talk" to the sales manager, etc. that many dealers like to use when you're there in person.

Mr_Shiftright · June 2013

Gentlemen: A member posted this "interesting" question in our ANSWERS department and I was wondering if you'd be kind enough to think about it and give an opinion, so that I could convey this back to them---they seem to be in a bit of a jam. Here's the question as posted:

"Bought a car approximately 30 days ago. The dealer called and stated that the original contract had gotten destroyed in transit to the bank by UPS. They are now wanting us to resign the contract which I do not feel comfortable with. Since there's apparently no contract can this sale be null and void? At this point with all the hassle I would just like to give the car back and be given my down payment back, without it going on my credit history as a REPO. I've since investigated the dealer which has had many issues. They have a score of a D+ with the BBB. Am I obligated to resign this contract?"

isellhondas · June 2013

First of all, I have to wonder why it took so long for them to find this out?

To me, it looks like the buyer is trying to use this mishap as a reason to back out of the contract they agreed to.

I'm not certain of all of the legal aspects but it isn't that unusual for a contract to need to be re-signed.

The buyer had use of a new car for a month and now they see an opportunity to back out?? They really should see an attorney.

qbrozen · June 2013

sooo... buyer wants to return the car because there is no contract. But the buyer wants the down payment that is shown on this same missing contract returned. Just a tad of a double standard here. If I was the dealer, and the down payment was significant enough, I'd gladly let the buyer back out and keep the down payment. Null and void, right? That works both ways!

obyone · June 2013

What is the dealer to do with a used vehicle that was once new. Resigning a contract with the same terms isn't a reason to unwind a deal. Looks like this buyer is looking hard at a way out of the deal. If the dealer has a D+ rating the buyer may have figured that his deal wasn't such a good one to begin with.

Mr_Shiftright · June 2013

thanks for those replies. This is an odd one, isn't it? Makes me wonder what the WHOLE story is, on both ends.

I think I'm going to tell them to talk to an attorney if unwinding the deal is what they really want.

The contract can't be "lost" to the computers as well, or else they couldn't ask for it to be re-signed.

Are contracts actually hand-delivered in paper anymore to banks?

isellhondas · June 2013

Yes, that's the best advice.

Something doesn't sound right here and to me, it look like the buyer is grasping at straws in an attempt to weasel out of the deal.

Sandman6472 · June 2013

Think we need to hear both sides before we crucify the buyer, which I can see has already started. A shame that the 1st thing that salesmen say is that the buyer is fishy but the dealer is above reproach. Old stereotypes live on no matter how each side says things have changed. A bit disappointed here!

The Disappointed Sandman :sick: :shades:

isellhondas · June 2013

Disappointed again?

I think I said "something" sounds not right here.

Only a sloppy store would not react to not being funded on a deal until after 30 days.

I don't think I "crucified" anyone or say that dealer was "above reproach"

After a lifetime in retail management I will admit to becoming cynical at times after having seen every trick in the book played.

I learned that to some, the value of a handshake means nothing. Not the way I was brought up.

Had you spent almost 14 years in the car business I don't think you would be feeling so disappointed.

houdini1 · June 2013

I agree with your thoughts 100% isell.

jipster · June 2013

Jipster would have been fine to deal with.

I wouldn't have minded having him as a customer.

Thanks. I think you would have put me on your Xmas card list.

I would have bought my 2012 Civic from Isell, if he lived in the Louisville area.

I've always been friendly and respectful to my salesman. The majority of which have been fairly nice guys. If a deal can't be made, no hard feelings.

qbrozen · June 2013

A shame that the 1st thing that salesmen say is that the buyer is fishy

My comments were against the buyer, as well, and I'm not a salesman. The buyer did not express any reason for wanting to back out other than simply wanting to just because they were asked to come sign the same damned contract they already agreed to and signed. If the buyer left important details out of the story, it is their own damned fault. My conclusion was drawn from the information provided by the buyer, nothing more, nothing less. If it walks like a duck....

verdugo · June 2013

We're def. not getting the entire story.

