Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Dealer's Tricks - bait & switch, etc.
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Like I said, if it's slow and I need the number more than the gross then it would be different of course.
It's just numbers, nothing personal. If the volume is there I have to try to increase the profit and if the profit is there I have to increase the volume.
And BTW, that high volume store also has one of the highest gross averages. NOBODY is leaving there with a $100-over deal.
What I meant (and what you could not have known I meant) is if I find, by doing my homework, that the best deal people are getting is $500 over invoice, I'd pick that number, and make that my offer.
As to the other board, where the buyers would not accept the advertised $1 under invoice because of the Doc fee, assuming that fee is *reasonable* (I know it is standard), then those people were turning their backs on a good deal. I am looking forward to mac's continuation of that saga. See you there.
and doc fees). Thanks.
Erik
I told him going in that the dealer could deal with some negative equity but holy crap - 9000.00 buyout - well - it appears he did 22% interest on a pre-load (i.e. pay off most of the finance charges before principal). So after I told him he'd get around maybe 3000.00 for the Kia, he'd have to come up with at least 5000.00 to have a chance to do any kind of a deal. Then he wanted to know if he'd get zero interest.
Wow, I know it sounds hard to beleive but I understand why some people hate the process.
What's even stranger is the guy's a very talented network administrator and is quite intelligent. Not when it comes to cars though.
So know he's going to get a home equity loan to pay-off the Kia, eat his loss and use most of what's left to get a decent vehicle.
One thing on those items, if he did get them - he can cancel any remaining portions of the coverage for the insurance and warranty and either get a refund or get the amount(s) applied to the loan. When I was a young pup, I purchased a GMC Truck and got all the add-ons - when a salesman friend of mine found out a year later, he showed me how to cancel the premiums. I got $2200 applied back to the loan - it didn't change the payment since I didn't refinance, but it took a bunch off the bottom line. Good luck!
He'll pay more total interest on that car with the home equity loan than he did with the car loan. And on top of that, he's going to take on another car loan on a new car! What does he do if he doesn't like that one?
First, the interest is deductible.
Second, flexible repayment. Each month I'm only obliged to make the interest payment. How much principal, if any, is up to me. Plus, as I pay down the loan, the minimum the next month goes down accordingly.
Third, any other big purchases (college tuition, e.g.) go on the same loan; it keeps things simple.
Fourth, I only worry about the rebates when I carshop.
Fifth, convenience. I can write out a check on the heloc for the total purchase price of a car, walk in the dealership & say, 'Here's my check for that car, do we have a deal?'
Now right now I'm planning to buy a new Z28. Of course GM is offering 0% which is better than my heloc rate of prime-.3%. So I am looking at maybe skipping the $1k rebate and taking the 0%. Obviously the rate is low, but if I pay the car off within 18 months, I'll be ahead taking the rebate and the tax deduction the heloc offers, as well as the payment flexibility.
You're right, financing a car on a heloc for 15 years'd be pretty dumb, but I imagine most people using them do like I do and pay them off much faster. For example, I've never taken more than 18 months to pay off a heloc car loan, and my last one was done in 11 months.
Careful, that kind of talk can get you branded as a heretic. LOL.
Clarification. I am NOT a sales person, never had anything to do with sales, never had a sales training in my life.
But, I do know that landru2 is right, under certain circumstance, that having a deposit ALONG with a firm offer to BUY the car will HELP the buyer in the deal making process. I recently bought a Toyota. The buying process involved the internet. The dealership called me on a Saturday morning to say they have the car I requested online via autoweb.com
On the phone, the fleet manager gave me all the specs of the car and the out-the-door price. I told him he had a deal. When can I come and see the car and pay for it ? He said come by in 2 hours. My wife and I walked into the dealership to find another couple taking the same vehicle out on a TD. This vehicle is the only ONE on the dealership lot, being a new entry into the market. The couple came back with the vehicle and promptly made an offer to buy the same vehicle. But since the dealership had called me first, they gave me the right of first refusal to buy the car. Of course I wanted the car being the only one I could find within 100 mile radius of where I live, and one that I wanted that badly. I had no trade-in, while the other couple had a Mercedes C280 to trade in. I also requested for some AM options on the car. Since the car won't be ready for another week to add the AM options, I left a $1,000 check as deposit on a $37K car. And that showed my intent to buy the car and not weasel out. Please note, the dealership did not ask me for a deposit, I chose to leave one. One week later when the car was ready for pick-up, I gave the F&I guy a check in the balance of the vehicle.
