New car/truck buying

[JP.mpls]

What I'm up to:
I'm hoping to upgrade from a small car to a midsized pickup. I want to be able to carry a bunch of tools and misc household items with me down to Florida. I also want a vehicle for hauling stuff when I get down there.

I've narrowed my selection down to a Honda Ridgeline or Chevy Colorado. The Honda has a smoother ride, but the Colorado is much more loaded up in my price range, and has better towing capacity, which I've now decided that I want.

My buying/negotiating experiences:

Twice in the last two weeks I came very close to purchasing a new truck.

Both negotiations fell apart, because of the trade in value for my car.

My 2018 loaded up Civic is in great shape with only 23k miled. KBB says the trade in is Good:14.6k. Very good:15.2k. Excellent: 16k.

Deal #1 they offered 14.6 trade in. I said I wanted 15.2. They came up to 15.0 via text, and we never got the deal done over $200.

Deal #2 they offered 13.0 trade in , and came up to 13.5. I told them I wanted at least 14.5, and left again. Note: I really liked the truck, and they were playing the game of reducing the price by $1000 with a qualified trade in. I came down two more times to 14.0, and 13.750. They wouldn't budge, and we didn't get the deal done over $250.

My comments:
- I can't believe how stubborn I am.
- I'm not a strong negotiator. Can you believe there wasn't an extra $250 of profit on each of these deals to have the dealership accept my offer? That makes me think I held my ground fairly well.
- Dealerships must still be selling cars with no problem. This guy doesn't want to pay our price, bring in the next guy. Maybe our economy is better than advertised.
- It really is a big game, and I'm assuming I will get screwed to some extent by playing this game. I'm still trying to have some fun with the process. I'm truly not expecting the best deal in town, just trying to not be an easy chump.

PS: I really don't need this truck until fall, so I'm not in a huge rush to make this purchase.

I'm interested in what you think about my silly behavior, what the dealerships did, and the whole new car buying process.

JP

 

[Ready]

It sounds like a form of entertainment for you, or at least a bit of a game to chase the best deal. Or, you just didn’t really want to buy the truck so you passed on the deal over a few hundred dollars. It’s best to sell used cars privately but some don’t like to deal with the hassle. I always do and get better prices than wholesaling to the dealer.

 

[ckelly78z]

Walk into the same dealership without a trade, and see what they will do. You may be surprised at how much better of a price you will get for the truck. Of course this means that you will have to sell your car privately, but 18 Civics are a hot commodity right now, so it shouldn't be a problem.

I listed my 04 Mustang GT earlier today, and have somebody showing up with cash tomorrow morning. I would have given the car to a dealership on a trade deal.

 

[pb4uski]

i think you are focused on the wrong thing... what they give you for your trade doesn't matter... it is the net, out the door price that matters... focus on that... the check you have to write (or loan amount).

I come up with my own numbers for what I think a fair price is for the vehicle that I am buying, for my trade and based on that taxes title and registration... and try to negotiate down to that price.

I once had a car salesperson ask me what I wanted for my trade... and I responded that $50,000 would be nice... and he looked at me oddly until I explained that I was focused on a net out the door price and if they gave me $50,000 of my trade that they would obviously need to sell the car to me for more than $50,000.

Another gotcha is the doc fee. They'll bullshit you that is it required by law or some other rubbish or that they have no latitude and it is required and preprinted on their documents. All bull. It is just an administrative processing fee for them to do their paperwork. I normally leave this until the end but before saying that we have a deal and tell them that I'm not going to pay $500 or whatever it is for them to do their paperwork, especially when everything is so automated these days and if they want a deal they need to eliminate it or make a commensurate reduction to the purchase price. Works every time for me.

Another strategy when you are at an impasse for $200 or $250.... write out a check to the dealership for your amount and hand it to them unsigned and tell them that if they can do it for that check then you'll sign the check... or I guess these days send them a scan of the signed check with an email that you will deliver it to them when you pick up the car. I did that once where I handed the salesprson the check on my way to work and told him that it we didn't have a deal to just "rip it up"... 5 minutes after I got to work the phone rang and it was the salesman asking when I could come down to pick up car.

