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Haggling the Price of a car

KB

KB

Diamond Member
I plan to buy a Nissan Sentra, Honda Civic or Toyota Corolla in the next 3 weeks and need to learn the ropes about haggling. I have visited many car websites such as www.edmunds.com, www.carbuyingtips.com and the google newsgroups. So what is the secret? Should I just say I want 1,000 bucks off the MSRP and hold firm?
 
$1000 off MSRP! Ummm, you gotta hit them up at thier "dealer invoice" and work up. I bought a '02 Supercharged GTP 2 months ago. MSRP 28,500, got them down to dealer invoice of 25,800. Then i traded in my car and had 0.0% financing for 3 yrs. Closest dealer for the car was by more $1,500!
 
Never start at subtract off the MRSP, start off at the dealers invoice price and slightly work up.


Unless it a new "hot" car...EG 2003 Toyota Matrix.. you will have to paid MSRP/
 


<< Unless it a new "hot" car...EG 2003 Toyota Matrix.. you will have to paid MSRP/ >>




😀
I bought my Matrix at $500 above invoice and I got the dealer to give me $1500 above book on my trade-in 🙂

 
Edmunds.

They'll tell you about how much you should pay for your car. Just to let you know, Mazda and Nissan will allow far more bargaining room than Toyota or Honda.

Well...unless you are looking at the previous gen corollas. You might do well on the old body styles because the dealers want them off the lots.
 
are they only making a limited supply of the matrix? otherwise, haggling on that car will be like any other. unless its a car with limited production, like the PT cruiser was, the mazda mp3 was, and the bmw mini cooper will be, you can usually pay a few hundred above invoice. remember, even if you buy the car at invoice price, the dealer still makes money. dealer holdback is 2-3% of the invoice price.
 
It's always good to let salesmen know that you're willing to walk away from the deal (even if you're really not.) In the past, I've made it known that "this other dealership" quoted me this price. Then I'd go back to the other guy to see if he could beat it. Eventually, we'd find their bottom price and go with that. I did the same thing with my mortgage company. I let them know they were competing for my loan and I got a better rate and no points as a result.
 
I buy a new car every two years (I drive 60K an year for work) and here is what I do.

1. Wait until the model year changes if you can.

2. Find out if the dealer has any cars on the lot that have been there over 90+ days.

3. If they have a dog that has been there a long time they will want to move it because they don't want to pay any more flooring costs to the bank.

4. If not start with the dealer invoice and work up. (you should be able to get a invoice price from www.kellybluebook.com)

5. Have a payment in mind that you want and have them come to you on the payment. Don't lease buy it even if you have to stretch out the payment another year you will ge better off in the long run. It has to be realistic but DON'T back down.

6. If you have a trade-in don't spring it on them until the last thing that way you will show them you want the car if you can aggree to one last thing.

7. Don't be afraid to walk out on the deal!!!!!!!!!!!!!!!!!!!!

8. Smaller dealerships are better ones to deal with than the larger ones because they think that if you don't buy it somebody else will.

Remember they want your business but they will not deal unless they think they will loose the sale if you walk.


Last car I bought was a 2000 VW Passat last Memorial Day weekend. The 2001 new body style was out and they had this car on the lot for almost a year. Sticker was $26,500+ and I got $4,500 off the sticker and that was below their invoice. My new one has 38K+ on it now and my wife will get it next year when I trade her 1999 Passat in for my next car.

Good luck and remember you are in control because if they do not come to your terms you can walk out.


 
500 bucks over the invoice, maybe a little more for a popular car (civic,accords, camry etc.)
and you need patience, the salesman will often go back to the backroom to talk to the manager, which is a tactic to wear you down.

after 1 or 2 hours of haggling and going nowhere, tell the salesman since he already put so much time into this, and you are so close to buying the car, you could just walk away and the salesman gets nothing or you walk away with the price you want with the salesman getting at least something(maybe a little less than he wanted). They would hate to waste all the talking and time in return of nothing, so most of time they'll agree for a compromise that will be closer to your price than dealer's price. if its within 100 to 200 bucks of your price, then take the deal.
 
Something I might try next time is bringing in a printed out price from Carsdirect.com (since their price is usually just a couple hundred bucks over invoice.) It might make haggling a little easier since you can say, "look this is the exact model and options I want and this is my TOTAL cost. Can you beat that?" Hopefully, they'll be motivated enough to make the sell that they'll beat the price, or at least come close.
 
