Helping a friend with car purchase fiasco

[WanderALot]

Hello,

My wife's friend is in a self-inflicted bind. She went to a dealership earlier this week and somehow got convinced into a signing a purchase agreement for a car. She told me that she was interested in a particular model (Mazda 6) but the dealership didn't have the color she wanted. The "president" of the dealership said that if she really was interested in purchasing a car they can get the car from another dealer about 30 miles away, but they want her to sign a purchase agreement. They also told her that if she changed her mind, they would just "tear up" the agreement. She still hasn't taken delivery of the car yet, but has been playing phone tag with the dealership (although one of the salespeople called to ask her about her car that she had "purchased").

She is now having second thoughts about the price (but not about the car) so she is wondering if she can "bargain" the price down a bit. The issue is that she is not completely sure if she bought the car (!). :
I took a look at the purchase agreement that she signed and it does mention a recindsion clause, but that only looks like it can invoked with the seller's permission. But it does say that the seller has to deliver the car on the day the contract is signed which didn't happen.

California doesn't have a 3-day cooling period for car purchases. The purchase agreement looks like the standard agreement that everyone signs, it has the financing terms, purchase price, tax+license, monthly payments, document prep fee etc..

The last time I was involved in a new car purchase was about 7 years ago, but I seem to remember that there was a bunch of other documents to sign besides the purchase agreement, but she didn't sign anything else. So, the question is, is she legally bound by this agreement? My guess is that she's hosed.

Thanks.

p.s. How does one go about finding a "good price" for a new car these days? Back when I purchased my car, the dealers knew nothing about the Internet so I was able to shop around easier. It looks like she paid a few hundred above the invoice price for the Mazda 6 and then got a $3000 manufacturer's rebate as the down payment. The thing that bothers me is that she didn't negotiate at all!

 

[Olav23]

I am sorry I can't help on your question, but was thinking you might want to post this as well to the Edmunds forums, where you might get more responses, and even by some dealers:

http://townhall-talk.edmunds.com/direct/view/.ef14c39/ed_displayMakeTopicIndex

(Just to hedge your bet and get more responses at least!)

Good luck!

 

[TromboneAl]

I'd say that she can tell them that since they didn't deliver the car,  she wants to tear up the agreement and start over.  If she hasn't given them any money, they'd have a real hard time doing anything about that.

I did a lot of research on negotiating car prices (use Google), and went through the whole procedure with the local dealer when buying our Echo.  It worked, and we got a low price, but it wasn't worth it.  Also, they agreed to a price, but when the car was delivered 4 months later, they wanted more.   Had to threaten letters to the local paper, etc.   Yuck.

I will never buy a new car again.

 

[JPatrick]

Sounds like you want the car , but maybe not the deal.
At edmunds.com you can compute what they call the fair market value (FMV) of any new car.  This will give you an idea of a decent ballpark price.
As far as the contract goes, I'd start by being upfront with the dealer.  Just tell them your don't feel you got a good price (be ready to tell them what you want) and that you might want to cancel the deal.  If nothing else you'll find out their attitude towards the deal.

 

[JPatrick]

Sounds like you want the car , but maybe not the deal.
At edmunds.com you can compute what they call the fair market value (FMV) of any new car.  This will give you an idea of a decent ballpark price.
As far as the contract goes, I'd start by being upfront with the dealer.  Just tell them your don't feel you got a good price (be ready to tell them what you want) and that you might want to cancel the deal.  If nothing else you'll find out their attitude towards the deal.

Ya, as AL says, the issue of late delivery may be your strongest chip.

 

[maddythebeagle]

I agree with Al. I have bought 1 new vehicle but got "employee discount pricing" since my mom worked at the company that owned the dealership, but I now wouldnt buy new even with the discounts based on the strong discussion on these boards and understanding the depreciation issue.

It seems like she will simply have to walk away from the deal since they know she wants the car (and will be at a weakness to negotiate). Why not go to that "other dealership" and negotiate with them now that she has the info.

 

[sgeeeee]

I think this is a no-brainer.  They don't have a dime of her money.  As long as she doesn't give them one, they are hard-pressed to do anything.  They would have to go to court to enforce the purchase agreement.  Since this would be expensive, would possibly involve negative press,  the document is of questionable legal value, and since they have already broken the agreement themselves . . . I just can't see them doing this.  I doubt that they would actually go to the trouble of trying to enforce a purchase agreement even if they hadn't broken the terms.

I would simply go to the dealer and tell them the deal I wanted.  I would let the dealer know that I was only going to consider two options:  1) I buy the car at the deal I want, or 2) I walk away from the deal and leave them with the car and their worthless purchase agreement.   When you hold the money, you are in a strong negotiating position.  Just make sure you don't give them money before you try to negotiate.  

