What are your negotiating strategies in buying a new car?

[HunkyBill]

I'm trying to help out a friend of mine who is looking to buy a new car.

Things are different now a days. It seems dealers are a lot more creative in their fees. Canadians also seem to be willing to take anything the dealer offers to them. It's remarkable. I remember the difference between dealer invoice and MSRP was around 12%. Now, it's around 7% depending on the make and model. The higher end models eg. BMW, Lexus, Mercedes of course will yield a higher percentage.

In Canada, at least in Vancouver we pay a lot. In the USA freight is around $750. The freight cost is the same regardless if you're in Miami or in Anchorage. The same is true in Canada. That's he agreement the manufacturers have as far as costs go.

In some provinces, dealers have to advertise "all-in" pricing. All charges and costs have to be factored in the final price. This can be both good and bad as I see it. The customer no longer sees a detailed breakdown of the costs. One example is Freight and PDI. That is now one big price. FORD says they don't charge PDI any more. However, they actually do. They have it grouped in with the freight. For example,. the freight and PDI may be more than $1700. Ford will advertise the freight as $1699 for example.

Back in the day, I recall speaking to a mechanic who was also my friend who worked at a major dealership. He said they always looked forward to coming in on the weekend for some light work ie. doing PDIs. They didnt have to do much. They just checked the tire pressures, topped up if necessary the coolant, checked the oil, broke in the brakes because the pads were brand new and noisy. Back then the mechanic would get 1/2 an hour for the job. The lot boy would do the clean up, removing the shipping wax (not adhesive skin) wash the car, add tire dressing. Not much else was really required. The car was ready to be driven from the factory. He said for consumers, the PDI is one of the biggest scams out there. Yet, everyone pays for it and nobody questions it....at least not in Canada.

Another big scam is the admin fees. I remember when it was like $50. Now it's up to $600. Like for what? Nobody is able to give a legitimate break down of costs. Of course, they give illogical answers like advertising costs, dealership costs, etc. I say, hello!! That's the cost of doing business. You don't pass that cost on to me. Besides, you get a tax right off for these expenses any ways.

So I am just curious what are people's strategies when negotiating for a new car?

 

[L.D. Silver]

Try unhaggle.com. Find the car you want, look up its "invoice price", take it to a dealer and negotiate from the invoice price. Just bought a car this way and worked out pretty well. Went 3% above invoice price.

Good luck!

LD

 

[HunkyBill]

I did thanks. However, they make no mention on the above extra fees and how much they really cost. I think this is what the dealer is counting on regraining the profit margin by quoting the invoice price at + 3%. One dealer praised me for knowing the invoice price, saying he is happy I won't be coming in and asking several thousand dollars off the MSRP. When the dealer said this, my bullshit radar just went crazy. lol.

 

[allhorsesaresamecolour]

When I was selling my car buyers would come in and show me all these little BS "faults" with my car in hopes of demoralizing me and getting me to lower my asking price. Of course, I saw right through those little bastards and didn't budge. Willingness to walk, and actually doing it if forced to is always a good strategy. Of course this never works with me for women as they are always totally okay with me walking

 

[felixthecat]

I used www.carcostcanada.ca more than once.

Don't forget about current manufacturer's incentives, they can be quite high especially on last year models, while MSRP / invoice price doesn't reflect those. Need to subtract the current cashbacks or whatever. These can change every month or more often.
Sample report https://www.carcostcanada.com/en/WPR_Sample.asp

The site has some connections with dealers, some of them would get to you with offers of special "internet price", no need to even look/negotiate.
That's optional. I did the old style, just walking in and talking to the fleet manager with a printout of their costs in hand and made an offer. Especially at the end of a month/quarter they may care more about closing a deal than getting maximum profit.

 

[allhorsesaresamecolour]

Offer them straight cash for the purchase. $5,000 - $10,000 less than the sticker price. No dicker no sticker. Bullshit. you want to sell the car. I know what the dealer invoice is for that vehicle and it's not the one you have on the window. So Cash. or a Certified cheque from my bank to you, in this amount.

Then when they say no to the deal I simply get up and walk out. Got 2 of my last cars that way. They Chased me out to the parking lot...lol not a great tactic if it's something you really want but #1 be prepared to get up and walk out.

You just copied my strategy for buying cars!
But how can I get this "walking out" strategy to work with women, assuming you are not very successful or good looking?

 

[badbadboy]

I have always networked with the Managers of major chains. Most will get me the deal I want without having to go through any negotiation whatsoever. I have bought three SUV's and a couple of cars that way. On the SUV's, since they were higher end I was able to get in excess of $5K off sticker price and the cars were a bit less than those discounts. The last brand new vehicle was in the high 40's and IIRC I was discounted about $4K which was the best the Fleet manager could do for me.

