Thanks to all you folks, this thread helped me save about $5200 off MSRP on a new car! And it made it a lot less painful than it has been for me in the past.
Maybe I should send you the $5200 in consulting fees? Ha! Ha!
I have been retired for 3 ½ years, spending 1.5% of portfolio a year, and driving around a 2003 Toyota Corolla. The Corolla served me well. I paid it off quickly, it was less car than I could have bought, it was very reliable, and I invested the money saved for early retirement. I wanted a better car, wanted something more reliable on a long vacation trip than a 15 year old car, and used the advice in this thread to help save money. At 63, I figured this was our time to enjoy a nice car, if we were ever going to do it.
I really didn’t want to haggle with salesmen, or have a lot of pain over buying a new car.
1. I did a lot of thinking about what I wanted, narrowed it down to a Honda CRV and Subaru Forester, and went on test drives. I eventually chose a Subaru Outback.
2. I joined Costco, and sent quote requests out with their auto purchase program, and got a quote for an Outback $3300 below MSRP+TTL.
3. I looked up price data on truecar.com and Nadaguides.com, and compared the Costco price to the truecar.com price distribution. According to truecar data, the Costco price was good, but some people were still paying $1000 to $1500 less in my area.
One thing I noticed was that TrueCar showed only $1800 difference between what was an above market price and an exceptional price, so I saw there were limits to how much I could shave the price, and I knew when to stop chasing price.
Also, based on my reading IMO dealerships don’t really make a big profit on new cars – I’m thinking 1% - 2%, so I didn’t need to feel that dealers were making a huge profit, and I could have gotten a lot lower price.
4. I selected 6 dealers within 1 ½ hour drive of my home, and sent them emails describing the exact vehicle build I wanted, and asking for a drive off the lot cash price quote by the next day. They all responded within a few hours.
5. I sent another email out telling dealers the low bid from the first round, and asking if they’d be willing to adjust their numbers. They all sent me back lower numbers.
6. I went to the dealer around the corner from my house, and he agreed to pay the lowest number, offered by a dealer across town. This was an exceptional price according to TrueCar.
So in summary,
1. MSRP+TTL was $39040
2. Costco+TTL was $35822 <$3218> savings
3. Round 1 email $34999 <$823> savings
4. Round 2 email $33800 <$1199> savings
5. Final out the door price I wrote on the check was $33,800 and I saved $5200 off of MSRP.
I took the old Toyota to two used car dealers, CarMax and TexasCar direct, got offers for $1000 and $1200, took the highest, and left with a check the same day. It was sad to leave my old faithful friend on the lot, but it was starting to need more repairs and had 178,000 miles. I think I got my money out of it.
I’m wishing you all good luck on your car shopping in the future.