Now, did I do wrong to have put a deposit down even when I do not have the car ? I don't think so. Methinks a deposit will ultimately help not hurt your car purchase, except, of course, if you had no interest in buying that day. That happens a whole lot more than many people care to admit to. Yes, there is lots of buyer's remorse; it happens to many people o big-ticket items.
So next time you want to buy that new car, and you are ready to make the purchase, why not offer a deposit of $100 WITH the firm offer and see what that gets you ? If it doesn't help you, then demand for your check, and walk out the door. If the dealership were to play games with you, simply tell them you will call the cops if they do not produce your deposit within, say 5 minutes. That usually should get their attention quick.
Don't just bash landru2 just because you won't put a deposit down. If you won't, someone else will. That is a fact of life....
everyone agrees that after a deal is made it is proper to give a deposit. in your case you wanted the car and added after market options. it would be foolish for him to make the car just for you and then you decide to back out.
what we objected to was giving him a check so he would present an offer to his manager.
you are comparing apples to oranges
He really wanted this car,as it was a 6 speed model.that would have taken 12 weeks to special order.He told the salesman he would put a $2500 deposit down,with the provision-if they couldn't make a deal it would be refunded.
The salesman called the sales manager out to see what to do.The other potential buyer had already been accepted by the finance dept,but had signed nothing.The sales manager asked him if he would be willing to put a $500 deposit down under the same conditions as my friend.He refused.My friend ended up buying the car that evening..
Was the other customer serious abput buying the car or just wanting to have a ride for the evening?That no one will never know.What we do know is that,in this instance the money established credibility for my friend.
Just a question of timing. The majority of folks here, yourself included by your own description, seem to feel the proper time for a deposit is after the price and other relevant details have been agreed on, not before.
719b,
It's people like you that really devalue boards like this. I find it hilarious that you admonish oac3 to read this thread closer and then say this,
"what we objected to was giving him a check so he would present an offer to his manager."
I just spent 10 minutes scanning the last 100 posts here just to see if I had said any such thing. Alas, I can't find it. Of course, since this all ocurring over the ether of the internet I guess anything is possible. If you can show me the post were I said this I will gladly offer a public apology for my error. But if you cannot, then kindly refrain from fabricating other peoples opinions to support your views.
bianca2,
How can you say this,
"By your own story, you gave the deposit AFTER getting the price and AFTER seeing the car, which is I think what everyone of us who disagrees with landru on this issue would also do.",
after I specifically said this in thread #384,
"Yes, I agree asking for a deposit early in a typical negotiation shouldn't be done.",
and even referred to this statement again in a subsequent post?
Is it too much to ask that people actually read a post before going off half-cocked and making up statements about what they "think" they have read.
"If he comes to the desk with an offer and a deposit and there is some profit in the deal I would take the deal so the salesman can quickly move on to another customer."
To me that sounds like you want the customer to offer the deposit with THEIR offer of a firm price - in other words before a price has been agreed on.
I don't think oac3 is the only one to have read your posts. He's just the only one to sort-of agree with you.
so do we get an apology?
as for your comment about my contribution to this board: "It's people like you that really devalue boards like this", i think the reception of your sales tactics on this board says volumes about what we think of your contribution.
And a great dealership to stay away from!
"If he comes to the desk with an offer and a deposit and there is some profit in the deal I would take the deal so the salesman can quickly move on to another customer."
This is your evidence? From that statement you get this?:
"what we objected to was giving him a check so he would present an offer to his manager."