If you don't know anyone within the industry, you can hire a car broker who is dialled in with the dealerships. They typically charge you $750 for their service and in the case of one SUV, they also saved me nearly $5K. I have used two brokers depending upon where I needed the car to be delivered. Both did a good job for me.

Now these deals were prior to the meltdown in the car industry and the cost of gasoline going through the roof. I know for instance you can get nearly $10K off a $55K 2013 SUV right now. A 2014 would definitely cost you more.

I found that after years of sitting across the table from some salesperson who was unable to give you anything that you want without asking his or her boss was a total waste of my time. I research the costs of these vehicles through my contacts in the industry and know what the dealerships' bottom line is so I am equipped to negotiate with knowledge. Car brokers deal directly with the Fleet Sales of any given manufacturer and not with a specific dealership. You just tell the broker where you want your vehicle delivered and show up to sign the papers.

 

[PuntMeister]

Timing can be everything. What worked best for me was to find the car I wanted. Waited until the new model year vehicles just hit the show room. Then customers don't want to buy the previous model year, even though they were the only thing going 2 weeks ago. Talk to an inventory manager or sales manager with some decision making authority and see what old model year cars they are now stuck with. They know they need to blow them out as their lot is over full and they are stuck with pretty coloured elephants. Got >$12K off last time, and about $250 over invoice. Did them a favour--they would have taken a bigger bath later on and happy to just get their investment back. Pretty fair under the circumstances. The new model was identical to the old model. Brand new, full warranty, etc. Summer or early fall seems to be the usual model year changeover season, but varies sometimes by brand and year.

 

[WildBob]

Don't bring your wife. The salesperson try to get to them hoping that they will convince/pressure you. Its irritating trying to buy a car for yourself and the sales person talks mostly to the lady. Unless of course you are buying a car together.

 

[87112]

Don't really have one, look at the Friday car ads and go from there? I like to pay the average going rate, If everyone got a no profit deal think of all the people, business going under and if my neighbor is out of work sooner or later it will be me next.
So these vultures that come in and say I want to pay 2k under your fair price I like to smack them in the head cause they have never had to open a business and deal with jerks who think lights, insurance, property tax, water, employee insurance comes from thin air.
With how the internet is and all the advice given a good price for both parties is not that hard to find.
So if you want to steal a car go to Craiglist and have at it.

 

[normisanas]

Bring along a hot girl, and negotiate pussy payments.

 

[WildBob]

Damn, didn't think of that.

 

[sdw]

When I was selling my car buyers would come in and show me all these little BS "faults" with my car in hopes of demoralizing me and getting me to lower my asking price. Of course, I saw right through those little bastards and didn't budge. Willingness to walk, and actually doing it if forced to is always a good strategy. Of course this never works with me for women as they are always totally okay with me walking

lol, jeeeze how do you make women wait until you walk? They have usually run away from me long before I can walk.

 

[1nitestan]

Find a car broker. Dealerships and retail are for chumps.

 

[Oldfart]

Do your negotiations on the last day of the month, when the sales department only has one day left to meet their monthly quota. The last day this month just happens to be New Year's Eve. Go to the dealership you want to buy from a few days earlier, and pick out the vehicle you want - new or used it doesn't matter. Go back a few hours before closing on the last day of the month and they'll practically be going down on you to finalize a deal.

 

[janje]

Actually most good salespeople will have made their quota way before the end of the month.
The beginning of the month, and the beginning of a quarter is when most salespeople have the best price flexibility because there are still sales motivators (bonuses) available.
At the end of the month they may work hard for your sale, but at the beginning there is more money on the table for them to be flexible in pricing.

 

[87112]

Not sure why all the hatred towards the car business people. Lets face it, when we walk into a dealership most of us want to walk out with a deal that makes the dealer lose money with negative dollars on the books. So why should they just roll over and play dead cause you're a customer. Been on both sides of the game myself.

 

[1nitestan]

Not sure why all the hatred towards the car business people. Lets face it, when we walk into a dealership most of us want to walk out with a deal that makes the dealer lose money with negative dollars on the books. So why should they just roll over and play dead cause you're a customer. Been on both sides of the game myself.

Why? How 'bout.....

-shitty attitude about potential customers. Car salesmen are like strippers- they won't pay attention to you unless you 'look' rich
- inadequate product knowledge. Don't look at the sales brochure every time I ask you a question. I'm literate enough to do that on my own.
- "let me ask my manager", when it comes time to talk pricing. You and I both know you just walk into the the staff lounge and talk sports while I waste time waiting for you to play out the illusion of negotiating.
- having to threaten to leave before you accept my last offer....it is fun watching you grovel though, but really, you must have very little dignity.
- talking down to women - selling a car based on cup holders and vanity mirrors when a woman walks into your dealership is sexist and unprofessional.

