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How to buy a new car?
Old 03-22-2006, 09:59 AM   #1
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How to buy a new car?

My wife is getting a new car.* She has narrowed it down to a BMW 325i or Volvo S60 2.5T and she knows the exact options she wants to include.* *We only buy cars every 10 or 12 years, so I'm not currently familiar with how the current negotiations with car dealerships works.* We have done some homework and know what the (published) dealer's invoice and MSRP prices are.* The car needs to be set up for California emissions; we are not in any immediate hurry, so it can be ordered, and finally we intend to pay cash.* What is considered to be a good price to pay in relation to these figures?* * Are there any rules, techniques or advice you all can suggest?*
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Re: How to buy a new car?
Old 03-22-2006, 10:42 AM   #2
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Re: How to buy a new car?

Get internet quotes from the local area dealers with the exact specifications you want. The dealers usually assume those shoppers requesting online quotes are internet savvy and have shopped around. Hence you get a good price. Take the best quote and use it to work all the area dealers down more. Negotiate over the phone or go in person. If they start taking too long and intentionally drag their feet, walk out. Pay whatever you think is fair. Probably somewhere between invoice and MSRP for those cars.

Try carsdirect.com too.
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Re: How to buy a new car?
Old 03-22-2006, 10:54 AM   #3
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Re: How to buy a new car?

Carsdirect looks pretty good to me too. You pick your model and options, they tell you what the best price they can get for you is, you say yes, they hook you up with a dealer and a sales rep who has the car, you go there, sign the paperwork, get the usual rigamarole about buying fabric and paint protection, extended warranties and so forth, and drive off.

I paid pretty close to the carsdirect price on our last car purchase, and i'm a good negotiator.

If carsdirect says there are no participating dealers in your zip code, pick a zip code of a nearby larger cityish area with a lot of car dealers. You might have to drive a ways to get the dealer with the best carsdirect deal, but you can have your service done at any dealer, so its a one time trip.

Check with costco and sams club as well if you're a member. My experience is that their prices arent that great. But its similarly easy.

Also check with the dealers "internet sales rep" or "fleet rep" to see what they'll offer.

In my case, the approved "costco rep" said he could take "several thousand" off the sticker. The "internet rep" from another dealer offered me $7k off. Carsdirect offered $9k off. I got a little better than that calling up a dealer, confirming with him that he was NOT a carsdirect participating dealer, telling him what the carsdirect price was, going through the process of walking him through pulling up carsdirect, picking the car, seeing their price, and then asking him to beat that no-brainer, no-problem price. He did. And I promised him if the price changed in an upward manner when I got there, that I'd leave skidmarks on the way out of the dealer. Actually the car I wanted lacked some $50 mats or something for the trunk and he adjusted the offered price down by the $50 to suit. Not bad.

or you can do a lot of leg work, call all the 'fleet sales' people at all the dealers, get their 'best price', then go back to them with the lowest price for the next round, rinse and repeat until you bottom out and/or they're all pissed at you. Then making sure they have your phone number, go away for a week or two and play "I'm making up my mind" or "I have some other things to deal with, i'll get back to the car buying soon". In my case, the baby 'got sick' and I had that on my mind. Within a few days one of these guys will choke and drop their pants on the price just to make the deal.

On the paint sealer and fabric protection...for what you pay its unlikely you'll ever suffer a covered damage that will end up saving you money.

The extended warranty protections are very negotiable and if you feel the car is likely to be unreliable, buy it but hem and haw about it until you feel like you're so undecided that the finance/sales guy beats HIMSELF. By the way, you can almost always buy these anytime until the regular warranty expires, and for the same price or better than when the car is new. So drive it a couple of years and see if its a lemon...if it is, call all the local dealers and ask them to pitch you their best price on the warranty.

Small edit: the finance sales guys pitch on all the addons can get a little onerous. I shortened it up by looking closely at the brochure he was waving in front of me and saying "Ok, I read all that and I think I know what the extras entail, what are the prices"..."Oh...those sound a little high, so no thanks"..."Ok, if I had to pick just ONE I'd take the extended warranty (your answer might be different...)"..."That still seems a little high"..."Its that price for today only?"..."Well, if I had to decide right now, i'd have to say no."..."Oh...I can get that same price anytime this week? How about next month? Yes? Well I'll have to think on it but right now I think i'm probably not going to do it"..."oh, that price is good for the next three years unless your cost goes up? Thats good."

Basically cut the spiel short, focus on what you want, get the price redone twice to get to where his low spot is. The 'today only price' is going to be good for more than today, and it may not be the lowest price. And you can usually wait and see before buying.
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Re: How to buy a new car?
Old 03-22-2006, 11:51 AM   #4
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Re: How to buy a new car?

Quote:
Originally Posted by Cute 'n' Fuzzy Bunny
Within a few days one of these guys will choke and drop their pants on the price just to make the deal.
With the end-of-the-month and the end-of-the-quarter sales incentives coming up, do you think they're feeling any pressure?
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Re: How to buy a new car?
Old 03-22-2006, 11:54 AM   #5
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Re: How to buy a new car?