Where does it say that a check is needed before an offer will be presented to a manager? Apparently English is a second (or third) language for you. There is no other explanation.
bianca,
"To me that sounds like you want the customer to offer the deposit with THEIR offer of a firm price - in other words before a price has been agreed on."
No, what "I" would like, from a money-making point of view is if this didn't happen because then we get into the negotiating game that you don't like but that makes me more money.
If you have a firm offer then all that's left is for me to say yes or no. Not much negotiating to worry about is there? The buyers that do this tend to pay lower prices than those that don't.
I thought "you" might be interested in hearing about a way to help "you" get a lower price and a faster transaction. Apparently you are not.
Actually, you never said that. It started with Bretfraz in #274, when he said "There's no law that states that every buyer has to sit there like a moron listening to somebody's baloney. Tell the salesguy by the first nanosecond that you know what you want and you are buying today. Give him the out-the-door price you want to pay and ask him to take it to the boss for approval. Let him write it up if he has to. If he wants a check "to show you're serious", give him one."
He was speaking semi-sarcastically in answer to another post, and you picked it up and defended the idea. I'd say the context was fairly clear that we were talking about a customer giving a salesman and offer to take to his manager.
In #297 you said "Giving a deposit with your offer will do nothing but help your transaction proceed smoothly."
Again, it was clear form the context what was meant.
as for understanding what you are saying: what you meant and what you've been advocating for the past few weeks isn't quite the same.
remember one thing. diversity of opinion is what makes this forum so spirited.
i don't think there is a right or wrong opinion on this subject... just different opinions (god bless america for allowing us to do that).
what may work for you as a salesman may not work for some of us as consumers.
i'm aware that i have a tendency to use sarcasm when it isn't called for. i'll be more civil when i disagree with you from now on. ok?
by the way, english is my first language
Happy buys and sells to everyone...and a really nice way to close this comes from another quote from 719b (this guy does speak and write quite well, i must confess): "...i'll be more civil when i disagree with you from now on.." to which I say: AMEN !
BTW I see no problem with flashing a little cash if I'm making a serious offer on a car.After hearing "I'll be paying cash","my beacon score is way over 700","I'll go home and get my checkbook"etc,the simple act of writing a check should remove any doubts a salesman has of your credibility.Doing this also has eliminated any pre-sale credit checks,for me anyway,
If a salesman ASKS me for a check "to show that I'm serious" so he can take my offer to his manager, I'm likely to laugh at him and walk out. On the other hand, if I know what I want to offer and I'm ready to buy, writing a check and telling the salesman to go show the offer and the check to his manager, I think I've increased my chances significantly.
It works this way with houses, too. Imagine you are selling your house. It's been listed for 20 days at $150,000 (which you think is a realistic price) with some lookers, maybe a couple of low-ball offers, but no serious offers.
Scenario A: Your agent calls and says a couple named Smith have offered $140,000 and have written a deposit check for $10,000. Your agent reports that the buyers' agent says they made a serious offer and don't want to negotiate further on price.
Scenario B: Your agent calls and says a couple named Jones have offered $140,000. Your agent told their agent you would need a deposit check of at least $5,000, but the buyers are balking. They want to write a deposit check for $1,000 on the deal.
Which deal are you most likely to accept, or at least seriously consider accepting? With Deal A, there appears to be a good chance of selling your house quick, even if maybe not at as high a price as you want. I think most of us would seriously consider the deal, and maybe take it.
With Deal B, you have some buyers who don't want to put money up, and want a bargain price to boot. I imagine I would counter-offer a higher price and a higher deposit, but would not take the deal.
The difference in what some posters are saying relates to whether the salesman or customer brought up the deposit check, and whether it is a buyer's tactic to shorten negotiations or a seller's tactic to psychologically "handcuff" the buyer.
Please don't take this in an antagonistic way, but I can't believe there are no Sequioas within 100 miles of you.
