How To Buy A New Car

[zinger1457]

For the 2018 models Consumer Reports rates the Forester very highly and overall above the Outback. Main difference seems to be the reliability, Forester is rated as excellent, Outback average.

 

[Southern Geek]

I have used a variation of methodology outlined in the original post for purchase of my last 2 new vehicles - a Toyota Prius Four purchased in 2015, and a 2018 Honda CR-V EX-L purchased a couple of days ago.

Some Takeaways from my experiences:

1. As someone noted in an earlier post, it is impossible to get an e-mail address where you can send a Request For Quote (RFQ) to the dealer. It is clear that in this day and age, that this is done on purpose. They don't want to make it easy for buyers to force them to compete. In both cases, to start the process, I had to go to each dealer's website; find the Contact Us form; fill out the form and copy the text of my RFQ to the Comments field; submit the form; and wait for a response. If I got I response via e-mail that was not a quote, I would reply with a copy of RFQ attached and ask for a quote in response.

2. The author of the article referenced in the original post seems to imply that every dealer to whom you e-mail a RFQ will provide a firm quote in response. This is not my experience. Only about 50% of dealers will respond with a firm quote to a RFQ provided via Internet (Web or e-mail).

3. I always got a firm quote from dealers affiliated with regional or national chains, or from a local dealer that owns multiple dealerships (the high volume dealers). These quotes were always the lowest I received. I never got a serious quote from any of the local owner, 1 lot dealerships. In most cases I never got a quote at all.

4. The dealers associated with regional and national chains know how to do business via the Internet. They have staff dedicated to Internet Sales that understand that selling to a serious internet customer is different from selling to a walk-up. They would reply promptly with a firm quote via e-mail. They did not try to contact me via phone or text message. The 'internet staff' at the small dealerships are just there to generate sales leads.

5. Quotes have to be normalized. My RFQ would request that the quote be provided in same format as a Buyer's Order (or Retail Purchase Agreement). Since both of the purchases I did were cash only, no trade-in, I expected the numbers including computed sales tax to be exact. And yet, almost every quote I received estimated the sales tax even though my RFQ detailed how to compute the sales tax for my county of residence. As a result, I had to compute the Sales Tax for each quote to ensure that all quotes had correct Out-The-Door (OTD) price. I also substituted a flat fee for Tag and Title as this fee would be same regardless of who I purchased vehicle from. Everyone had estimated this fee differently (because they didn't know my DOB). Once I had normalized the quotes, I could do a fair evaluation.

For those who would like some more detail, feel free to read on.
Prior to each purchase I prepared a single page RFQ that specified the vehicle I wanted to purchase and stated that I would purchase vehicle next day from dealer who provided lowest OTD quote by 6pm of day I sent the quote. Their quote was to be Best and Final as there would be no subsequent negotiation. The RFP then specifies acceptable exterior/interior colors for quoted vehicle; states quote must be for specific VIN; specifies format of the quote; and states that all quotes must via e-mail. All other forms of communication would be ignored.

For the Prius purchase I provided the RFQ to 5 dealers within 60 miles of my residence.
Dealer A responded within an hour with a great OTD quote.

Dealer B responded 15 minutes later with a OTD quote $150 more than Dealer A.

Dealer C phoned multiple times. I did not answer. Never contacted me by e-mail.

Dealer D first tried to call then responded with e-mail asking me to come to dealership so they could tell me all about the Prius. No quote. My reply was to tell them to send a quote. The response was they would be sending a quote shortly. Never did get a quote.

Dealer E never responded. No phone. No e-mail.

I purchased vehicle next day from Dealer A for the quoted price (Which was at low end of the Truecar, NADA, Edmunds, etc. price ranges).
Dealers A was owned by a large regional chain. Dealer B was owned by a national chain. All the rest were local.

------------------------------------------------

For the CRV purchase I ended up providing RFQ to 6 dealers within 60 miles of my residence.
Dealer A responded promptly with a great OTD quote. However, the vehicle he quoted was non-compliant with the color requirements. This was because he had no compliant vehicles in inventory.

Dealer B texted and called, but never sent a quote.

Dealer C acknowledged receipt of the RFQ, but never heard anything from them after that.

Dealer D requested some additional information and stated that I would receive a quote by the deadline. Never did receive quote by deadline. However, did receive quote next day after I had already purchased vehicle. The quote was not for a specific VIN and had bunch of contingencies. So, even if they had met the deadline with the quote, I would have had to discard it.