 

[SteveR]

Agree with SG.


I have bought 4 cars without haggling at all. I got my best price (fair value for me and dealer) through the Internet Manager for the dealerships. You send and email to the dealership Internet salesman and he gives you a price for the exact vehicle you want a quote on. If he is too high you tell him you won't pay that and then go to another dealership via the internet. Once you find one that will give you a decent quote you make an appointment to see this salesman (and avoid the other sharks cruising for fresh meat) and you make the deal. He gets the car if it is not in stock and you do the paperwork. You tell him you don't want all the extra dealer charges, no extra wax or seat surface treatments, etc. or the deal is off. No extra fees other than what you have both agreed to. If any of it stinks, you tell him and if he does not respond with a really good explanation, you walk and go else where.

I have saved a lot on this but don't expect to get a "Hot" car with much of a discount. They can sell it to anybody for what they are asking for it so there is no incentive for them to deal with you at a lower price.

Good luck.

 

[Texas Proud]

It is an interesting question, but the document means nothing....

First, a contract needs to be signed by both parties with consideration. You did not say if it was signed by the dealership or if she put money down.... second (and I found this out on one of my attempted purchases) they can back out of the deal if THEY do not like it, even if they signed... (I was told it was signed by someone who has not legal right to sign etc...)

There are a lot of things that must be signed to have a deal... she does not have one negotiate away.

Just a suggestion, look up what the 'market' is, take a few hundred off and say I will pay you THIS for the car... do not go up.. do not agree with add ons, extended warranty etc etc (OR FEES!!)... if they do not agree, be prepared to walk out and go buy some other car or at a different dealer. If you give them a 'fair' price they will eventually take it to get the sale.

 

[73ss454]

Texas Proud
Why would you say not to get the extended warranty?

 

[TromboneAl]

The extended warranties usually aren't worth it.

Here's an article about them.

Of course, in my case it would have been a good idea because my Echo's transmission needed replacing 2,000 miles after the warranty expired (but Toyota paid half anyway).

But, if I add up all the money I've saved over the years by not buying extended warranties (on computers, electronics), it would more than cover the transmission cost.

 

[Mr._johngalt]

I think this is a no-brainer.  They don't have a dime of her money.  As long as she doesn't give them one, they are hard-pressed to do anything.  They would have to go to court to enforce the purchase agreement.  Since this would be expensive, would possibly involve negative press,  the document is of questionable legal value, and since they have already broken the agreement themselves . . . I just can't see them doing this.  I doubt that they would actually go to the trouble of trying to enforce a purchase agreement even if they hadn't broken the terms.

I would simply go to the dealer and tell them the deal I wanted.  I would let the dealer know that I was only going to consider two options:  1) I buy the car at the deal I want, or 2) I walk away from the deal and leave them with the car and their worthless purchase agreement.   When you hold the money, you are in a strong negotiating position.  Just make sure you don't give them money before you try to negotiate.  

John Galt's first rule of negotiating (derived from Murphy's Golden Rule):
The person holding the money sets the rules.

JG

 

[TromboneAl]

Another thing I've found about negotiating is that if the dealer (or other person) hasn't invested much time in you, they're more likely willing to let you walk away. If, on the other hand, you've had a few test drives, spent some time talking, talked on the phone, and otherwise wasted their time, they'll be less likely to give up on you.

 

[73ss454]

Al,
I agree that buying warranties on appliances with only a few moving parts is not a good idea.
But any time I buy a new car and have the opportunity to get the manufacturer's extended warranty I buy it.
I will not buy a warranty on a car from an insurance company.
Last I read, cars have about 14000 moving parts. Only a matter of time with all the crap on cars today and labor rates at about 100 an hour.
Just my oppinion.
Regards

 

[Nords]

But any time I buy a new car and have the opportunity to get the manufacturer's extended warranty I buy it.

If thousands of dollars are wasted by buying a new car instead of a used one, then what's a few hundred more for an extended warranty?

But the only BIG car repair that's bitten us in two decades of ownership is $3000 to rebuild the Taurus' transmission. (I think the company used military surplus tank parts.) I've never paid for an extended warranty so I don't know how that cost compares with the transmission rebuild, but the transmission is probably going to outlast the rest of the car. (Hey, I wonder if we could sell it back to the repair company when we junk the Taurus?)

 

[Texas Proud]

Texas Proud
Why would you say not to get the extended warranty?

The newer cars are not like your 454 SS.... which requires weekly maintenance (at least my friends 396 did)..