Also, you'll probably get more for your trade to sell it but it is a hassle.

I have a Canyon and would have picked the ridgeline iit had been available when I bought.

Consider ordering a vehicle.. that way you can get exactly what you want and don't get stuck with paying for trim levels or packages that are on many on-the-lot vehicles... it also gives you some time to sell your trade while waiting for the car to arrive. We ordered our last two vehicles and in one case in the interim I sold my trade for more than what they dealer was going to give me.

Also inquire if there are any additional discounts for financing. It isn't unusual to get a $500 credit for financing... then pay off the loan after one or two payments and you're still ahead.

 

[travelover]

Can you get a trade in price quote from Carmax? That gives you a floor for trade in value.


The way I buy is to sell my old car privately and put dealers into a bidding war via email, so I never step into the dealership until I pick up the car. A new car is a commodity, unlike a used car where condition is variable.

 

[JP.mpls]

Ready,
This isn't the case. I would say that I hate the car buying process. Right up there with giving a presentation to a large group of people


The first vehicle was a good price on a leftover 2019 model, and it did have a few compromises that I wasn't sure if I wanted to accept. That probably stopped me from easily buckling over on the price difference.

I was intrigued that they didn't call me. I would have easily broke down and bought it at that time.
It is still on their lot.

The second vehicle just happened tonight, and I really want it. They took me by surprised with how much lower their trade in offer was. He claimed it was because of their great incentive prices.
They started $2k lower than the Honda dealer two weeks ago, and only came up $500.

Sales guy said different GM incentives coming out tomorrow. Price most likely going up.

Note: I bumped my trade in demands down three times, from 15k down to 13.735.

They are $1100 below the KBB trade in value if the car was only in " good "condition.

I'm hoping we come up with a deal on this second car. Was surprised it came down to a $200 showdown both times

JP

It sounds like a form of entertainment for you, or at least a bit of a game to chase the best deal. Or, you just didn’t really want to buy the truck so you passed on the deal over a few hundred dollars. It’s best to sell used cars privately but some don’t like to deal with the hassle. I always do and get better prices than wholesaling to the dealer.

 

[pb4uski]

Even they won't know what the July incentives are until tomorrow morning.

I once negotiated a deal and the car was delivered to the dealership while I was away on a business trip that i was returning Friday nght so I arranged to pick up the car on Saturday... which happened to be October 1. I got on line that Saturday morning and noticed that the manufacturer's incentives had changed from what they were... $500 to my benefit. I went to the dealership and informed them of the change in the incentives and said I thought I qualified... they were surprised but looked into it and said yes you are and amended the paperwork accordingly. Ca-ching!

 

[Qs Laptop]

You're doing great. You're holding your ground. You've already mastered one of the hardest aspects of negotiating--getting up and leaving if the deal isn't right.

You're not in a hurry, you have the advantage of time, which is huge.

How crowded were the dealers? That's a good clue as to whether or not they are hurting for sales.

You may need to go to a couple more dealers.

If you know the exact equipment packages you want you should be able to shop for your specific truck online. Most dealers will post the window sticker in the online listing for the vehicle. By checking the option list on the window sticker and once you find some trucks that are equipped to your specs, you can widen your dealership search, maybe to 50-100 miles. Call the dealer and rattle off the dealer's internal stock number and/or the VIN# and start negotiating. Any dealer will agree to deliver a vehicle to you. (They may want you to email them photos of your Civic so they can evaluate the trade.)

Get a price in writing. Presumably it will be better than what you got at the previous dealers you visited. Now go back to dealer #1, who had agreed to $15K trade in for your Civic, and try to get a better deal. Tell them you saw this truck at this out-of-town dealer (give them the VIN#) and explain that you want to give them a shot to beat the deal. The idea is to pit a couple of dealers against each other so they will vie for your business.

Good luck and have fun!

 

[427Vette]

You have way more patience then I do. I would have wrote the check out and moved on with my life to something I enjoy rather then squabble over a couple hundred bucks.

 

[JP.mpls]

Ckelly,
I was thinking the same thing, because I have some time.
I'm in the middle of rebuilding my old beater truck, and figured that I would wait until that is running.
This delay really isn't necessary. I could own three vehicles while I'm selling one.
I did have success selling an expensive used vehicle a few years ago.