Riskaverse,

If you are a member of a Credit Union, you may have access to the Autoland program.

At our C.U., you tell the Autoland buyer exactly what you want, and they go out state wide and get prices. I did this, and got a Jeep for $0 over invoice. They delivered the Jeep (from L.A.) and I picked it up at the local credit union. If you don't like to haggle, this is a great way to go.

Good luck,
Mike
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Re: How to buy a new car?
Old 03-22-2006, 12:00 PM   #6
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Re: How to buy a new car?

Consumer Reports also has a service where for a few bucks they'll tell you what the dealer's cost is for the vehicle you're interested in. I found that helpful when we were negotiating with three different dealers for a special-order car.

One annoying tactic is that two of the dealers silently tacked on an "advertising fee" after we'd agreed on a price. I say "silent" because it wasn't mentioned, it just showed up in the final paperwork. The first dealer wouldn't drop it, so we walked. The second dropped it under pressure.

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Re: How to buy a new car?
Old 03-22-2006, 12:00 PM   #7
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Re: How to buy a new car?

I bought a new car last month using the internet. Asked for bids from 3 area dealers for same car. It started off pretty much like going to dealer and screwing around with sales guy (emails back and forth) - I finally got irritated and just told them what I would pay above invoice and one of the three came back almost immediately with yes.

Wife loves her new car Acura TL with Navigation
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Re: How to buy a new car?
Old 03-22-2006, 02:51 PM   #8
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Re: How to buy a new car?

Quote:
Originally Posted by F-One
I bought a new car last month using the internet. Asked for bids from 3 area dealers for same car. It started off pretty much like going to dealer and screwing around with sales guy (emails back and forth) - I finally got irritated and just told them what I would pay above invoice and one of the three came back almost immediately with yes.

Wife loves her new car Acura TL with Navigation

You got one great car... what I got a couple of years ago...

BUT, to the original question... do what a couple of guys did here... now that you KNOW what you want, put it in a letter and fax to the fleet guy to all dealerships within a 300 or so mile circle... one guy did 12 faxes... say what you want, what color combos are acceptable etc... get the best price and if you want, go to the local dealer and say match it or else.... every one has been matched that I have heard about.
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Re: How to buy a new car?
Old 03-22-2006, 04:02 PM   #9
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Re: How to buy a new car?

And make sure you get a better price than carsdirect. If not, go with them.
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Re: How to buy a new car?
Old 03-22-2006, 08:31 PM   #10
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Re: How to buy a new car?

Several posters mention contact the "fleet guy". That name sounds like someone who deals with customers buying multiple cars at a time. Are you saying the fleet guy will also deal with someone buying one car vs. working with one of the regular sales people ? (I know you must be saying that or you would not have suggested it, but it is surprising to me.)
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Re: How to buy a new car?
Old 03-22-2006, 08:36 PM   #11
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Re: How to buy a new car?

The "fleet guy" and the "internet guy" are often the same "guy" or "guys". They get paid a salary and usually a per car fee by the dealer rather than a floating commission. They're best off moving lots of cars than getting the very best price.

Someone who knows enough to ask for "the fleet guy" is probably going to be more trouble than a regular sales guy is willing to spend. They want Joe Mook and his family in the box to work over to sell over sticker plus the fabric protection and the extended warranty...
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Re: How to buy a new car?
Old 03-22-2006, 10:08 PM   #12
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Re: How to buy a new car?

  • Research and learn about "holdback"
  • As noted above, negotiate between a few dealers
  • Make sure you understand the entire deal, including doc fees, etc.
  • Don't trade in ... if you have a trade, sell it yourself, or have a dealer sell on consignment
  • Recognize the dealer probably isn't making as much money as you think ... and pity the poor ba$tard whose costs are advertised to the world over the 'net.* The car business is a rough place these days.

Best of luck.
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Re: How to buy a new car?
Old 03-26-2006, 07:05 PM   #13
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Re: How to buy a new car?

Postmortem on the car purchase.

I thought I should tell everyone how the car purchase turned out.* My wife started the process by emailing all the local BMW and Volvo dealers the specifications on the cars she wanted, including all the accessories, packages etc.* Twenty minutes later the phone lit up and we became the popular couple for the next week.* We averaged about 6 to 8 calls per day, none of which we especially wanted to answer.* The salesmen always wanted to sell cars off their lots, and typically didn't have the exact features we had.* They all said they could order the car, but also seemed reluctant to quote prices.* A BMW dealer quoted $1K over invoice, so we had a starting point at least.* My wife had been test driving both models at local dealers, so she also had a ballpark starting point from them as well, but it was closer to MSRP than invoice.* At this point we decided to look at Carsdirect.com and see what their price was.* While the BMW price was similar to the 1K above invoice we had been quoted, the Volvo price was below invoice.* We now had a clue that the Volvo was going to be a price that could be discounted quite heavily.* I had my wife drive her current Volvo (1995) up to the local dealer who had let her test drive the car, and get a trade in quote.* They quoted a pretty high price (4000) while it was our best estimate that blue book value was between 2500 and 3500.* This seemed to be another clue that Volvo was eager to deal.* Given all this information, we decided to make an offer to the local Volvo dealer.
The MSRP was approx $40K out the door (taxes, license, fees etc).* The invoice price was approx 37K out the door.* The carsdirect price was approx $34.9K out the door.* We offered the equivalent of $32500 (29.5K cash + $3K trade in) out the door.* While I expected an immediate rejection followed by some back and forth negotiations, I was floored when they accepted it.* Of course the first thing I thought was I offered too much, but I really was happy with the price, so we closed the deal.* Now the next day when we picked it up they said they made a mistake, but frankly I have been conditioned to never believe car salesmen or real estate people.* They probably say that to everyone to convince them they are getting such a good deal.* After all, does anyone every think they didn't get a good deal buying a car?* *Mistake or not, they honored the price and my wife is very happy with the new car.*
I want to thank the contributors to this thread for their advice, it proved to be very valuable in this transaction.
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Re: How to buy a new car?
Old 03-26-2006, 07:16 PM   #14
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Re: How to buy a new car?

