How To Buy A New Car

[ERD50]

Thanks for the update. Looks like you gained considerable savings with only a few hours work. Nice.

Did everyone you dealt with have the exact car you wanted in stock (or able to get it in a few days)? I'm picturing them trying to obfuscate the deal by saying they have this or that similar car, making comparison a bit more difficult.

-ERD50

 

[donheff]

Midpack- do you have to physically show up at the Costco dealer to see the price or can you specify a car in their inventory and get the price on that one over the phone?

 

[Texas Proud]

Thanks for the update. Looks like you gained considerable savings with only a few hours work. Nice.

Did everyone you dealt with have the exact car you wanted in stock (or able to get it in a few days)? I'm picturing them trying to obfuscate the deal by saying they have this or that similar car, making comparison a bit more difficult.

-ERD50

When I was looking for my sister, almost all did the obfuscation... I had looked and found a total of 2 cars that met what my sister wanted in color and options in the state of Texas... but I got many offers to sell the exact car she wanted.... some even linking to the dealer that had it in inventory...


Now, funny thing is that one of the dealers that had one was the closest to us and in the end offered us the cheapest price... when we went in to buy they had sold it the night before!!! Well, they sent someone up to north of Dallas to drive the second one down and sold us that one... still got the best price and we did not have to go get it either.....

 

[rayvt]

Now, funny thing is that one of the dealers that had one was the closest to us and in the end offered us the cheapest price... when we went in to buy they had sold it the night before!!! Well, they sent someone up to north of Dallas to drive the second one down and sold us that one... still got the best price and we did not have to go get it either.....

Funny, the same thing happened to me. The dealer had 2 on the lot, the only difference was in the color. You can't pick colors on the computer, you have to see it in person, so we told him we'd come over the next day (Saturday) to select the one we wanted.

When we got there, our salesman went to show us the cars, and LO! both of them got sold last night. I figured we were in for the old song-and-dance bait-and-switch. But no, he said, "Don't worry, we'll get one from another dealer, it'll just take a day or two. And we'll honor the price we gave you over the phone."

Car dealers sure have changed over the last several decades.

 

[W2R]

I bought a loaded Subaru Outback Touring

Nice choice!

 

[LOL!]

FWIW I bought a new car this morning ....

You don’t see the Costco price until you go to the dealer and pick a car. The Costco price was $3318 below MSRP. Not bad, and probably a good way to go if you’re averse to haggling - I’m not. Another benefit of the Costco approach, I’ll get “15% off parts, service and accessories for any household vehicle at participating service centers nationwide.” But as you’ll see, haggling pays...

After a few hours, I ended up signing at $4900 under MSRP ....

Congrats and hope you enjoy your new ride!

I was thinking about an Outback 3.6R limited last week and was curious about prices. I used the USAA / Truecar buying service to request prices. I got e-mails within seconds and then phone calls from the internet desk of every local dealership. All offered about $3200 to $3500 off of MSRP what they had on the lot as their first number. And all told me about their amazing deals and 0% interest rates.

I didn't buy any car in the end.

 

[Midpack]

Thanks for the update. Looks like you gained considerable savings with only a few hours work. Nice.

Did everyone you dealt with have the exact car you wanted in stock (or able to get it in a few days)? I'm picturing them trying to obfuscate the deal by saying they have this or that similar car, making comparison a bit more difficult.

-ERD50

The car I bought was at a dealer 90 miles away, but dealer trades are very common as I understand it, almost no barrier at all. I signed the deal around noon, the car was at my dealer by dinnertime, and I took delivery 10:30am next day. Happens all the time from what I’m told.

Interesting a dealer much closer had the exact same car, but gave the dealer I was at the run around. They assume (prob right) that the buyer will just come to the other nearby dealer if they stall the dealer trade. So a dealer a little further away may cooperate more easily.

Midpack- do you have to physically show up at the Costco dealer to see the price or can you specify a car in their inventory and get the price on that one over the phone?

Nope, you request from Costco online, but it’s my understanding you must go to the dealer, pick out a car and the dealer will show you MSRP, invoice and their hold back. Of course those numbers are all pretty meaningless these days, as you probably know.

You’re under no obligation to buy, and you can beat the Costco deal on the right car, so there was no downside to starting with the Costco price at that dealer. You also get 15% of parts, service and accessories thereafter and a 6 month coupon for 50% off parts up to $200 (so ideally you’d spend $400 on parts) by using Costco - worth it to me.