Where did you read that used Civics are in demand? I was unsure about the used car market in general. If this is true, isn't it strange that the second dealer was so low with their offer, and so reluctant to budge a little to complete the sale?

Thanks for the suggestion.

JP

Walk into the same dealership without a trade, and see what they will do. You may be surprised at how much better of a price you will get for the truck. Of course this means that you will have to sell your car privately, but 18 Civics are a hot commodity right now, so it shouldn't be a problem.

I listed my 04 Mustang GT earlier today, and have somebody showing up with cash tomorrow morning. I would have given the car to a dealership on a trade deal.

 

[JP.mpls]

Pb4uski,
You wrote:
i think you are focused on the wrong thing... what they give you for your trade doesn't matter... it is the net, out the door price that matters... focus on that... the check you have to write (or loan amount).

What I'm running into is incentive sale prices that don't seem to be negotiable.
They list these prices on their website.

That leaves trade in value, and interest rates on a loan as the major negotiating points.

The only reason I had a loan on the civic, was 0.9% financing offers when I purchased.
I figured what the hell.

I think I should put in some effort to just sell my car.

Thanks, JP

 

[JP.mpls]

Qs,
Thanks for the encouragement.
I did use TrueCar to purchase the civic, and got a bunch of on line offers. Might try this again.

If I eliminate the trade, it makes the negotiating much easier.

I want a L71 model without any additional add ons. That is kind of a standard configuration.

You're doing great. You're holding your ground. You've already mastered one of the hardest aspects of negotiating--getting up and leaving if the deal isn't right.

You're not in a hurry, you have the advantage of time, which is huge.

How crowded were the dealers? That's a good clue as to whether or not they are hurting for sales.

You may need to go to a couple more dealers.

If you know the exact equipment packages you want you should be able to shop for your specific truck online. Most dealers will post the window sticker in the online listing for the vehicle. By checking the option list on the window sticker and once you find some trucks that are equipped to your specs, you can widen your dealership search, maybe to 50-100 miles. Call the dealer and rattle off the dealer's internal stock number and/or the VIN# and start negotiating. Any dealer will agree to deliver a vehicle to you. (They may want you to email them photos of your Civic so they can evaluate the trade.)

Get a price in writing. Presumably it will be better than what you got at the previous dealers you visited. Now go back to dealer #1, who had agreed to $15K trade in for your Civic, and try to get a better deal. Tell them you saw this truck at this out-of-town dealer (give them the VIN#) and explain that you want to give them a shot to beat the deal. The idea is to pit a couple of dealers against each other so they will vie for your business.

Good luck and have fun!

 

[JP.mpls]

427,
This is true.

On the second deal that I was more interested in, their trade in offer was easily low by $1500, not $250.

After negotiating we ended up $250 apart, and I was the one doing all the moving on price.

I could have moved again, and closed the deal. I got stubborn, and didn't do it.

Their manager obviously did the same.
Isn't he being greedy and stubborn to not close a $35k deal over $250? I'm an amateur, he is a pro. He was also easily a grand low on his trade offer.

JP

You have way more patience then I do. I would have wrote the check out and moved on with my life to something I enjoy rather then squabble over a couple hundred bucks.

 

[DrRoy]

Why don't you list the car for private sale?

 

[Ronstar]

As long as you don't need the truck right now, put the car up for sale yourself. Advertise in Autotrader.

Wait until it sells and then go buy the truck.

 

[RetireBy90]

We are looking at reworking the car situation here. We have 2 cars and a truck and want to get to one of each. I went to Carmax last week to get a quote for trade-in on our Rogue and wanted to test drive a couple models. We are looking for a 2-4 year old used Highlander. They gave us a real good quote on the rogue and it was painless. There were only about 15 customers but there was a 45 min wait to speak to a salesman so we could setup a test drive.

We also went to local Toyota dealer and his used car lot. Salesman said there were only a few vehicles in inventory. Only 4 Highlanders at a larger dealer. Also, they weren't doing test drives till you went through all but signing the purchase paperwork.

