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Craig · 10-31-2005, 03:11 AM

I've spent a lot of my career in automotive retailing management, not in sales ... here's my $0.02.

Keep the sale / trade of your current car separate from the purchase - most consumers think their old car is worth more than it is, but the dealer has to pick it up at wholesale to make decent gross.* They usually do that by appearing to give you more for your trade than it is worth, and packing the difference into the car you're buying.* Your old car is frankly too old for most dealers to want ... best choice is to sell it yourself through AutoTrader, etc.
I've heard locally that CarMax has a tendency to underprice luxury cars ... check them out in your area.* Best choice, where possible, is to buy a slightly used car, lowest miles possible, and drive it forever / into the ground (this is the secret shared within the industry, but of course all retailers are very glad people like to trade often!).* Consider an extended service contract, if you can negotiate a decent price ... those are very negotiable.* Also consider Certified Pre-Owned from the dealer ... Lexus and Acura dealers tend to be very solid, and the CPO programs can be worth the extra cash and peace of mind.
Not true anymore that you can get a better price for a cash deal ... though you can ultimately save money by doing so.* F&I (finance and insurance) departments are a major profit area for dealers ... we call it "back end" gross profit ... dealer borrows at 4%, and lends to you at 6% ("buy" rate, versus retail rate, effectively like a bank).* You're normally best off to either pay cash, or arrange your own financing ... credit unions tend to be the best ... 4.5% loans (give or take) are easy to find.* I've always found it wise to join credit unions whenever possible.
If you buy from an individual (which can be a good way to go), have the car inspected by the dealer ... worth your time and money.* However, reputable dealers will stand behind the preowned cars they sell.* I've had plenty of private parties lie to me and try to screw me (and my employers) on cars they knew to be bad ... you have little practical recourse with a private party.* I'm leery of dealers, but even more careful with private parties.
Consider using Consumer Reports to research the models' reputations, and CarFax to check an individual car's history.* However, both Lexus and Acura tend to be bullet proof.* Note that the more gizmos you get on the car, the more expensive it can be to keep it running in the out years.* To check it out, call a dealer and ask what it costs to replace a navigation system, for example.* Not trying to discourage your choices at all ... but it's not like getting a '65 Falcon running again ... cars are very complicated now, and loaded with computers.
Usually, new cars are a bad idea.* However, you should confirm that is not the way to go before you assume used is the better deal.* We nearly purchased a used Camry once, only to discover (in time) that incentives on tne new Camry made the used car a poor economic trade-off.* Between goofy lease deals and other incentives, sometimes you'll be surprised about new car deals ... but again, the dealer makes their gross on such deals by getting back end gross (F&I), dealer incentive cash from the OEM, etc.* If you pay cash for the car and don't succumb to any other uses of your cash, you can be surprised at the deals.
Definitely true that buying a car first and a house second can be a credit challenge. While you're waiting / hoping for the real estate market to cool, assume you need to either pay cash, or amortize the car debt rapidly in anticipation of that home loan.

Best of luck, and have fun with your new wheels.

10-31-2005, 03:11 AM	#9
Craig Full time employment: Posting here. Join Date: Dec 2004 Posts: 714	I've spent a lot of my career in automotive retailing management, not in sales ... here's my $0.02. Keep the sale / trade of your current car separate from the purchase - most consumers think their old car is worth more than it is, but the dealer has to pick it up at wholesale to make decent gross.* They usually do that by appearing to give you more for your trade than it is worth, and packing the difference into the car you're buying.* Your old car is frankly too old for most dealers to want ... best choice is to sell it yourself through AutoTrader, etc. I've heard locally that CarMax has a tendency to underprice luxury cars ... check them out in your area.* Best choice, where possible, is to buy a slightly used car, lowest miles possible, and drive it forever / into the ground (this is the secret shared within the industry, but of course all retailers are very glad people like to trade often!).* Consider an extended service contract, if you can negotiate a decent price ... those are very negotiable.* Also consider Certified Pre-Owned from the dealer ... Lexus and Acura dealers tend to be very solid, and the CPO programs can be worth the extra cash and peace of mind. Not true anymore that you can get a better price for a cash deal ... though you can ultimately save money by doing so.* F&I (finance and insurance) departments are a major profit area for dealers ... we call it "back end" gross profit ... dealer borrows at 4%, and lends to you at 6% ("buy" rate, versus retail rate, effectively like a bank).* You're normally best off to either pay cash, or arrange your own financing ... credit unions tend to be the best ... 4.5% loans (give or take) are easy to find.* I've always found it wise to join credit unions whenever possible. If you buy from an individual (which can be a good way to go), have the car inspected by the dealer ... worth your time and money.* However, reputable dealers will stand behind the preowned cars they sell.* I've had plenty of private parties lie to me and try to screw me (and my employers) on cars they knew to be bad ... you have little practical recourse with a private party.* I'm leery of dealers, but even more careful with private parties. Consider using Consumer Reports to research the models' reputations, and CarFax to check an individual car's history.* However, both Lexus and Acura tend to be bullet proof.* Note that the more gizmos you get on the car, the more expensive it can be to keep it running in the out years.* To check it out, call a dealer and ask what it costs to replace a navigation system, for example.* Not trying to discourage your choices at all ... but it's not like getting a '65 Falcon running again ... cars are very complicated now, and loaded with computers. Usually, new cars are a bad idea.* However, you should confirm that is not the way to go before you assume used is the better deal.* We nearly purchased a used Camry once, only to discover (in time) that incentives on tne new Camry made the used car a poor economic trade-off.* Between goofy lease deals and other incentives, sometimes you'll be surprised about new car deals ... but again, the dealer makes their gross on such deals by getting back end gross (F&I), dealer incentive cash from the OEM, etc.* If you pay cash for the car and don't succumb to any other uses of your cash, you can be surprised at the deals. Definitely true that buying a car first and a house second can be a credit challenge. While you're waiting / hoping for the real estate market to cool, assume you need to either pay cash, or amortize the car debt rapidly in anticipation of that home loan. Best of luck, and have fun with your new wheels.