Dealer E responded with a quote that included $1000 of dealer add-ons. I replied that their quote was their quote, but if they wanted to be competitive they would need to quote a base vehicle per the RFQ. Dealer's response was that only vehicles they had which didn't have the add-ons were in colors excluded in the RFQ. However, when I had looked at their website it showed they had 6+ vehicles that met the color requirement and all were listed at base MSRP (which indicated no add-ons). It was evident that this dealer did not really want to participate. This was disappointing as it was dealership closest to my residence, and it was dealership with most EX-L in their inventory.

Dealer F is owned by same local family that owns Dealer E. Dealers E and F used to be independent, but E bought F 15+ years ago. Initially, I did not send the RFQ to Dealer F because I assumed that their operations were completely integrated by now and sending a RFQ to both would be redundant. But, after Dealer E declined to send a quote on a compliant vehicle, I decided to send RFQ to Dealer F anyway in hopes of working with some different personnel. A while later I receive the lowest quote of the day, but the quote is for a vehicle in wrong color. I look at their website and see they have 2 vehicles in inventory that are in required colors. I respond to their quote asking if they would provide a quote on either on those vehicles as I would have to reject their first quote.
Right before my deadline, they send me an e-mail informing me that they would sell me a particular one of the vehicles for same OTD price quoted previously.
The quoted price of vehicle (excluding dealer fees, tax, tag/title) was outside the low end of the price ranges provided by Truecar, NADA, Edmunds, etc., so I knew it was an exceptional price.


I bought CRV from Dealer F the next day.
Dealer A is owned by a regional chain. Dealer E/F own by a local family that owns multiple dealerships across multiple manufacturers. All the rest were smaller, local dealerships.

 

[aja8888]

Southern Geek, rather than quote all the the above post, I'll say "thanks" for the analysis.

I tried a similar exercise a couple of years ago for our purchase of our Hyundai Santa Fe and virtually no dealers responded to my RFP and the one that did was not in the ballpark we wanted to spend. We ended up at a volume shop and worked a deal probably as good as possible, but it took several hours.

Buying new cars is a frustrating experience overall.

 

[Gotadimple]

Southern Geek,
My process was similar but not so detailed. Using KBB and CarGurus, I identified the vehicles that met my needs, then, contacted the dealers directly through their own web sites asking for an appointment for a test drive.


Dealer A was 9 miles away, Dealer B was 25 miles away and both are owned by the same family - apparently they operate independently. This family is the volume Hyundai dealer at the Dealer A location in this state. Between these two dealers there were only 4 cars similarly equipped, 2 with color combos I wasn't interested in. Similarly equipped vehicles were available 50+ miles away.



Test drives were no hassle, just a drive where the internet sales rep focused on showing the features of the car. CarGurus showed the pricing history on each vehicle, Dealer A had their car on the lot since March with a history of modest price decreases every month. Dealer B had the same car $1200 cheaper with no change in pricing history since April.


The day after my test drive, Dealer A dropped the price by $1000, still $270 over Dealer B. I emailed and asked for an OTD price, and received the same price as on their website, good only for 2 days. That meant that was the price for anyone who walked in off the street (about $9K off MSRP with $4500 from the manufacturer).


I responded with a short note citing their pricing on the car (with rebates) in each month since they had it and asked for an additional $500 off - and an all cash deal. Dealer Dealer B had the same car for a slightly lower price. That put the pricing $250 below Dealer B.


They accepted the reduction but needed to a signed purchase agreement the next day, which wasn't an issue for me. We agreed to delivery later that week once my cash was available. They also would have held my check until cash was available.


So 2017 Hyundai Sonata Limited Hybrid for $9400 under MSRP. MSRP is a meaningless number in an area where cars sell under MSRP due to layered rebates. What I ended up with was a price $2,500 below the net price after rebates.

 

[Southern Geek]

Southern Geek,
....
Dealer A was 9 miles away, Dealer B was 25 miles away and both are owned by the same family - apparently they operate independently....

When I went to pick up the CRV from Dealer F, I told the sales guy that I was gobsmacked that they competed with Dealer E since they were under same ownership. He said it had always been that way - they still operated as if they were independent. So, apparently this is not uncommon. I wonder if it is a condition imposed by manufacturers on owners of more than one dealership in same area.

 

[retiredunder50]

I have used a variation of methodology outlined in the original post for purchase of my last 2 new vehicles - a Toyota Prius Four purchased in 2015, and a 2018 Honda CR-V EX-L purchased a couple of days ago.

Congratulations on your results! Looks like you made some great deals.



One word of caution: some of the 2017 and 2018 Honda CR-Vs seem to have some problem with gas mixing in with the oil in the cars with the 1.5L engines. Just keep an eye out for possible rising oil levels and an occasional sniff for gas. Google Honda CR-V gas and oil.


When shopping for a car, I also check carcomplaints.com for a source as to potential reliability and common issues to expect. It is an excellent site with a huge database (including recall info, TSB, NHTSA complaints,...). There are obviously fewer samples for newer cars. It's very good for used car shopping.