Congratulations, RA!
Quote:
Originally Posted by riskaverse
Now the next day when we picked it up they said they made a mistake, but frankly I have been conditioned to never believe car salesmen or real estate people.* They probably say that to everyone to convince them they are getting such a good deal.* After all, does anyone every think they didn't get a good deal buying a car?* *Mistake or not, they honored the price and my wife is very happy with the new car.*
I think TH said that you knew you had a good deal when the sales staff looked at you like they knew you poisoned their favorite dog but couldn't prove it...
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Re: How to buy a new car?
Old 03-26-2006, 11:07 PM   #15
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Re: How to buy a new car?

Quote:
Originally Posted by sc
Consumer Reports also has a service where for a few bucks they'll tell you what the dealer's cost is for the vehicle you're interested in. I found that helpful when we were negotiating with three different dealers for a special-order car.
I got the cost directly from the dealer just by asking.* To double check I asked two other dealers for the same cost sheet for the identical vehicle.* All the cost numbers matched and I believe the cost numbers were identical to Consumer Reports.

I offered to buy the vehicle at cost from one of the dealers and they said no.* Another said yes, and another actually gave me a rock bottom price of $200 below cost.* When I asked why they would sell me a car for $200 below their cost, they said they had the largest volume in car sales in the whole northeast, so they were still ahead with dealer incentives.

It was an end of December purchase, so maybe that made a difference.
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Re: How to buy a new car?
Old 03-27-2006, 06:22 AM   #16
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Re: How to buy a new car?

Quote:
Originally Posted by sc
One annoying tactic is that two of the dealers silently tacked on an "advertising fee" after we'd agreed on a price. I say "silent" because it wasn't mentioned, it just showed up in the final paperwork. The first dealer wouldn't drop it, so we walked. The second dropped it under pressure.
SC
The same thing happened to me. When I saw the advertising fee I gave them a look and told them to take it off. They told me what an advertising fee was and I told them to take it off again. They took it off. If they didn't my next step was to put a credit line on the invoice in the same amount of the advertising fee for "Buyer reading advertising fee"
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Re: How to buy a new car?
Old 03-27-2006, 06:24 AM   #17
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Re: How to buy a new car?

Cute 'n' Fuzzy Bunny,
Nice post.
Do you have any experience with BJs Auto buying service?

I might be in the market for a new pick up truck in April.
thanks
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Re: How to buy a new car?
Old 03-27-2006, 07:22 AM   #18
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Re: How to buy a new car?

Quote:
Originally Posted by Nords
Congratulations, RA!I think TH said that you knew you had a good deal when the sales staff looked at you like they knew you poisoned their favorite dog but couldn't prove it...
Wow you have a good memory.

Dex - I used to be a BJ's member when I lived back east! You can certainly have a lot more fun with their name than costco or sams club. I imagine their auto buyers service is similar to the other warehouse clubs, but its worth a whirl. They're usually working from a price sheet that the BJ's Head Office (snork) works up with each manufacturer, which is either a percent off of retail or a percent added on to invoice. Most car co's work up these deal sheets and they become the standard 'internet price sheet' and 'wholesale club sheet'.

Those CARSDIRECT prices are usually good looking though, if you want to avoid the shennanigans. You might do a half a percent to a percent better, maybe deeper on certain models in certain circumstances in certain regions, but it might not be worth the effort to beat up the dealer.

In our case with our Lexus, the LS430 is due to be replaced by the LS460 and an optional longer wheelbase version thats expected to be a big seller. The local dealers are loaded with '06 430's and a lot of buyers are waiting to get the new model and not get orphaned by owning a new-old model. That'd be a valuation issue if we were to try to sell in a couple of years. As it is, Gabe might be driving this car when he gets his license in ~15 years

Last thought is to not pay a lot of attention to invoice. Besides there being more than one 'invoice', dealers get all sorts of spiffs, rebates, holdbacks, advertising, promo's, model wide kickbacks, dealer wide incentives, regional incentives, gifts, trips, free financing to keep some or all of the cars on their lots, etc. The old days of the dealer 'buying' the cars on credit, having to pay to run their own ads, and the cars eating a hole in their wallet every day they sat on the lot are days gone past.
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