I can understand the need to sanitize after each test drive, but I'm not going to buy a used car without a test drive.

So, my take is that there is no real desire to sell a lot of used vehicles. I've read that there is a shortage of new and used vehicles right now, with new sales down due to closures of plants and customers worried about the virus. With new sales down, less used cars being traded in, and with less supply and demand returning prices are a bit high.



You could try Carmax as suggested. It took about 20 min to get a firm offer for our vehicle. They work best with newer vehicles so may work for your Honda.

 

[folivier]

How does your state handle sales tax on a trade-in? Here in Louisiana you pay tax on the sales price less the trade-in so it's in your benefit to get a high trade-in.
That said it's usually only a few hundred $ either way. I've always concentrated on the out the door price and told them to write it up any way they want but this is my price.
BTW $200 would not be enough for me to walk away if I like the car.

 

[pb4uski]

How does your state handle sales tax on a trade-in? Here in Louisiana you pay tax on the sales price less the trade-in so it's in your benefit to get a high trade-in. ...

And if you sold a car within a certain time period before or after buying the new car, you get to net the proceeds from the car sold from what you paid for the new car in calculating the sales tax. If you sell before buying the new car there is a form that you fill out and give to the dealer and the dealer reduces the price in calculating the sale tax. If you sell after you buy the new car you pay sales tax on the full price of the new car and send a return on the sale of the old car to the DMV and get a refund.

 

[braumeister]

And if you sold a car within a certain time period before or after buying the new car, you get to net the proceeds from the car sold from what you paid for the new car in calculating the sales tax.

Consider yourself lucky. That rule sure doesn't apply in my state. Sales tax is on the full price of the new car, period.

 

[street]

^ yep, sales tax applies here also.

 

[street]

As far as getting a deal you are happy with, I'm no help. I can add to your choices of trucks and that is, I have a Colorado and is the ranch truck and is worked hard in tough conditions year around. It has 160K on it and has been a great outfit and work horse for me. I do everything with that truck that I would do with my full size trucks.

Good luck in your choice.

 

[The Cosmic Avenger]

i think you are focused on the wrong thing... what they give you for your trade doesn't matter... it is the net, out the door price that matters... focus on that... the check you have to write (or loan amount).

pb4uski had a lot of good advice, but this sums it all up perfectly. Read up on the 4 square con game that dealers play, they will basically hook you by making one term more attractive....which they then compensate for by padding their profit somewhere else.

What I do is choose a particular model and trimline option, and then request quotes online from about a dozen dealers. Back in the pre-internet days, I'd call and say I am ready to buy, I want an out-the-door price quote good for the next X days, and I'll be buying from whomever gives me the lowest quote and follows through on it. If they won't give me a price without me coming to the showroom, they don't get my business. If they say they need to check with their manager, they can call back and leave a message with my quote, but I'll be moving ahead with my purchase in X days.

Basically, all this forced them to do what a few dealerships now do for all sales: offer a no-haggle price, preferably with a small, set, disclosed markup over their dealer invoice price. If you can find the dealer invoice price (it shouldn't be hard), quote them that, and aim for about 3-5% over cost, although generally anything close to 5% is usually pretty good.

 

[finnski1]

Qs,
Thanks for the encouragement.
I did use TrueCar to purchase the civic, and got a bunch of on line offers. Might try this again.

If I eliminate the trade, it makes the negotiating much easier.

I want a L71 model without any additional add ons. That is kind of a standard configuration.

I sold a car in march to Carvana on line and it was the most painless sale I have ever done. You enter the vin #, mileage, condition, color etc and they give you a quote within an hour.
They show up in your driveway with a car transporter and check in hand and off they go.
I also was able to sell it to them for only $14-1500 less than dealers were asking for them (as a starting price ) on their websites/lots.
So I didn't have to list it, didn't have to deal with people trying to get a loan and backing out etc

It was a 2019 Subaru Outback that I paid $24500 for and Carvana gave me $22400 for. Interestingly it looks like hey sold it for $25900 used when I only paid the $24500 new. I guess people are willing to pay a premium for convenience as they deliver it to your door when you buy it online.They also have a 7 day money back trial period

Considering I had it for 10 months and put 8000 miles on it I consider that making out pretty good considering all the stories you hear about the 20% or more depreciation you get when driving a new car off the lot.
I will admit however to getting a great deal on it when new because subaru has redesigned the Outback for 2020 and they were giving great deals on the 2019's at that time.