Everytime I've bought a car, I got a copy of the contract. If the dealership wants him to sign a new contract, just make sure all the numbers match his copy of the original contract.

isellhondas · June 2013

I just had to resign a contract on the 2013 CRV we just bought.

My F&I guy transposed a number and Honda kicked it back over two cents!

Not that uncommon but this was caught in four days, not a MONTH!

tommister2 · June 2013

My most recent two purchases (May 2012 and May 2013) have had the contracts revised but I didn't have to re-sign. One one the payment date changed - I think the first payment was actually made due a week or so later. The other had different late payment information. Instead of a payment being late after 7 days the bank changed it to 10. Neither change affected the numbers so I guess that's why they just let me know. For each of them I received a letter from the finance company in 7 - 10 days.

In 1998 I leased a GMC Yukon. The contract had 15k miles per year but GMAC said it should have been 12k. They did want me to sign a new contract for that but I refused. Somehow the dealer and GMAC worked it out. I never got the details and I sold it before the lease was up...

stickguy · June 2013

still not as bad as my Acura, where it took 2 weeks to figure out they wrote the contract on a totally different car than the one they gave me.

sadder, I was the one that finally figured it out. They somehow still thought I just got the wrong key fob, which made no logical sense at all.

would have been funny if they tried to sell "my" car before i went to swap it out!

kyfdx · June 2013

I had to re-sign a lease contract on an Accord in the '90s...

The correct money factor was supposed to be .00236 and they used .00239... AHFC kicked it back...

Saved me about $1/month!!

Most stories I hear about new buyer's not wanting to re-sign contracts are purely buyer's remorse.. and, thinking that this might be a way out...
Others just don't like car dealer's, and like to think they have the upper hand (for once)...

acemanhattan · September 2013

I understand that a dealer is in business to make money and, though it would be nice, I'm not going to drive a car off their lot (likely) without them making a fair bit of money off of me. I'm okay with this. What I don't want to be is the fool who they make A LOT of money off of. That's where I hope you can help me.

I'm looking at a 4 owner 2002 Corolla LE with 100k miles with a sticker price of $6,995. No side front airbags and no ABS, really clean but definitely not new (few scrapes, wheels are scraped). There are a few other 02's w similar specs that are priced at other dealers for right about the same amount, so, in that sense, it seems to be a fair price. However, after looking at trade in value for that car, I see that the MOST the dealer would have paid (and I'm sure they didn't pay for a "clean" trade-in) would have been $3,800. In addition, KBB, Edmunds, NADA, and Black Book all say that this vehicle should retail, in outstanding condition, for about $6,100.

So, of course, my question is what would a fair price be for this vehicle?

Mr_Shiftright · September 2013

Sounds like $5K would be more than generous. You should use the designation of "average" or perhaps "good", to price the car---certainly not excellent or outstanding.

acemanhattan · September 2013

Thanks. Does it sound then, since they are asking $6,995, like this is just a situation where the dealer has no interest in selling it at a reasonable price and that I shouldn't even make an offer? If I want to get the vehicle at $5,000, then I'm looking at offering them something like $4,500, which, at the price they've advertised it, doesn't sound like a very serious offer. Or does it?

ohenryx · September 2013

What exactly do you have to lose? A few minutes of your time, I would say.

But you do need to keep that in mind ("few minutes", I mean). One of their negotiating tactics is to tie you up for hours and wear you down. Be prepared, be serious, make your offer and move on. Either on the phone or in person.

Another good tactic is using the bottom line, this has always been one of my favorites. "I have $5,500 available, I will write you a check right now and take the car with me." If the salesman comes back with, "I have to check with my manager", then you look at your watch and say, "I have to be somewhere. You can call me with your answer." Then leave. Do not hang around.

Mr_Shiftright · September 2013

I wouldn't let them engage you. They can be clever. Make the offer that you want to pay, your top dollar. If they say "no", or "let's work something out" or "let me check" or....just thank them politely, leave your card and walk.

A dealer may very well sell you a car on a $1500 flip if he has no money in the car.

