New Truck-negotiation- cash back incentive

[FI_RElater]

Rule 4..pay cash that works too...

that's my "default" ...but last time it was actually better to finance for an additional rebate... just pay it off after 1 month (saved over 1k more that way)

(the dealer also gets credit for one more using financing by the manufacturer; my out the door price using cash had already been negotiated, they looked at the option and pointed out it just had to be held until it processed at corporate for the one month of interest... we just had to finance a part of the cost (not the whole amount) so that interest wasn't significant)


and agree with Chevy.... there's things that dealers do that we aren't privy to
(In my last case, it was a small local/rural dealer, there was a lot of haggling over shifting various vehicles to different other dealers (sometimes best sellers, sometimes the fully loaded ones)... so that they could move the ones that they had but still get future inventory of others that they could negotiate with other dealers in the future... it's a bit of a process but it's how smaller dealers have to play)

 

[pjigar]

If you are hesitant to negotiate hard then try this. Send you exact requirement to several dealers including one or more from a different city/state that is fairly close by.

Go for bottom line, out the door pricing, net of all rebates. Let their respective internet sales teams compete.

Your best price may well be from a dealer who has one sitting on the lot.

Pick one.

A colleague of mine did this several years ago. It worked out extremely well for him.

I did this back in 2000 and 2013 (Last new car), and it worked both the time. No pushy sales people to deal with.

 

[brett]

Go out and test drive everything on your list. Narrow it down to one, possibly two. Decide what options you want and those that might be nice to haves.

Going out to internet bid is the very last task. After that it simply comes down to the net, out the door price inclusive of any rebates etc.

 

[catii]

Simplest way for our last three new cars:

1. Do your own calculations

2. Determine out-the-door price, including taxes

3. Write a check for that exact amount

4. Demand to see the sales manager

5. Hand him the check for the car you want on the lot

I have yet to see a sales manager who handed my check back!

 

[Wishing]

We bought a new car early in the pandemic. We live in Alabama and sent our desired price and trade-in requirements to multiple dealers in surrounding states. We got the best deal from a dealer in North Carolina who delivered the vehicle to our home in south Alabama - free of charge.

 

[Car-Guy]

I just bought a new truck in May.... I stopped by the dealership and told the salesman what I wanted. (Color, options, etc) I told him to give me a call if he could find a match. A few days later he called with a perfect match but it was located out of state ~500 miles from here. I asked him to send me a copy of the window sticker and pictures of the new truck which he did. I then looked up my trade value (via KBB). I then checked the available discounts, came up with I thought was a fair offer, and then sent the dealer an email with pictures of my trade and VIN#, and told him what I'd be willing to pay for the new truck (drive out). He never saw my trade in person but I told him if it wasn't as I was representing it, he could call off the deal. They brought the truck down the next day and the deal was done. (All VIA email)

 

[SecondCor521]

I do things pretty much like @pb4uski and others. Internet research, then test drives, then send letters to the fleet sales managers with the exact model / color / options I want and let them know that best out-the-door price will win my cash business in three days. I just asked for a return fax with their best offer; that way I didn't even have to talk or haggle with anyone and I also had their offer in writing.

When I did this, I was very pleased with the results. I was surprised that the lowest price offer was also the most professional and the best customer service. They ended up having a car coming off the production line that was allocated to them that they sold to me, so the car barely touched their lot. For a car dealer not having lot finance charges as well as getting their cash conversion cycle days average down probably helps them out.

The one thing I would add is that I figured out that a one-way plane ticket plus some gas was only a few hundred bucks to nearby metro areas, so we lived in Boise but I included dealers from Salt Lake, Portland, Seattle...anywhere I could get a cheap flight to and then drive home. This increased the number of letters I sent out and I think having more competition helped my cause.

 

[Hyper]

Doesn't work in our area of surrounding states. Use to be able to get auto/atv dealers to compete but not anymore. In our area they stick to a set price regardless of trying to get them to compete for your business. I have seen a yr old vehicle on the other side of the US that would come down because they had it so long. It's like they all made a pact not to compete and the price is what they determine to ask. We almost bought a new diesel earlier this yr but fought over who HAD to drive it. Nice to have fights like that! Still driving my 2000 f550 and happy!

 

[67walkon]

Here's a new twist. I've been doing the out the door price negotiation between different dealers. On my wife's last Hyundai, they kept trying to get me to consider a lease and I wanted to pay cash. The finance guy came in at the end, to try to sell me some extended service package, which I declined, but he told me there was a lease incentive of something like $5,500. I thought about it a bit and asked if there was a pre payment penalty and there wasnt.