If you have a Trade-In, you're better off there as well... if the dealer can't haggle any lower on the cost of the car, they can raise the amount of the trade-in.

 


<< Something I might try next time is bringing in a printed out price from Carsdirect.com (since their price is usually just a couple hundred bucks over invoice.) It might make haggling a little easier since you can say, "look this is the exact model and options I want and this is my TOTAL cost. Can you beat that?" Hopefully, they'll be motivated enough to make the sell that they'll beat the price, or at least come close. >>



If they can't beat the price, why wouldn't you just order via carsdirect? Why would you buy if they're only 'coming close'?
 
New or used? I can tell you there is a big difference. New cars are much easier to get what you want out of because of the information available to you.

With a new cars, you know within a couple hundred dollars what the dealership paid for the car (the dealership?s invoice is usually a few hundred more than what?s shown on the internet because of a variable local ?marketing association? fee). Based on that, you can make any reasonable offer and expect to eventually buy the car for that amount + a couple-few hundred for negotiating room.

With a used car, you can only offer what the car is worth to you, and if the dealership paid too much, you don?t get to play. You really can?t be sure how much they paid for any used car, so you have no idea if they?re trying to make a ?big whack? off you, or just trying to cut their losses on something that?s been on the lot for over 1-2 months, that they paid too much for. If they won?t come close to what you feel is reasonable for any particular used car, there is a good chance that they?re just refusing to lose money.
 


<< If they can't beat the price, why wouldn't you just order via carsdirect? Why would you buy if they're only 'coming close'? >>

It depends how close they come I guess. Less than a couple hundred bucks and I'd probably just be tempted to go ahead and support the local guy, especially if they had exactly what I wanted on the lot and I didn't have to wait for it. Plus, you'll have to deal with the dealership anyway (most likely from what I've read) to pick up your car and go through all the final paperwork. It would just depend on the situation really. I've actually dealt with some very nice sales guys in the past and I'd personally feel a little bad if they came within spitting distance of a phenomenal price only to have me walk away because I'm suddenly not willing to pay an extra $100 on a $22,000 car. Call me a softy, a wuss, or whatever, but I personally wouldn't mind paying just a little bit more if I receive nice, face-to-face service at a good price. Hopefully, they'd just beat the price though and not make me bother.
 
When my dad got his 300M a few months ago, he went to a dealer and just said, Listen, I want a Chrysler 300M, it has to have Black leather interior and the sports package, be atleast a 2000 model, and under 30k miles, go to one of your car auctions and get me this and i'll pay you $300 more then what you paid for it.

My dad got a 2001 Silver 300M with black interior, completely loaded with 20k miles on it for $19k. That's a hell of a lot better then the brand new maxima's we were looking at that were about $29k as loaded as the 300M was.
 


<<

<< If they can't beat the price, why wouldn't you just order via carsdirect? Why would you buy if they're only 'coming close'? >>

It depends how close they come I guess. Less than a couple hundred bucks and I'd probably just be tempted to go ahead and support the local guy, especially if they had exactly what I wanted on the lot and I didn't have to wait for it. Plus, you'll have to deal with the dealership anyway (most likely from what I've read) to pick up your car and go through all the final paperwork. It would just depend on the situation really. I've actually dealt with some very nice sales guys in the past and I'd personally feel a little bad if they came within spitting distance of a phenomenal price only to have me walk away because I'm suddenly not willing to pay an extra $100 on a $22,000 car. Call me a softy, a wuss, or whatever, but I personally wouldn't mind paying just a little bit more if I receive nice, face-to-face service at a good price. Hopefully, they'd just beat the price though and not make me bother. >>



I dunno, it's still $100. Would you pay $200 for a $100 video card because it was a local seller?

While carsdirect pricing is lower than most, I woudn't go so far as to say it's phenomenal. Remember, they're still making a profit off of you. I am willing to pay -just- a little bit more for good service and I probably tip better than most, but how much effort do you think there really is in selling your car to you, anyway? Dealerships make their money from volume sales, and from the occassional 'winner' that walks on the lot, trades in a vehicle upside-down, thinks that they're getting a good deal by paying the sticker price or close to it, adding that onto financing from the dealer along with window etching, underbody coating, extended warranties, etc. Given the depreciation hit you take as soon as you drive off of the lot (excluding high-demand exotics, etc.), you're still getting shafted even if you do get the carsdirect price. (As you can probably see, I'm not a big fan of the automotive dealership industry)
 
The easiest way is to tolerate absolutely no BS. The fact of the matter is that they need your business a lot more than you need to buy a car from them. There are dozens of dealers within driving distance of anywhere and they're all competing against each other. The fundamental truth of any business is that even a small profit is better than no profit at all and it's better for a dealer to make $100 selling you a car than it is for them to make nothing if you buy from somebody else.

