Ask MM: Buying a New Car

[Ginger]

My girlfriend's car was recently totaled. She's OK, it was just a minor parking lot incident, but it left her vehicle totaled. She was looking at getting a new vehicle, anyways, so it could have come at a worse time. She's thinking about buying a brand new vehicle.

I know how most people feel, financially, about buying a new vehicle. That's not up for debate here so please keep that kind of commentary to yourself. I've never bought a new vehicle before and neither has she - so I'm looking for advice on negotiating with dealerships.

Do people still do it, or is Carmax the only dealer out there with a no negotiation policy? What do you use as a price base to negotiate from? Blue Book? Are any manufacturers or out there known for not honoring their warranties or trying to skimp out of sketchy terms?

What advice do you have for going through that process?

[CaptainHenreh]

What's the budget?

Saturn has a no-haggle policy, and for other dealerships I'd start with edmunds.com. They have a "what other people are paying" thing for new cars, might be worth looking at.

[ScottyB]

Andrew -- i don't have the material on hand at the second but i'll try to get back to you on this as i went through a moderate degree of training to be a car salesman as it was my fallback job when i first moved to atlanta.

i can tell you straight off that it's going to be a bit tedious at times if you are keen on negotiating exactly what you want. are you considering buying off the lot or ordering brand new from the factory? that will change your tactics a bit.

[WRXtranceformed]

You can definitely negotiate. There are so many dealerships out there that most good dealers know that you could walk out of their store and go to another dealer of the same brand and probably get the deal that you were looking for. If she decides on a make / model, go shop around a couple of different stores to see who's going to give you the best deal.

I've bought new before, and I negotiated about $2,000 and some other stuff off of the price just by standing up to leave. I'm sure you can get more based on what time of the year it is, whether the dealer is trying to get rid of previous model year cars, etc. Body language is huge in sales, probably more so in car sales because people tend to be more impulsive when they're buying cars than other stuff.

Slightly off-topic, when I bought my Tundra used I also used the "get up and walk out" strategy when I balked on the price of the car. The sales guy literally chased me out of the store, begging to see what it would take for him to sell it to me. I threw a lowball price out, then he went and grabbed the dealer inventory sheets that the sales managers hold on to in order to track direct profit. I saw pretty much exactly what they paid for the car, and convinced him that the offer was realistic, and they took it.

I wouldn't throw your girlfriend into a store by herself, because it's likely she'll get taken advantage of unless she's really car savvy or really a hardball negotiator by nature. You need to be there as a voice of reason and to help her get a good deal on the car. Just remember, you can always walk out and go to another dealer, explain to them that the last dealer wouldn't give you xxx deal, and they'll understand how serious you are and probably sell you the car you want at the price you want.

[Apoc]

Honestly? Ask someone who has bought new (like an awnry dad) to go with you. They're going to try and push you around because you're younger and you're buying it for a chick. Unless you've had experience on how little you really have to take and how much you can really push them around they're really going to do everything they can to take advantage of you.

Expect to be there two hours and expect them to come back to you at least 3 times with marginally better offers. They leave you sitting alone for awhile as a power play but you need to establish a bit of authority of your own. Probably the biggest thing to remember is you have to be willing to call their bluff and walk away.

[HAULN-SS]

Yeah - whatever you do, don't let her buy it by herself. Every girl I've known that bought a car on their own either got screwed on the price, or screwed on the terms.

You're probably more likely to get a better deal at the end of the month - as they'll want to get the sale to complete their monthly quotas. I agree that walking out, and holding your ground is the best strategy - and you're more likely to negotiate on the monthly cost, than the final price. You don't want to get to a satisfiable monthly price, then all of a sudden have a 8% interest rate or something and have them say "we gave you the price you wanted, we can't control the financing" because that's bullshit, most large dealerships do in house financing, and can control that a lot. Just pick a goal of a final price that's good to you ahead of time, and figure out what the principle and interest would be so you don't get screwed come sell time later on, by paying too much on interest and having a bunch of principle left over.

[Feersty]

FYI: I don't know if you are a Costco member, but you can register with them, and get new cars at several hundred dollars over invoice. My parents did this recently when they got a 2007 Civic sedan in Borrego Beige.