 

[mn54]

Southern Geek,
My process was similar but not so detailed. Using KBB and CarGurus, I identified the vehicles that met my needs, then, contacted the dealers directly through their own web sites asking for an appointment for a test drive.


Dealer A was 9 miles away, Dealer B was 25 miles away and both are owned by the same family - apparently they operate independently. This family is the volume Hyundai dealer at the Dealer A location in this state. Between these two dealers there were only 4 cars similarly equipped, 2 with color combos I wasn't interested in. Similarly equipped vehicles were available 50+ miles away.



Test drives were no hassle, just a drive where the internet sales rep focused on showing the features of the car. CarGurus showed the pricing history on each vehicle, Dealer A had their car on the lot since March with a history of modest price decreases every month. Dealer B had the same car $1200 cheaper with no change in pricing history since April.


The day after my test drive, Dealer A dropped the price by $1000, still $270 over Dealer B. I emailed and asked for an OTD price, and received the same price as on their website, good only for 2 days. That meant that was the price for anyone who walked in off the street (about $9K off MSRP with $4500 from the manufacturer).


I responded with a short note citing their pricing on the car (with rebates) in each month since they had it and asked for an additional $500 off - and an all cash deal. Dealer Dealer B had the same car for a slightly lower price. That put the pricing $250 below Dealer B.


They accepted the reduction but needed to a signed purchase agreement the next day, which wasn't an issue for me. We agreed to delivery later that week once my cash was available. They also would have held my check until cash was available.


So 2017 Hyundai Sonata Limited Hybrid for $9400 under MSRP. MSRP is a meaningless number in an area where cars sell under MSRP due to layered rebates. What I ended up with was a price $2,500 below the net price after rebates.

Did you buy this car in 2017 or more recently? Dealers are obviously willing to deal more if the car has been sitting on their lot for a year.

 

[Midpack]

For those who found it difficult to get a RFQ/RFP direct from a dealer, why try? Just use edmunds.com, truecar.com or a similar service and they will contact all the dealers who ARE willing to quote. That doesn't mean you have to work with that dealer. Just take the quote to any other dealer you might be interested in, and assume they'll at least match it. If no one will play, then you can go to the dealer who did provide the quote thru edmunds.com et all if that is the best price (unlikely IME). I've never tried to get an RFQ from a specific dealer to start.

 

[Texas Proud]

For those who found it difficult to get a RFQ/RFP direct from a dealer, why try? Just use edmunds.com, truecar.com or a similar service and they will contact all the dealers who ARE willing to quote. That doesn't mean you have to work with that dealer. Just take the quote to any other dealer you might be interested in, and assume they'll at least match it. If no one will play, then you can go to the dealer who did provide the quote thru edmunds.com et all if that is the best price (unlikely IME). I've never tried to get an RFQ from a specific dealer to start.

I used some kind of service like that when I was looking for my sister... the quotes were higher than I got via email... and even these had some that were not specific... like 'come in and we will talk'....

 

[travelover]

I used some kind of service like that when I was looking for my sister... ...........

Did you ever find her?

 

[LOL!]

I googled "Outback OTD" and read what other people had paid for the same car in the past year.

I also looked at nadaguides.com and other websites to see what a decent deal was.

Has anybody here done something similar? Was the price you ended up paying below the lowest prices shown at these two places for the same car with same options?

I'll also say that I used truecar through USAA and the quotes from dealers were thousands of dollars higher than the info learned from nadaguides.com and googling "Outback OTD", so I consider truecar to be a joke.

 

[Midpack]

Has anybody here done something similar? Was the price you ended up paying below the lowest prices shown at these two places for the same car with same options?

I'll also say that I used truecar through USAA and the quotes from dealers were thousands of dollars higher than the info learned from nadaguides.com and googling "Outback OTD", so I consider truecar to be a joke.

Truecar said on average I could expect $3,681 off MSRP. The Costco price was $3,300 off MSRP. After using those and even better edmunds.com quotes from several area dealers, I got $4,900 off MSRP after a few hours negotiating, and then another $350 on my trade in - so arguably $5,250 off MSRP. All these tools are just steps along the way.

Where views here may differ is if anyone thinks there is some way to get the absolute lowest price without negotiating, that any service can get a dealer to just hand you their absolute best price, that won’t happen. You have to do some negotiating, but it’s certainly worth a few hours work to me. I used online quotes (which appeared in my email within minutes), and the Costco quote and negotiated the rest face to face with a dealer for about 1-1/2 hours - you won’t get the best price without face to face at one to three dealers.