1) Do your homework. Find out EXACTLY what the invoice price of the car you want is. THAT should be your one and final offer for at least 90% of the car models available.

2) Read up on dealer holdback and don't be shy in letting the dealer know that you're well aware of how it works. Offer to explain it to him in a loud voice than can be overheard by other customers. Seriously, there's no greater joy in the car-buying process then explaining to your salesman that you know what holdback is and watching his mood change from "I'm going to milk this guy for every dime" to "This guy is going to milk me for every dime".

3) Control EVERYTHING! It's your money, it's your car, the buying process should work the way you want it to. The common trick is to go talk to his sales manager. They're not talking about the offer you made, they're just letting you sweat by deliberately wasting your time. They build your anticipation to lower your resistence to a counter offer. Don't let that happen. When the salesman wants to leave the room, PUT HIM ON A TIME LIMIT. Tell him "my time is valuable and you will not be wasting any of it this evening. You have 2 minutes to talk to your manager. That's plenty of time to get a yes or no to this offer. If you're not back in time, I walk out". Stick to that. If he's not back in exactly 2 minutes, walk out. Watch how fast he'll come running ane he'll get the message loud and clear. You would not tolerate any other business making you wait to take your money. Would you really wait 15 minutes on line at the supermarket while the cashier asked the store manager for permission to ring up your order? Don't accept it from a car dealership. The person that controls the negotiations wins.

The real simple fact of the matter is that an average car now costs more than $20,000. The average dealer holdback is about 3%, so the dealer can sell you that car at exactly invoice and still make $600 and up, PLUS he gets a sale that his competitors don't, PLUS he sells a car towards his sales quota, PLUS he gets a customer that he can sell parts and service to for the next 4-8 years. Explain it to the dealer just like that, make it firm that you won't go a penny over invoice (fell free to offer $100 below invoice just to shake them up) and ask them how likely their competitors would be to accept that offer so that they'll make the profit rather than allowing the guys you're talking to to get it. At that point it'll be a done deal. Right now car sales are in the tank. The dealers are desperate for business and even popular cars like the Honda Accord or Toyota Camry can be had for invoice. Just don't allow them to play games with you, if you're a real tough negotiator they will be happy to sell you the car for minimal profit and make it up by screwing the next dimwit they come across.
 


<< The easiest way is to tolerate absolutely no BS. The fact of the matter is that they need your business a lot more than you need to buy a car from them. There are dozens of dealers within driving distance of anywhere and they're all competing against each other. The fundamental truth of any business is that even a small profit is better than no profit at all and it's better for a dealer to make $100 selling you a car than it is for them to make nothing if you buy from somebody else.

1) Do your homework. Find out EXACTLY what the invoice price of the car you want is. THAT should be your one and final offer for at least 90% of the car models available.

2) Read up on dealer holdback and don't be shy in letting the dealer know that you're well aware of how it works. Offer to explain it to him in a loud voice than can be overheard by other customers. Seriously, there's no greater joy in the car-buying process then explaining to your salesman that you know what holdback is and watching his mood change from "I'm going to milk this guy for every dime" to "This guy is going to milk me for every dime".

3) Control EVERYTHING! It's your money, it's your car, the buying process should work the way you want it to. The common trick is to go talk to his sales manager. They're not talking about the offer you made, they're just letting you sweat by deliberately wasting your time. They build your anticipation to lower your resistence to a counter offer. Don't let that happen. When the salesman wants to leave the room, PUT HIM ON A TIME LIMIT. Tell him "my time is valuable and you will not be wasting any of it this evening. You have 2 minutes to talk to your manager. That's plenty of time to get a yes or no to this offer. If you're not back in time, I walk out". Stick to that. If he's not back in exactly 2 minutes, walk out. Watch how fast he'll come running ane he'll get the message loud and clear. You would not tolerate any other business making you wait to take your money. Would you really wait 15 minutes on line at the supermarket while the cashier asked the store manager for permission to ring up your order? Don't accept it from a car dealership. The person that controls the negotiations wins.