Again, I showed up the Costco dealer with huge discounts from three other dealers in my back pocket that I obtained from Edmunds the night before. All three called me within minutes, I deliberately didn’t answer. A couple minutes later I had emails from all three dealers offering discounts of -$500, -$2703, -$4700, -$4881 and -$4999 on cars in their inventory that fit my criteria [I bought a loaded car, so discounts will be greater than a more basic model]. So I showed up at dealer #1 well armed, and it went pretty smooth. They showed me the Costco price and of course said there was no way they could do better. So I told them I’d look at other dealers, and showed them the three big discounts (but didn’t allow them to copy) and we reached a deal pretty easily.

It’s not as hard as many people think. You only have to be prepared, show them you’re ready to buy, and politely stand your ground. There’s no confrontation required at all, you won’t get the best deal by arguing, you just have be patient, ready to walk if they’re not cooperating. If they know you’re a real buyer, they’ll follow up quickly. I’ve led the buying process for several friends and family too who ‘hate haggling’, it’s not hard to get a great deal...

 

[Hermit]

I wonder how this approach would work on a new heavy duty truck that has to be ordered through the fleet guy because he is the only guy that has a clue on ordering that kind of vehicle? (I found this to be the case with Ford, Chevy, & Dodge.)

 

[Out of Steam]

I've bought new cars about every 7-10 years, with one exception, since my 20s.

One of my goals for retirement is to buy off-lease or late-model used instead, figuring I will have more time to shop and fewer miles driven. I've been a long-haul commuter for about 10 years, so the fewer miles should work out even with personal travel.

 

[pb4uski]

For years I bought only "gently used" cars... about 12-18 months old with some mfg bumper-to-bumper warranty left... for years they were attractively priced compared to new. However, since 2006 or so the significant discount evaporated... there was still a discount but not enough for me to justify buying used instead of new.... in fact the last two new cars we bought we ordered so we could get the colors and trim and equipment that we wanted and valued but avoid the packages and features that the dealers load up the cars on the lot with that we don't value.

Trucks are the worst... when I was looking to replace my truck I looked at several used trucks that I was interested in but the prices were so close to new it wasn't worth buying used.

 

[Finance Dave]

For years I bought only "gently used" cars... about 12-18 months old with some mfg bumper-to-bumper warranty left... for years they were attractively priced compared to new. However, since 2006 or so the significant discount evaporated... there was still a discount but not enough for me to justify buying used instead of new.... in fact the last two new cars we bought we ordered so we could get the colors and trim and equipment that we wanted and valued but avoid the packages and features that the dealers load up the cars on the lot with that we don't value.

Trucks are the worst... when I was looking to replace my truck I looked at several used trucks that I was interested in but the prices were so close to new it wasn't worth buying used.

Tell me about it lol. For about 6 months I looked for a used truck. I wanted something reliable with less than 50,000 miles on it...and was hoping to spend around $14k. Anything that met my criteria was selling for $20-$30k!

Partly this is because nearly everyone gets all the "bells and whistles" when they get a truck, but I just wanted a work truck with a large bed.

I ended up buying new. I got a 2016 F150 brand new for $26,400. It's a standard cab with the 8' bed. The only two options I got were power windows/locks and a rear bumper step (because I'm getting old lol). It's very basic...even has rubber floor, no carpet lol.

I'm wondering when I go to sell this in 4-5 years after I stop doing my own work on my rentals whether I'll get back the $26k I paid for it.

 

[Texas Proud]

For years I bought only "gently used" cars... about 12-18 months old with some mfg bumper-to-bumper warranty left... for years they were attractively priced compared to new. However, since 2006 or so the significant discount evaporated... there was still a discount but not enough for me to justify buying used instead of new.... in fact the last two new cars we bought we ordered so we could get the colors and trim and equipment that we wanted and valued but avoid the packages and features that the dealers load up the cars on the lot with that we don't value.

Trucks are the worst... when I was looking to replace my truck I looked at several used trucks that I was interested in but the prices were so close to new it wasn't worth buying used.

Just a note on this.... when we bought our new Pilot a few years ago we got a good deal as it was end of model, a new model coming out and it had been sitting for a few months...

About 6 months later I was looking at some used ones online and they were listed at more than what we paid and already had 20K miles!!! Sometimes new is cheaper...