Long story short. I agreed to a lease, got the lease incentive which was less than the $5500 because of some costs, but still around $4500. Got the out the door price down by the $4500, made a couple of lease payments and paid the lease off. It worked! Saved about $4-4500.

 

[pb4uski]

So are you saying that any lease upfront money plus the number of lease payments times the monthly lease amount plus the buyout at the end of the lease was less than your negotiated out the door price? If so, I've never heard of that.

 

[67walkon]

Yes, that's what it was. As you probably know, the leases are basically a financing scheme where you are financing the difference between the negotiated purchase price and the pre-determined residual value at the end of the lease term. I don't think the residual value is negotiable but the purchase price is. I negotiated what I believed was a reasonable purchase price, based on Edmunds and KBB. At the very end, I had the checkbook out to write the check and they tried to sell me a maintenance package I didn't want. The finance guy mentioned the lease incentive and I asked him to run the numbers and to me how he did it. I was surprised, but it ended up saving thousands of dollars. The car was an Azera and it was the last year for the Azera. No prepayment penalty and the final sexiness in the $4,000-4,500 range, although the claimed incentive was higher.

 

[SonofCohoes]

If you are hesitant to negotiate hard then try this. Send you exact requirement to several dealers including one or more from a different city/state that is fairly close by.

Go for bottom line, out the door pricing, net of all rebates. Let their respective internet sales teams compete.

Your best price may well be from a dealer who has one sitting on the lot.

Pick one.

A colleague of mine did this several years ago. It worked out extremely well for him.

I tried this method without success although I thought it would be a great way to simplify things. It didn’t.

 

[OldShooter]

...

2. Determine out-the-door price, including taxes

3. Write a check for that exact amount

4. Demand ...

My experience from both sides of the table, including owning a business that sold big-ticket used capital equipment nationally:

As seller: (1) If I take a buyer's first offer it is almost always because it is higher than I would have settled for.

As seller: (2) A buyer with an adversarial attitude (for example "demand") will often pay more on the principle that they have a high probability of being a PITA down the road. Sometimes they won't pay more because I fire them as a customer (by giving them a clearly unacceptable price). Knowing when to cull high-maintenance customers is IMO important to the P&L.

As seller: (3) A buyer who promises to be easy to deal with, honest, and who recognizes that mutual satisfaction is the goal will get my best price. I will try my hardest to make him a repeat customer.

As buyer: I am always disappointed when my first offer is accepted because it almost always means that I have offered too much. I really hate this and will sometimes ruminate on my error for days. Part of this, admittedly, is because I love the game and have been denied an opportunity to play (behavioral finance: No "Transaction Utility").

All that said, most people do not love the negotiation game and, for them, offering a little more in order to avoid having to play could be a good tradeoff. So if a take-it-or-leave-it approach satisfies, then it's a good approach.

 

[Archman]

My hangup with all this is that I want to test drive the actual vehicle I end up buying.

 

[brett]

Don't confuse test driving with buying. You can test drive at any dealerships, or several dealerships.

Decide what you want, then go out to tender as it were and get you best out the door price from the internet or fleet sales folk at various dealerships.

 

[aja8888]

My hangup with all this is that I want to test drive the actual vehicle I end up buying.

Same here, so my plan is to visit a dealer and test drive the desired vehicle. I did that when looking to buy a new F150 two years ago. I drove it home and DW had such a hard time getting in and out, I didn't make a purchase of any F150.

I would have been in trouble if I willy-nilly just bought one and expected her to be able to navigate the height of entry.

 

[ExFlyBoy5]

I don't know that I would be buying a car, right now. As you might recall, my DW purchased a new car a few weeks ago. The car that was replaced was sold to Carvana.

While we were researching Carvana, I put in the information for my 2018 F-150 (with about 22K miles) and they made an offer that I thought was a bit high. I didn't think anything about it until yesterday when I got an email from Carvana with a "revised" offer for my truck. The revised offer was almost $2K more than they offered before and is now HIGHER than I paid for the truck TWO YEARS ago and the offer is $2990 over the KBB price.

Never in a million years would I have thought that I could buy a pretty standard F-150, drive it for two years, and then sell it for more than I paid. This tells me the auto market is all sorts of screwy.

 

[Archman]

Don't confuse test driving with buying. You can test drive at any dealerships, or several dealerships.

Decide what you want, then go out to tender as it were and get you best out the door price from the internet or fleet sales folk at various dealerships.

So, if I make a deal online, or order a vehicle through a dealership, I still want to test drive the delivered vehicle and have the option of not taking possession of the vehicle?

 

[SecondCor521]

So, if I make a deal online, or order a vehicle through a dealership, I still want to test drive the delivered vehicle and have the option of not taking possession of the vehicle?