2001 Prelude Type SH, 2022 Highlander XLE AWD, 2025 Camry SE AWD
I think, in all honesty, landru2 and I had two different scenarios pictured in our heads. He was picturing (I think) a situation where a customer walks in and makes an agressive, low-ball offer without much discussion, sort of "here's my price - take it or leave it!" I can see where making a deposit there would demonstrate that the buyer was serious. That makes sense to me. (landru2 can correct me if I'm wrong.)
I was picturing a situation where me, as a serious buyer, and the salesman had conducted an amicable negotiation for 15 minutes or so, and we both had arrived at a price that we both knew would be the right one. To ask me for a deposit is not unreasonable, but if I answered that "If you get it approved, I'll write a check for the down paynment." that should be the end of it. I don't think landru2 really disagreed with me there either.
The answer really depends on the buyer, and his/her attitude and conduct. The salesman is asking himself is this a serious buyer, or a troll who is going to shop my price? If my conduct doesn't answer the question, then he may need a check to answer it.
What did you sell, by the way?
anyway, you're the guy the consumer is looking for
Now, it depends on the customer... Sometimes I'll ask them to initial an offer if its' very low, or confirm that they are willing to buy it right now for that price.
I.E. "That's a low offer, but if you're ready to do the deal right now, I think we can make it happen. I just want to make sure that you're ready to take delivery, as it will give us both more leverage"
When I was a salesman if I went to the desk with a low offer, their first question was.. "Hmm... are they willing to take it now?" If the answer was no, they'd probably counter me and tell them thanks but no thanks. If they were ready, checkbook in hand, there was a lot more leverage. Much like my posts on fax attacks.. Ifg you fax asking for a dealer's price, you set yourself up for aggravation, but if you fax them saying "Look, for $X I'll buy that sucker NOW" then you have their attention.
Bill
First the short version:
In early December 2000, for the right specs of the car that I want, and located right on the dealership lot, YES, I could not find one within close to 100 miles, although I did not physically drive 100 miles looking for it. But my request via the internet covered a 100 mile radius, and only ONE dealership called with the right specs and the right car and available right on the lot. And that was the one I bought. That simple.
The long version:
The Sequoia was released mid-October 2000, and since Toyota was only making 5,000/month for the entire North America (US and Canada), it was hard to find these vehicles in many dealerships. Besides, all were going for MSRP, which I was not prepared to pay. And for the specifications I wanted, it was even hard unless I factory-order one, which I could have, but I needed the vehicle for a special family occasion.
In person, I went to four dealerships here - Poway Toyota, Toyota of Carlsbad, Kearny Mesa Toyota and Escondido Toyota. The latter had the vehicle but marked way up above MSRP (they added AM chrome wheels to jack the price even higher). Together, these 4 dealerships covered close to 40 mile radius from where I live. Ordering would take 5+ weeks for such a brand new vehicle, besides many dealerships were not prepared to take orders, since they were selling these vehicles at or above MSRP. That was pure demand-and supply.
Then I figured I could do better going via the internet. 3 days later I got a call from one of the local dealerships (one of the above, actually Escondido Toyota with the chrome wheel vehicle). They have the vehicle but missing one piece that I could get AM. So I agreed to buy and that was that. I didn't have to wait more than 1 week to take delivery, and it was well in time for the special family event. AND I paid $1000 off MSRP, saving myself a total of $1650 or thereabouts with the difference in the mark-up cost of the chrome wheels which I retained, btw.
I took this long to answer your rather "simple" query. Hope this clarifies things for you...
There must be a statue of the guy somewhere.
After all, look at what he started - an industry full of people trying to sell vehicles by making the customers 'make us an offer'.
I like asking "What's the cash price on that car?"
Acceptable answers do not include "What does it matter if you're not going to buy it today?", "What kind of payment are you looking for?", "We can't discuss price until you drive the car." and "What's it worth to you?
I buy cars the way I buy almost everything. I research it and then go looking. If I see a suit, or shotgun, I like in a store window and it doesn't have a price on it, then I go in and ask. If it's too much, I walk. Same with cars.