Go to cragislist and see what private parties are asking, then knock 5-10% off that. Be sure to only pick "comparables", so no "pristine" Corollas or cars with considerably more or less miles than yours, or higher or lower trim levels.

I'm seein' $5500 asking for nice clean low mileage 2002 LEs here in California.

houdini1 · September 2013

There is absolutely nothing special about that car or the year...except for the asking price, which is way too high. Thousands of those things must be for sale across the country.

That dealer has made the decision to wait for someone to walk in and pay the asking price. Sadly, someone probably will. I would simply move on down the road and find a better car at a better price. That dealer doesn't sound like someone I would want to do business with.

acemanhattan · September 2013

So, are you suggesting using a price 10% below what private party sellers are asking to use in negotiation with a dealer, or are you just suggesting that I can get an idea of what I could reasonably expect to pay from looking at 10 to 15 percent below private party prices?

Mr_Shiftright · September 2013

I'd say the latter. As was mentioned, these are very common cars so you don't have to jump at anything.

To my mind, there are only 3 reasons to shop at a dealership:

1. Convenient -- you go in, you sit down, and you drive away, all signed up, paperwork on its way to you.

2. Financing -- dealers might offer alternative financing to people who are really hard up for a loan and need help getting one (often at high interest)

3. Higher Degree of Liability--a dealer can't do many of the treacherous things a private party can do to you and get away with it.

One reason private party asking prices are lower is that the private party usually wants the car gone--a dealer can sit on a car for a year if he wants to.

acemanhattan · September 2013

Thanks.

Initially I had no desire to go through a dealership, but after looking non-stop on popular private seller sites I decided that, for reason 1., it might be worth my time to shop at dealers as well.

acemanhattan · September 2013

This is a duplicate post from another thread, so forgive me if that's frowned on:

Let's say it keeps getting repeated by knowledgeable folks like the forum members at Edmunds.com that this car is worth $5,000. In that case it would be reasonable to think that the guy who owns the dealership also knows in his/her heart of hearts that $5,000 is what this car is worth.

My question is, what is a more reasonable assumption about how dealers purchase their vehicles: (1) They know the car is worth $5,000, they buy it at $3,500 and mark it up to $7,000 hoping for a sweetheart of a buyer but with the possibility of selling it at $5,000 to a smart buyer. (2) They know the car is worth $5,000 but, since they aren't looking to sell cars to knowledgeable buyers (and since wholesalers know how the game works), they buy it at $4,500 and mark it up to $7,000 looking for a sweetheart buyer with no intention of letting it go to a knowledgeable buyer for $5,000.

stickguy · September 2013

there is a 4th reason. Especially depending on the particular car you want, the dealers are the ones that have the selection. Trying to find exactly what you want on the private seller market can be a real pig in a poke. And of course, then you deal with working out a way to see it, owners that have to pay off a loan, and all kinds of logistical nightmares.

IMO, the cheaper the price range, the more sense to go private.

stickguy · September 2013

not sure I quite followed your options, but I think #1.

basically, they know people usually expect to negotiate, so they pad the price to give room for the "my kids won't eat this month" discount. And of course, for the jackpot of a buyer that walks in, and just pays the tag price. Hey, you can always lower, but hard to raise the price!

I think you are overlooking another group of buyers. payment buyers. they are usually the 2nd type I listed, but just interested in the monthly, so the dealer uses the higher asking price combined with an extended term to get the monthly nut where the buyer wants it.

Mr_Shiftright · September 2013

In my opinion, the problem with this car being at a dealership is that they are asking dealer prices but the car is not up to snuff...it's not a creampuff, and there seems to be no apparent justification for asking top dollar and beyond for it other than (dare I say?) greed?

I rather doubt the dealer paid very much for this car, or if he did and he's buried in it, he's not a very good used car dealer then, is he? ("oh, darn, I just kept raising my hand at the auction because I was sooo excited, and then...")---

Any good dealer knows that the buyer sets the market, not him. The dealer cannot force the market beyond what it will bear. The only way this car might be sold at that asking price is to someone who has no money, doesn't care what the car costs, but just wants to hear about an affordable monthly payment.