 

[Midpack]

Just a note on this.... when we bought our new Pilot a few years ago we got a good deal as it was end of model, a new model coming out and it had been sitting for a few months...

About 6 months later I was looking at some used ones online and they were listed at more than what we paid and already had 20K miles!!! Sometimes new is cheaper...

It’s unusual, but it can happen. Long ago when the Chrysler minivan first came out and had few competitors, lightly used ones (1-2 yo) were going for $1-2K more than their original MSRP. There are other examples from time to time, and it’s not as uncommon for some exotics or classics.

 

[rayvt]

you won’t get the best deal by arguing, you just have be patient
... ready to walk ...

I don't think you can get anywhere by arguing. They are well experienced at this, they negotiate with buyers a half-dozen time a day, they know all the tricks. As the saying goes, you can't BS a BS'er.

... ready to walk ...

This is the key! You have to offer a reasonable price, of course. All this was laid out in an old book titled "The Art of the Deal". Be patient. Be willing to walk away from a deal you don't like.

I once got an interesting tidbit from a car dealer (the big boss, not the floor salesman). He said that they get pretty good at reading buyers and they can tell when somebody is getting ready to walk away.

That was after he showed me that (purportedly) the dealer only made $50 on the car. I asked him why they sold it for only $50 profit, that's when he said they knew it was that or I'd walk.

If they know you’re a real buyer...

Evidently, according to what one told me, quite a few people visit a car dealer just to pass the time and to have something to do. And maybe to grab a free hot-dog and popcorn, They aren't there to buy a car--and they don't.

Ever since then, we always tell the salesman, "We plan to buy a car today or this weekend. If it's from you, great. But we will be buying a car ... from somebody."

 

[Car-Guy]

Just bought a new car in January. Negotiated the price of the new car and my trade on line over about 3 days of trading 4 or 5 emails and 1 phone call with the salesman. I could see the windows sticker of the car on line that I was buying and the dealer sent me pictures so I could see the vehicle. I described my trade in about a paragraph and sent him the VIN#. I was able to get a top dollar offer on my trade and about 5% off the window sticker, all on line, which I was happy with since it was a 6 figure car with very limited availability. The deal went as we agreed to on line, no surprises for me or the dealer.

So it can be done.

 

[Senator]

I wonder how this approach would work on a new heavy duty truck that has to be ordered through the fleet guy because he is the only guy that has a clue on ordering that kind of vehicle? (I found this to be the case with Ford, Chevy, & Dodge.)

I purchased a 2017 Ford F350 for $800 under invoice (6.7% off) on a $78K MSRP truck. I received all rebates, including a $750 financing incentive, $750 private cash offer, $500 AQHA rebate, and a $1500 customer cash bonus. I did NOT have a trade in. I sold my old truck outright. All in all, I got 8.9% off MSRP. After that I got another $1,849 in dealer money I had from service I had completed at the dealer to make it ~14% off MSRP.

I sent an email requesting bids to 5 different dealers with my truck and options I wanted, and included the option codes. They all replied under invoice prices.

X-plan is basically invoice, which is what a fleet dealer may give. I may have been able to squeeze the dealer a bit more, but they need to make money too.

 

[brucethebroker]

That's a lot of calls to make during the work week. Only works if you are retired or "work" at a job that would allow you to make so many personal calls during the work day.

That is true, and The Millionaire Next Door book actually spends a bit of time discussing why this is not the best use of time for many of the working wealthy.

However, I think the streamlined versions mentioned are well thought out and fairly easy to complete online. After the initial "round", you are really only replying to a few emails, which should not be a problem during breaks at the office.

In the late 80's when Chrysler Mini-vans were the hot item, I could not get a single dealer in a good sized Midwest city to play ball with me. "Here is our price-take it and the colors we have, or leave it." My brother fired up his Compaq computer and found a dealer in Detroit (this was almost unheard of back then-using a computer to find cars). I had a choice of colors, and the dealer even came down about $500. The flight to Detroit was about $50, and I drove my new van home. I was feeling quite smug about sticking it to the local dealers. BTW, I never had a problem getting warranty work done locally.

Since then I have flown into to 2 other cities for the same reason. Works well for me.

 

[GTFan]

Trucks are the worst... when I was looking to replace my truck I looked at several used trucks that I was interested in but the prices were so close to new it wasn't worth buying used.