When I bought my vehicle via the "best out the door price quote reverse auction" method, they delivered it to my driveway and were totally cool with me taking it on a short test drive just to make sure the vehicle was in proper shape.

I don't think they would have been too happy if I declined delivery for a personal preference like the entry height being too high that I should have discovered by a regular test drive. But I think they would have been OK with me rejecting the vehicle for a specific quality reason like the paint on the hood peeling off or the radiator was missing or the windshield was caved in by a large rock or something like that.

In my case, the vehicle arrived in my driveway, I took it on a five minute drive, did a walk around, and then wrote them a check and sent them on their way.

 

[Bamaman]

I worked for an auto manufacturer for 24 years, however that was many years ago. I still know a few dealer principals and sales managers from "the old days" that shoot me a straight deal. My family still owns a luxury car dealership in a large city also.

The retail automobile market has always been a very competitive business, and dealers often spar against each other for personal satisfaction. There's always one or more dealers everywhere that will "deal" aggressively--especially against each other. (They often don't care for the competition."

The trick is to identify the aggressive dealers and play them against each other.

I avoid large chain dealerships like the plague. I don't like how their people are treated and that they charge ridiculous Documentary Fees--even to their own employees. I prefer home owned dealerships with sales forces that are there year to year.

I recently bought a new 1/2 ton truck after receiving a $3K coupon in the mail--on top of a ridiculous number of other manufacturers' incentives of all kinds. It took the dealer 1/2 hour just to figure out the rebates--so many options to be made.

Good luck on figuring out who the aggressive dealers are in your retail market. Not all places have Akins Fords, Brandon Fords or Laura Buick-GMC dealerships.

 

[pb4uski]

So, if I make a deal online, or order a vehicle through a dealership, I still want to test drive the delivered vehicle and have the option of not taking possession of the vehicle?

I do it backwards from what you wrote. I test drive vehicles as if I was a conventional buyer to decide the vehicle that I want. Then I build it on the manufacturer's website and on Trucar. Then I contact a handful of dealers within 200 miles and ask for their best out-the-door price on the vehicle that I built.

The last time I did that my local dealer was $200 more than the best price that was 150 miles away. I decided that I was willing to pay the extra $200 to avoid 300 miles of driving and the goodwill of having it serviced where I bought it.

 

[jazz4cash]

So.... what make, model, and options are you getting?

 

[wolf]

So, if I make a deal online, or order a vehicle through a dealership, I still want to test drive the delivered vehicle and have the option of not taking possession of the vehicle?

Of course. Test drive the vehicle, before you close the deal.
After getting the "out the door price", I drive to the Dealer, test drive the vehicle, be sure it runs OK, then complete the deal.

No Dealer expects you to hand "over" your $$$, before you drive the vehicle.
Change your mind, if there is something "wrong". ie. Vehicle does not run,start,mechanical issues, ie......

 

[JoeWras]

I don't know that I would be buying a car, right now. As you might recall, my DW purchased a new car a few weeks ago. The car that was replaced was sold to Carvana.

While we were researching Carvana, I put in the information for my 2018 F-150 (with about 22K miles) and they made an offer that I thought was a bit high. I didn't think anything about it until yesterday when I got an email from Carvana with a "revised" offer for my truck. The revised offer was almost $2K more than they offered before and is now HIGHER than I paid for the truck TWO YEARS ago and the offer is $2990 over the KBB price.

Never in a million years would I have thought that I could buy a pretty standard F-150, drive it for two years, and then sell it for more than I paid. This tells me the auto market is all sorts of screwy.

I'm guessing here...

Lots of demand for vehicles that can TOW, because people are buying RVs for these stay near home vacations.

Lots of demand for work vehicles. I don't know about your area, but people are nesting and the remodel market is HOT. Skilled construction workers have jobs, if they want them. They may need a truck. Many trucks are full of workers, so perhaps some of the more established workers may want to DRIVE ALONE instead of carrying 4 of your best germ carriers with you.

 

[jazz4cash]

I'm guessing here...

Lots of demand for vehicles that can TOW, because people are buying RVs for these stay near home vacations.

Lots of demand for work vehicles. I don't know about your area, but people are nesting and the remodel market is HOT. Skilled construction workers have jobs, if they want them. They may need a truck. Many trucks are full of workers, so perhaps some of the more established workers may want to DRIVE ALONE instead of carrying 4 of your best germ carriers with you.

The F150 is a very popular vehicle but not that great for towing and desirable but not too valuable as a work truck. It’d be interesting to see what the actual comps are. Pickup values are likely regional and a seller like Carvana can easily use that to their advantage.