They sell, I buy. And I can't buy if they won't tell me how much it 'really' is.
The downside is, when successful, that after I finish talking to them there isn't much to negotiate and nothing to argue about. I almost hate it when they name a price I can't refuse. I'm usually just getting warmed up
I bought a '02 Forester S w/leather the last day of August and their opening price (I don't count the fantasy sticker) was invoice plus $100. That's about $500 or $600 under Edmunds TMV, but by then I was aiming for a couple of hundred under the invoice. That didn't happen, but they came down a little bit more.
Anyway, who invented this inverted sales system?
John
I'm about to buy a new car; I'm waiting for the 2002s. I think a fair price is $1,500 over invoice, and that's what I'm willing to pay. Sign the papers immediately with the first guy who delivers the right color at this price.
My inclination is to be straightforward: This is my offer. But is it better to start lower--offer $1,000 over, and let them negotiate me up the extra $500?
you should already know what's the maximum you'll pay for a particular model.
if the sales person goes first, he'll start at msrp. you counter with $500 under invoice. when he is finished laughing at you, you tell him their surely is a number in between you can agree on.
you may get lucky and get it under your target price. or he may not budge... so you walk. this process shouldn't take more than a half hour.
the example of the $1,500 offer over invoice in a previous post: it may very well be the price that model is selling for and you saved a lot of time, but how would you feel if the salesman pats you on the back and offers to take you and your wife out to dinner?
Don't like the price? It's up to you to make an offer!
If you do not ask, you do not get.
Liek I said in another topic... Say you are selling a car, you have it advertised for $7,900 and your bottom line price is $7,000. Say its' been advertised for a week.
Say I walk up, and one fo two things happens. I ask you the cheapest you'd sell it for... You might say $7,200.
But what if I look at the car, Like it, and plop 68 $100 bills on the table. Do we have a deal? I bet you're saying yes right now. If I asked youfor your best price, would you have said $6,800? Didnt think so.
Make sense?
Bill
You can't shoot so low to start that they don't take you seriously, though.
Start at invoice and never go above what you feel is a fair profit. For me $300-$500 max is it whcih I have nto done in 10 years. Usually invoice or less. . Once you reach your concept of the offer price never negotiate beyond this, never fall for the crap, let's split the difference.
In todays market where cars are piled high in lot lanes and you can only walk through by standing sideways I would stay at invoice and be firm and wait until the end of the month. If they haven't called back by then try elsewhere or up it a little.
As to financing, do the calculations, some 0% costs more then financing if the deal sucks. Like a lease, they may calculate the price on MSRP not on negotiated amount.
as for being a buyer's market because of the cars piling up on the lots... i really hate to see that. it may give you an advantage in negotiating a good price, but that also means that the auto workers and anyone that supplies them is hurting. the impact goes way beyond the auto industry when the auto industry is slow.
i'd rather pay a few more dollars then see what's happening in our country.
search TownHall discussions effectively, I hope you'll bear with me
(and point me to the proper article numbers, if appropriate).
How does the "Internet" invoice that we can all easily get a hold of differ
from what the dealer may show us?
I know one item that appears on at least some "real" invoices is a regional
advertising fee imposed by the manufacturer. This fee can be many hundreds
of dollars, and from what I understand, the dealer has to pay this amount
when the car comes in (is that so?).
What other line items are there on "real" invoices that aren't on the
"Internet" invoices? I realize that different manufacturers will have
different items; I'm trying to get an idea of all the things I can
expect to see.
What's the difference between "factory" invoice, "dealer" invoice,
and "net" invoice? Are there any other kinds of invoices?
So those of you who go in with an offer based on "invoice", which
invoice are you using? Do you make your offer after seeing the dealer's
invoice? Or are you going in "blind", based on the "Internet" invoice?
Thanks for any info you dealers and buyers can share.
Erik
Subaru Impreza TS wagon
Ford Focus ZX5 (new to the US in 2002 model year)
Hyundai Elantra GT (4 door hatchback)
Thanks!
Erik