For those who just can’t stomach negotiating at all, you will do better with Costco, truecar.com, edmunds.com, etc. than just walking into a dealer cold and fawning over a car. You just won’t get the best price.

 

[LOL!]

For those who just can’t stomach negotiating at all, you will do better with Costco, truecar.com, edmunds.com, etc. than just walking into a dealer cold and fawning over a car. You just won’t get the best price.

I agree. I noticed that a typical best deal was about 15% off MSRP, so I negotiated to that. So if MSRP was $39,000, then negotiate to $33,150 (including all junk fees) except Tax, Title, and License.

 

[rayvt]

Midpack: Just use edmunds.com, truecar.com or a similar service ... I've never tried to get an RFQ from a specific dealer to start.

I used some kind of service like that when I was looking for my sister... the quotes were higher than I got via email... and even these had some that were not specific... like 'come in and we will talk'....

I agree with Midpack. I think a lot of these car-buying tactics are obsolete these days. I suspect that when they get some sort of RFQ in an email, they figure it's from some naif that just read a click-bait web article.

You ask for RFQ's if you are a fleet buyer, not if you buy one car once every 10 years.

When I entered my requirements to truecar(?), I got back emails from 4 dealers. 2 said, "come in", 1 said "I can beat that truecar price by $X000." and one said "I can beat that truecar price by $X00."

I emailed back to these two, "Is that out-the-door (excluding state tax)? What other dealer fees ("processing fee" is the common trick) do you add that you didn't mention?"

Both said, "Nope, we don't add any phoney fees, that's the price."

 

[Midpack]

When I entered my requirements to truecar(?), I got back emails from 4 dealers. 2 said, "come in", 1 said "I can beat that truecar price by $X000." and one said "I can beat that truecar price by $X00."

I emailed back to these two, "Is that out-the-door (excluding state tax)? What other dealer fees ("processing fee" is the common trick) do you add that you didn't mention?"

I used edmunds.com and immediately got back 5 exact $ quotes with VIN numbers for each (for the cars that matched my spec) from 3 different dealers. There were no shenanigans or vague email offers. However, they did call, email and text repeatedly asking me to come in and act on the offers - but I'm OK with that, they ARE trying to sell cars. And once I made a deal (next day) at another closer dealer (not among those who responded via edmunds.com) with the Costco offer, and told the other dealers, they stopped bugging me immediately. The edmunds.com responses were the lowest, and the basis of the deal I finally made (again, well below Costco). FWIW

 

[Texas Proud]

I used edmunds.com and immediately got back 5 exact $ quotes with VIN numbers for each (for the cars that matched my spec) from 3 different dealers. There were no shenanigans or vague email offers. However, they did call, email and text repeatedly asking me to come in and act on the offers - but I'm OK with that, they ARE trying to sell cars. And once I made a deal (next day) at another closer dealer (not among those who responded via edmunds.com) with the Costco offer, and told the other dealers, they stopped bugging me immediately. The edmunds.com responses were the lowest, and the basis of the deal I finally made (again, well below Costco). FWIW

One thing that I found was that there were only 2 cars that met my sister's requirements in the state... so even though I was getting back quotes I knew they did not have the car... I am OK with them getting back to me, as you say they want to push cars out the door...


But we did get a quote from the local guy that was a few miles away from one of those sites (cannot remember which one).... they had one of the two.... at the end of the process they dropped their quote by almost $900 due to matching someone else...


The really funny thing is that we went in the next day to buy the car and somebody had sold it the night before!!! They still matched the price buy sent someone to the other dealership north of Dallas to pick up the other one in the state and drive it back.... I told my sister that was fine as they were $100 more than the local guy and WE would have to drive up there and get it back here....




To add.... one of the things that makes this work is you must be willing to buy immediately... we had set a date of when we were going to make a decision and buy the car, so they knew the decision date... adding that info to the request helped IMO...

 

[Gotadimple]

Did you buy this car in 2017 or more recently? Dealers are obviously willing to deal more if the car has been sitting on their lot for a year.

I bought this car last Friday. Yes, it had been on their lot since March, and they had three others similarly equipped priced the same.

 

[Gotadimple]

For those who found it difficult to get a RFQ/RFP direct from a dealer, why try? Just use edmunds.com, truecar.com or a similar service and they will contact all the dealers who ARE willing to quote.

Because the terms and conditions at any of these sites puts your email out there for future marketing by the websites.

 

[Midpack]

Because the terms and conditions at any of these sites puts your email out there for future marketing by the websites.

Fair enough. FWIW I have been using internet sites to buy cars for over 20 years, starting with autobytel.com, and them having my info never caused a problem I’m aware of - and I’m very cautious about that kind of thing. If you’re on the Internet, your info is being traded around anyway, that horse left the barn a long time ago for most of us.