This is why I get my vehicles through a car broker. If I have to talk to a piece of meat to obtain a car, at least he's intelligent enough to make the experience not degrading to both of us. I'm not expecting to screw anyone out of hard earned commissions but it gets to a point when you just can't take the bullshit you have to go through just to buy a car at the retail level.

 

[HunkyBill]

Some good advice so far!

Offer them straight cash for the purchase. $5,000 - $10,000 less than the sticker price. No dicker no sticker. Bullshit. you want to sell the car. I know what the dealer invoice is for that vehicle and it's not the one you have on the window. So Cash. or a Certified cheque from my bank to you, in this amount.

Then when they say no to the deal I simply get up and walk out. Got 2 of my last cars that way. They Chased me out to the parking lot...lol not a great tactic if it's something you really want but #1 be prepared to get up and walk out.

Having cash always works wonders. If you need to finance, they tend to have you by the balls. Which is the case of my friend.

Find a car broker. Dealerships and retail are for chumps.

We're thinking of that actually. I know the brokers use the services of carcost and unhaggle. .
I haven't made the call yet, but even if you manage to knock down the invoice price, the other grossly inflated fees come into play as already mentioned ie. PDI, Documentation/Admin fees. These two fees can add up to a $1000 or more. Yet, nobody talks about them? :ballchain:

I have always networked with the Managers of major chains. Most will get me the deal I want without having to go through any negotiation whatsoever. I have bought three SUV's and a couple of cars that way. On the SUV's, since they were higher end I was able to get in excess of $5K off sticker price and the cars were a bit less than those discounts. The last brand new vehicle was in the high 40's and IIRC I was discounted about $4K which was the best the Fleet manager could do for me.

If you don't know anyone within the industry, you can hire a car broker who is dialled in with the dealerships. They typically charge you $750 for their service and in the case of one SUV, they also saved me nearly $5K. I have used two brokers depending upon where I needed the car to be delivered. Both did a good job for me.

Now these deals were prior to the meltdown in the car industry and the cost of gasoline going through the roof. I know for instance you can get nearly $10K off a $55K 2013 SUV right now. A 2014 would definitely cost you more.

I found that after years of sitting across the table from some salesperson who was unable to give you anything that you want without asking his or her boss was a total waste of my time. I research the costs of these vehicles through my contacts in the industry and know what the dealerships' bottom line is so I am equipped to negotiate with knowledge. Car brokers deal directly with the Fleet Sales of any given manufacturer and not with a specific dealership. You just tell the broker where you want your vehicle delivered and show up to sign the papers.

$750? I was told the norm is around $350 (dunno how current that info is) and it doesnt matter what vehicle, if the broker is reputable. The reason is the broker should not be basing his fee on the cost of the car because that would prejudice the buyer because the more the buyer spends, the more the broker makes.

I think some dealerships or salesmen are like some hotels, they'd rather have a vacant room than let it go for a discount. That mindset blows my mind and apparently it's not uncommon.

 

[badbadboy]

Some good advice so far!


Having cash always works wonders. If you need to finance, they tend to have you by the balls. Which is the case of my friend.


We're thinking of that actually. I know the brokers use the services of carcost and unhaggle. .
I haven't made the call yet, but even if you manage to knock down the invoice price, the other grossly inflated fees come into play as already mentioned ie. PDI, Documentation/Admin fees. These two fees can add up to a $1000 or more. Yet, nobody talks about them? :ballchain:


$750? I was told the norm is around $350 (dunno how current that info is) and it doesnt matter what vehicle, if the broker is reputable. The reason is the broker should not be basing his fee on the cost of the car because that would prejudice the buyer because the more the buyer spends, the more the broker makes.

I think some dealerships or salesmen are like some hotels, they'd rather have a vacant room than let it go for a discount. That mindset blows my mind and apparently it's not uncommon.

I checked with the last broker I dealt with for a recent vehicle. I was told less than $750 is not worth their time or effort. This is their only source of revenue and it pays salaries, heat, light, taxes and expenses. This broker does all makes and models from your low cost to high end imports. Same brokerage cost for each vehicle. All factory incentives are passed on to the consumer not the broker. So from an ownership standpoint it really only makes sense if you are getting a higher end vehicle whether it be North American, Japanese or European. Regardless, with my $750 investment I was able to save thousands, stress free. The stress free was a big selling point for me. Doing the research and itemizing exactly what I wanted was the fun part.