Got to agree there, there's little reason to buy a 1-2 year old used truck now given the crazy demand for them. For the recently updated midsize trucks, that is - Colorado/Canyon, Tacoma, and Ridgeline. And if you want fullsize you get much better discounts off of MSRP for anything that's decently equipped.

 

[GTFan]

Just a note on this.... when we bought our new Pilot a few years ago we got a good deal as it was end of model, a new model coming out and it had been sitting for a few months...

About 6 months later I was looking at some used ones online and they were listed at more than what we paid and already had 20K miles!!! Sometimes new is cheaper...

For Hondas, Toyotas etc. sure, there's not much reason to go used. But domestic makes, Korean cars etc. are dirt-cheap used and there's still little reason to buy new in my book if you're willing to look around vs. going with what's popular (trucks are an exception).

So supply and demand and perceived reliability, build quality etc. drives all the resale value, but there's plenty of steals today for less-popular stuff in the gently used market. I see them in Carguru's website and app all the time.

 

[Midpack]

Ever since then, we always tell the salesman, "We plan to buy a car today or this weekend. If it's from you, great. But we will be buying a car ... from somebody."

+1. I showed up with a clean trade in (inside and out), our signed title, a blank check and email quotes from other dealers. And when they stalled, I politely said I’d shop other dealers and come back if another dealer didn’t beat their deal, I would not accept a match or $100 off at another dealer - that would be dirty pool to me.

Like you say, if you want the best deal, you have to make it very apparent you’re ready to buy immediately, or walk if necessary. If you’re vague about your intentions, you will NOT hear their best offer. And I’ve never had to argue or get nasty, that is counterproductive, and no fun. Even though I enjoy dealing on cars, I don’t enjoy confrontation any more than anyone else...

 

[golfnut]

Back in 2016, a buddy of mine asked me to go along with him to some car dealers. He was in the market for a new suv.

First stop was a Honda dealer looking at the Pilot. When asked about knocking off a few dollars off the list, the salesman bluntly told us they sell Pilots at list and they only had 3 on the lot. Found this to be refreshing in that he did not waste our time.

Next went to a Toyota dealer looking at the Highlander. After a little back and forth, the manager agreed to sell at invoice. When all was said and done, he actually knocked $200 off the the invoice. My buddy ended up buying it.

 

[W2R]

And I’ve never had to argue or get nasty, that is counterproductive, and no fun.

A person would have to have a screw loose (IMO) to argue or get nasty when negotiating for a car or anything else. The buyer has the cash, cash is king, and the buyer can simply walk if things are not perfect. The car dealership or seller knows this, and the buyer knows this too. The buyer is already in the position of power and arguing about it is just insane. It's just business.

 

[Midpack]

A person would have to have a screw loose (IMO) to argue or get nasty when negotiating for a car or anything else. The buyer has the cash, cash is king, and the buyer can simply walk if things are not perfect. The car dealership or seller knows this, and the buyer knows this too. The buyer is already in the position of power and arguing about it is just insane. It's just business.

Agreed. I just know lots of people say they hate haggling over cars, and I assume it’s because they think confrontation is part of successful negotiation with a car salesman. Or being misled by the salesman, leaving money on the table, or all three. Maybe my confrontation assumption is mostly off base, wouldn’t be the first time...

 

[Texas Proud]

Agreed. I just know lots of people say they hate haggling over cars, and I assume it’s because they think confrontation is part of successful negotiation with a car salesman. Or being misled by the salesman, leaving money on the table, or all three. Maybe my confrontation assumption is mostly off base, wouldn’t be the first time...

When I was younger I did argue with a car salesman a few times... mostly when they told me a flat out lie...

I have grown older and wiser... willing to move on... however, IMO the industry is filled with people who do lie so they can make more money...


BTW, we all know that a dealership makes LOTS of money... many years ago an owner of different dealerships owned the Houston Rockets... others also owned a few expensive items... and I actually did the tax return of a BMW dealership when I worked at a big accounting firm... so I know they are not in poverty as them seem to make it seem when they sell you a car... 'Oh, you stole this car from us. I am not making anything on it'....suuuuure......

 

[aja8888]

The BMW dealer in our town just completed a recent facility remodel. It was so nice and modern and a big expansion in size, you would think Exxon or a major hospital paid the refurbishment costs. Yeah, even when you get a "good deal" on a car, they are getting one off you too.