The real simple fact of the matter is that an average car now costs more than $20,000. The average dealer holdback is about 3%, so the dealer can sell you that car at exactly invoice and still make $600 and up, PLUS he gets a sale that his competitors don't, PLUS he sells a car towards his sales quota, PLUS he gets a customer that he can sell parts and service to for the next 4-8 years. Explain it to the dealer just like that, make it firm that you won't go a penny over invoice (fell free to offer $100 below invoice just to shake them up) and ask them how likely their competitors would be to accept that offer so that they'll make the profit rather than allowing the guys you're talking to to get it. At that point it'll be a done deal. Right now car sales are in the tank. The dealers are desperate for business and even popular cars like the Honda Accord or Toyota Camry can be had for invoice. Just don't allow them to play games with you, if you're a real tough negotiator they will be happy to sell you the car for minimal profit and make it up by screwing the next dimwit they come across. >>



wow, i think we got an expert in here
 


<<
wow, i think we got an expert in here >>



It's not something I'm proud of, but I did sell cars for a while. My career wasn't too long though as I was unable to sit there across the table from somebody and bury them in a bad deal on a car they couldn't afford. My inner voices were screaming "My God!! Run away from this deal, you can get it for $2000 cheaper if you had a clue!!" while my outer voice said "This is the best deal around". Blech 😱

I did last long enough to learn just about every trick in the book and a few that were not. The horror stories of what sorts of things go on at dealerships do not do justice to the real facts. Despite the unlimited contempt most customers have for their dealers, they're giving the dealers too much credit as many are even worse than the slime they're assumed to be. If you walk into a dealer assuming that every word you hear is a lie, every promise will be broken and every price quoted is off by at least 30% you'll be right more often than not. The dealer will do everything possible to seize the advantage and keep the customers off-balance and conscience is not an issue. If the deal you're about to make will bankrupt you and have your children eating out of a dumpster within 2 years, the average dealer will still try to get you to buy the undercoating package so that you'll be eating out of a dumpster in 18 months instead. He'll laugh as you drive away, get slapped on the back by his buddies and congratulated by his boss for the efficient way he screwed you over. Now that sales are so bad and the power can truly shift in favor of the customer, it's important to enjoy it. Really beat the guys up and rake them over the coals for every penny. They have no choice but to sit there and take it and their pain can be exceptionally entertaining. 😀
 
if i may interject a question

i know toyotas and hondas and all popular models tend to stay real close to msrp

hows subaru compare?
can i get say 300 over invoice on a subaru (thats not a popular wrx🙂)
 
GagHalfrunt has very good points. Remember the most important and powerful thing in the negotiations of buying a car: you can walk out anytime you like. I work with a guy who sold cars for 20+yrs. Whenever the salesman leaves to "talk to his boss", he is either running your credit or taking a smoke to let you sweat. Do not stand for this! My coworker said that if the salesman thinks that you know your stuff then he would be an idiot trying to play you. So the second most important thing is knowledge about the car (price, etc.). Never let the salesman know that you really want the car. Never tell the saleman before you agree on the price that you have a trade-in. Go at the end of the month - the salesmen have quotas. No matter what price they sell you the car, they will make money. There are all sort of incentives from the manufacturers for the dealerships to make money off of.

I bought my wife a civic 2 yrs ago. The salesman said the sticker price and I laughed at him. He said, "What?" I told him that he was crazy - I am a big believer in that cars, homes, etc. are way overpriced due to "financing." Financing is how we 'afford' something. He asked me what I wanted to pay and I gave him $100 over the invoice price. He said, "You want to pay invoice?" He then stated that he couldn't sell it for that much. I stood up and told my wife to come on. As I started the car, he came running out of the dealership yelling hold on. He said that his boss told him he could accept that price - yea right. I told him I would think about it and drove off. About 32 hrs later and 6 messages on my answering machine, I showed up and bought the car. Everytime the phone rang I just smiled at my wife and said sweat baby sweat.

My coworker has told me so many stories that would make you sick. He once sold a one armed man(left arm) a standard shift truck. A couple once tried to return a car because they couldn't make the payments. He talked the wife into going back to work and they drove out not with one car but two.
 
GagHalfrunt's advice is super.

I would add a few things.
Walk in with a briefcase handcuffed to your wrist.
Ask to talk to someone who can negotiate the price, not a flunky who has to ask the manager.
 
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