Bottom line its worth checking out and shows that although I would never buy from them for their elevated prices, I gladly sold to them for the same reasons.

 

[OldShooter]

... I'm not a strong negotiator ...

I disagree. You are better than probably 90% of the people the dealer sees. You understand one of the most important rules of negotiating: If you're not willing to leave the table, you're not negotiating. You're begging.

That said, I agree with @pb4 that the details of trade-in, etc. don't matter. The only thing that matters is the bottom line, the check you'll write at the end. Truck price, trade-in, doc fees, etc., whatever is in the calculation is a don't-care.

Another thought: Why new? You could take a nice vacation or enjoy 52 expensive dinners with good wine for the amount of depreciation you'll probably eat during your first year of ownership. Buy a year or two old and used or at least search the dealers for a truck that is one model year old but still on their lot. Then they eat most of the depreciation.

... Another gotcha is the doc fee. They'll bullshit you that is it required by law or some other rubbish or that they have no latitude and it is required and preprinted on their documents. All bull. It is just an administrative processing fee for them to do their paperwork. ...

Really it's not. It is simply additional dealer profit. As I am refusing to pay the fee I often get: "But that's a real cost. It costs us money to process that paperwork." My response is always the same: "Sure it costs you money to handle the docs. I agree completely. But it also costs the dealership to stripe the parking lot, to pay the electricity bill, and to pay your salary. There is nothing at all special about pushing the paper that would justify this kind of last minute charge." Then the F&I guy splutters a little bit and I add: "Just give me the paperwork. I'll take it to the DMV." That, of course, is a non-starter but it is frequently on the path to the ultimate end where they capitulate.

Edit: I did have a manager tell me one time that the doc fee was required by law. I said: "May I see a copy of that law, please?" That pretty much took the air out of his sails. I think there are state laws that limit doc fees, but that doesn't make them required.

General observation from buying a couple of cars recently: I think the publishing of prices on the internet has forced the dealers to offer lower starting prices and to advertise "no negotiation, best price always." If they don't look competitive on their web sites, they won't get any inquiries. This trend takes some of the fun out of the game, though.

 

[finnski1]

I disagree. You are better than probably 90% of the people the dealer sees. You understand one of the most important rules of negotiating: If you're not willing to leave the table, you're not negotiating. You're begging.

That said, I agree with @pb4 that the details of trade-in, etc. don't matter. The only thing that matters is the bottom line, the check you'll write at the end. Truck price, trade-in, doc fees, etc., whatever is in the calculation is a don't-care.

Another thought: Why new? You could take a nice vacation or enjoy 52 expensive dinners with good wine for the amount of depreciation you'll probably eat during your first year of ownership. Buy a year or two old and used or at least search the dealers for a truck that is one model year old but still on their lot. Then they eat most of the depreciation.

Really it's not. It is simply additional dealer profit. As I am refusing to pay the fee I often get: "But that's a real cost. It costs us money to process that paperwork." My response is always the same: "Sure it costs you money to handle the docs. I agree completely. But it also costs the dealership to stripe the parking lot, to pay the electricity bill, and to pay your salary. There is nothing at all special about pushing the paper that would justify this kind of last minute charge." Then the F&I guy splutters a little bit and I add: "Just give me the paperwork. I'll take it to the DMV." That, of course, is a non-starter but it is frequently on the path to the ultimate end where they capitulate.


General observation from buying a couple of cars recently: I think the publishing of prices on the internet has forced the dealers to offer lower starting prices and to advertise "no negotiation, best price always." If they don't look competitive on their web sites, they won't get any inquiries. This trend takes some of the fun out of the game, though.

It does take some of the fun out doesn't it. Although I admit I am one of those who likes to bargain hard with automobiles and enjoy most of the process except the initial visit to a dealer to test drive where they want to sit you down and keep you there a bit with all there silly routine questions.