Anyone else is going to bargain. No one can set an exact price on a used car, be cause all used cars are different.

I heard about some scrapes and some curb rash, and so I took a guess.

ken117 · September 2013

Many good points.

First, any pricing service such as True Car does not represent the best price. The best price will almost always result from research and face-to-face negotiation with a sales person. There is a cost for the convenience provided by these services.

Buying a new car does not have to be difficult. The key is knowledge. Recognize there are three parts to most deals. Those are the price, the trade, and financing.

Recognize dealers are smart and most are honest. They want to make a deal but they also want to make a profit. It is best to be upfront. Nothing is gained by trying to be cute. For example, nothing is gained by trying to hide the trade.

Develop a realistic price at which a dealer may sell. Use invoice less incentives and holdback to compute a baseline price. Add a bit of profit, perhaps start with 3 to 4 percent, and negotiate up from that number. Do not move up too quickly.

Use Edmunds, KBB, and NADA to price the value of any trade. Be realistic as to the condition of the vehicle.

Obtain your credit score and research available financing.

Use one of the many calculators available to arrive at a monthly payment goal.

Research dealerships online. Edmunds' provides a lot of information to identify dealers who represent the good guys along with those dealers which are more problamatic.

Recognize there are two parties to a deal. Both must accept the terms of the deal. If an agreement can be reached, fine. If not, maybe time to reassess the parameters of the deal. There is always another dealer. If all dealers are not close to your numbers it may be your numbers need to be adjusted.

Say no to every product offered by the F&I sales person. They are all overpriced and most have limited value. However, allow the F&I person an opportunity to finance the vehicle. There are many benefits to this.

Recognize the sales person is not an enemy. He or she is simply part of the process. The F&I person, on the other hand, is someone you need to approach with caution. A good deal can be destroyed very quickly in the F&I room.

With research and an honest understanding of your position along with the dealer's goals buying a new vehicle today truly does not have to be stressful.

houdini1 · September 2013

Very good post. I agree with everything you said.

pgb205 · September 2013

I'm considering this lease deal
http://www.leasingdirectny.com/details.php?id=89

Seems be even better than what Honda direct is offiering (http://automobiles.honda.com/current-offers-detail.aspx?modelname=Civic Sedan- &offerid=73186&modelid=FB2F5DEW&sf=2&ft=1)

and I'm not sure how that's even possible. I thought it would always be cheaper to buy from
car manufacturer as middlemen just jack up the price.

My second q is if it's worth to wait till 2014 version and maybe then i can get 2013 civic
for less money?

kyfdx · September 2013

The lease broker deal doesn't include the $595 acq.fee.. you have to pay that upfront, where it's included in the Honda advertised deal (see the fine print).

So... the Honda deal is about $215/mo. + tax.. (with no downpayment)

The broker deal is about $215/mo. including tax (adding the acq.fee)

A couple of things to ponder...

1) The lease broker deal is the same Honda Finance lease as the advertised deal... the damage waiver is the tipoff.. that is a Honda Finance thing.. they are just using a dealer that is cutting them a better price than the price assumed in the advertised deal... (good enough to give you a lower price and still make a few hundred for themselves)

2) You can try to negotiate the same deal as the lease broker, yourself.. at the dealer. You may be successful, as you won't have to factor in the broker's profit. (and, you eliminate a 3rd party from your deal)

regards,
kyfdx

pgb205 · September 2013

kyfdx,

thanks so much for this.

So as things stand now I'm better going with leasedirectny offer rather than going directly to honda dealer?

pgb205 · September 2013

and also should I wait for 2014 civic. I really dont care which year my car is but I figured that once 2014 comes out I might get a better deal on 2013?

Should I expect 2013 prices to come down?

Mr_Shiftright · September 2013

The longer you wait to buy a 2013, the fewer cars and fewer options you'll have to choose from.