The new cars, even the ones from domestics, are so much better built. Most have a 3 year warrenty that covers most everything from defect (not neglect or abuse)... so, if you buy one you are usually only getting 2 more years at a high price per year. Most all the money is profit wth very little paid to get things fixed.

Most of the time when things start to break now is after 7 years and 100,000 miles...

Let me give an example... I have a 95 Monte Carlo. The only thing that has gone bad is the alternator twice and then a half shaft seal (which was caused by replacing the alternator)... no extended warranty would cover a car this old.

 

[73ss454]

Texas
I like the piece of mind of have the extended warranty.  I have used them before and for another 10 or 15 bucks a month, what the hell.
If I lose a transmission at about 45K will you come over and help me put in another one?
Labor in NY is about 102 an hour so it adds up very fast.
Can some one tell me why it's a bad thing for a car dealer to make profit.
Every one else makes profit when they sell an item or preform a service. 
I see it all the time "don't buy the extended warranty because the dealer makes profit".
Last time I looked in front of a dealer I didn't see a Cross or a Steeple.  I don't think car dealers are a non profit organization.
Just my opinion.
JOE

 

[REWahoo]

Can some one tell me why it's a bad thing for a car dealer to make profit.

If you took a poll (DanTien, don't go there), I suspect most people don't have an objection to an auto dealer making a profit....as long as it is on someone else.

REW

 

[maddythebeagle]

There are actually A LOT of folks on these boards that wouldnt even consider buying a NEW car so I say the ones that do want a new car, please pay as much as you can because car dealers are people, and want to FIRE, too. 

I actually wouldnt say that I trust non-profits either, so bad analogy.

 

[Danny]

If you took a poll (DanTien, don't go there), I suspect most people don't have an objection to an auto dealer making a profit....as long as it is on someone else.

REW

 

[73ss454]

Well, I guess that's why I'm still working.
I also like to buy a manufactures warranty on used cars when I buy them.

 

[Texas Proud]

Texas
I like the piece of mind of have the extended warranty.  I have used them before and for another 10 or 15 bucks a month, what the hell.
If I lose a transmission at about 45K will you come over and help me put in another one?
Labor in NY is about 102 an hour so it adds up very fast.
Can some one tell me why it's a bad thing for a car dealer to make profit.
Every one else makes profit when they sell an item or preform a service. 
I see it all the time "don't buy the extended warranty because the dealer makes profit".
Last time I looked in front of a dealer I didn't see a Cross or a Steeple.  I don't think car dealers are a non profit organization.
Just my opinion.
JOE

If it gives you piece of mind, then purchase it. It is an insurance policy like any other insurance policy. I am not against the dealership making a profit, just an obscene profit. I have heard that the extended warranty profit is in the 70% to 90% range. So, paying $1,500 for an extended warranty that "should" sell for about $500 is a ripe-off. Again, very few people will have to use their insurance policy and over time you will be losing money.

A question back to you... how many cars have you replaced a transmission in the extended warranty period? The only time I needed a major repair like that was at 120,000 miles... Or, how many times have you had any major repair in the warranty period? And what would it have cost you to fix if you did not have the warranty?

 

[Texas Proud]

  I don't think car dealers are a non profit organization.
Just my opinion.
JOE

Opps... forgot to say... they are not 'non profit organizations'... they are tax exempt organizations... most make a very good profit.. look at the churches and hospitals who make millions

 

[greg]

Can some one tell me why it's a bad thing for a car dealer to make profit.

I think everyone understands the idea of profit, making a living. What bothers me about car dealers is the greasiness involved in the process: First, they attempt to tell you it's the nicest vehicle in the world, e.g. only driven to the liquor store on Saturday nites by a little old lady. Second, the fact that you can never pin them down on a straightforward deal where the salesman doesn't do add ons at the closing or other mental games during the process. Third, everything else that's hidden from view.

Add in all the other factors such as the greasiness of trying not to appear greasy and you end up feeling . . . um . . . not so good as a buyer.

It's kind of like buying annuities or services from a financial planner. A straight, honest deal would be appreciated, but because these markets are so tainted today, the only people who tend to survive at these selling games are the less than honest ones. Even Consumer Reports can only peel back one, maybe two, layers. Every smart buyer walks into the process tense and on guard, looking for what's hidden--not a good experience.



--Greg

 

[73ss454]

Greg,
Why don't you just walk in and pay list price.  This way you don't have to haggle and get yourself all upset.
You should be able to get enough info from the internet to make a reasonable decision. 
Who do you think sells cars?   I don't think any of them have MBA's.
Sorry to hear they get you so confused.
Regards,
JOE