Michaell · September 2013

Precisely. The supply and demand curves initially favor the consumer, but as the inventory drops and more people look for 'deals' on the 2013 models, dealers know they can hold the line on pricing.

Also, folks often don't get the color combination they want.

jplatt2 · September 2013

When you lease the car at the dealer, he is selling the car to Honda Finance which is leasing it to you. Dealer's love when you go for the nationally advertised deal because the car is sold at a nice profit. You can negotiate a better deal with the dealer 99.9% of the time.

pgb205 · September 2013

okay. so pretty much exactly this happened today. I went to my local dealer.
He lowered 210/month to 180/month. First month:650.95(bank fee)+325(dmv)+59.46(tax bank fee)=1055.41
The other 35 months come out to 35x180=7350

The thing is he didn't let me take the paperwork home, despite mine asking several times, I had to write it down on his business card.

My friend told me that's sure sign of trouble.

kyfdx · September 2013

It's not unusual that they don't want you to take the finished paperwork home, until you commit to the deal... That makes it easy for you to shop the deal all over town.

Just write those numbers down when you go to pick up the car.... and, if it's different, head for the door..

I think you did the right thing... you took that broker deal into the dealer and they matched it... no point in putting a 3rd party into the transaction, if you can get the deal yourself..

Kirstie_H · September 2013

What kyfdx said, plus if you took the contract away, you could do all sorts of unscrupulous things with it, like post it on the internet.

Now, if you asked for some extra time in the dealership to review the terms of the contract and they refused and just pushed for you to sign it before reading it, THAT'S a bad sign.

pgb205 · September 2013

I sent the above deal(honda dealer) to the middleman broker. He came back with the following:

"I can do the same If not better but not thru Honda financial bank".

stickguy · September 2013

one thing to keep in mind if the deal is basically the same $. At the end, you will be taking it back to a dealer, and if it is through them (HFC) you might have options for an early buyout, no fee trade in, etc.

of course, who knows if they are better or worse in terms of fees and stuff at the end.

kyfdx · September 2013

Independent banks generally suck at lease end... You get dinged for everything...

Stick with Honda Finance lease..

audia8q · September 2013

Up here in the Northeast the Credit Unions are jumping into leasing thru dealerships. In some cases they are super strong. One example is the 2014 Mazda3, our local credit union beats the factory program by $60 per month with the same terms.

ohenryx · October 2013

Why do all new car dealers (or perhaps I should say all new car salespeople) insist that you must give them "perfect scores" on the evaluation or else it doesn't count? I have personally encountered this from Chevy and Ford, and asking around among my friends and co-workers I hear it is common for other brands.

I was taught, in school, many decades ago, to toss out the "outliers". If any survey result comes back with all answers pegged at the top, throw that one out. Same if all answers are pegged at the bottom.

So what exactly is going on? Have they all been told by their bosses to repeat this story in hopes of maximizing their survey results? Or is it really true, any result less than perfect doesn't count? I find the latter really hard to believe, right up there with "clap to save TinkerBelle". And don't tell my granddaughter that I said that last part, or I'll have to kill you!

Michaell · October 2013

Oh dear.

This is one of the most contentious topics here.

Yes, many of the manufacturers have instituted a "pass / fail" system for the surveys. Anything that is not a top score is treated as a zero, and will affect dealership and salesperson compensation.

The dealers and salesfolks want us to collude with them to 'game' the system by asking that we provide nothing but top marks. Some dealers have been known to bribe the customers.

Yes, this flies in the face of how statistics are meant to work.

I agree with you that this is wrong, that the purpose of the survey is to provide honest feedback to the dealer about what went right and what went wrong with the sales transaction so that the dealer can make improvements.

Unlikely that there will ever be any changes.

isellhondas · October 2013

The way surveys are graded is horrible and the manufacturers don't care.

On a scale of 1-5 a 4 is a failing grade.

Teachers and engineers were the worst.

Yes, there is always room for improvement. Nobody is perfect.

A customer finds a flyspeck in the paint and gives a 4 in that category and it kills the store and the salesperson.

Horrible system!!

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