[HAULN-SS]

oh yeah - don't let them sell you a car other than the one you've test driven. Some dealerships will try to sell you a car their bringing in from another dealership, or one with less options, etc. Trivial options such as spoilers or other "single" options are lame things for them to try to nail you on. "only 360$" for the option could add 8 - 10$ to your monthly payment, which is lame.

[Dave]

Edit: Previous post was a little bitter.

As was said, now is a good time to get decent deals on last year's models. However, this also means it's depreciated considerably already, so that's kinda your own judgement call.
Define for yourself what the perfect car would be, negotiate price on anything that makes it not your perfect car. Don't let them charge you for accessories you don't want.
Be prepared to walk out if they aren't giving you decent deals. There's always another dealer out there.

[John]

This is actually a good time of year to buy as most dealers are trying to liquidate their 07 inventory, so you can likely find vehicles below invoice. We bought a Mazda 3S last week and nailed down 1.0% financing and a good deal, so I can't complain.

[Apoc]

One thing I forgot... Some dealers have "internet only no haggle specials" on their websites or other car listing sites. They're usually near invoice and the upfront pricing allows you to compare to edmunds TMV and comparables. If you find a price you can swallow then you don't have to worry about haggling. We did this for the wife's brand new Mazda3 and was really the only reason I was okay with buying new.

[Evan]

every dealer ive been to has a "no negotiation" policy that is bullshit. Basically they take $200 off sticker price and pretend its a good deal. Of course when you tell them to piss off all of the sudden they start negotiating.

as far as buying the car itself, Im not sure what kind of info you need.
Ive gotten stellar deals on both new vehicles Ive purchased and one new vehicle I did all the dealing for a friend. Its not hard, you just have to know what is a reasonable target price and come into it informed and assertive. Figure out what you want before you go in to buy it. So if she doesnt know which model, go test drive a bunch and decide. GO HOME. Price out the car at invoice, TMV etc, establish a target price (dont forget options)
and then go out to do the haggling, buying
try to use email to get quotes. most dealers will just try to get you to come in in person, but my first new car i lucked out and got a great quote over email.

Usually I shoot for a few hundred above invoice. ~$500 or less. (But dont feel too bad about going up to $800) Using edmunds TMV is ok, but you should go for less than that. Depends on the car and market of course. Somewhere between TMV and invoice should be fine. maybe with 07 blowout cars this month you may even be able to hit invoice or slightly lower depending on the car. i wouldnt count on it 100% though, the whole "september is a great month to buy cars" has just turned up demand and I havent seen much better deals during this time like it used to be. kind of like outlet stores. everyone flocked to them for 'good deals' so then they just raised prices.

Im assuming you know the basics like dont let them negotiate to a monthly payment or pull out the "4 square" shit. Its always best to come in with your own loan. All 3 times Ive come in with an eloan loan and they have beaten the interest rate by .5%
and of course dont tell them how much your loan is approved for.


</braindump>

[John]

Also like to note that Mazda has a narrower margin between MSRP and invoice cost - usually around 6-8%. Most other manufacturers don't do that...

[Mike]

as evan said, find what they paid and offer them a few hundred over that... if they don't agree, walk out. unless the car is a very hot seller, they'll want to make that sale. their biggest no-no is letting you walk out without a car... use that to your advantage.

[Ginger]

She'll be financing through a credit union... probably through my tag with NFCU. I don't think it will net the best rate, but I know that there's no chance of getting screwed on that court. So that's one less thing to think about at the dealerships.

I'm getting her to make a list of requirements for the vehicle. From there we'll make a list of features the car has to have, and which cars satisfy that list. Hopefully we'll have a car nailed down before we even go shopping. I'll be there with her the entire way and since it's not my money I've really got no problem standing up and leaving if I don't feel like we're being dealt with fairly. I like your idea, Chris, I think it would be great to take my Dad along.

Evan - what is the "4 square" stuff?

Several folks here have new Mazda 3's - those would definitely satisfy her (current) short list) - what do you all think of them? Has anybody owned one long enough to talk about long term reliability?

This is great advice, keep it coming.

[Mike]

Can't go wrong with the Mazda 3. I haven't driven one or owned one, but I've read enough and heard enough good stories about them to know I'm OK with Caitlin buying one in the near future.

[.RJ]

Evan - what is the "4 square" stuff?

Its a marketing ploy they use when trying to get you to finance through the dealership. It works on people that come in and say "I want to spend xxx per month" so they really hose them on interest.

If you come in to the dealership, know what you want, know what you want to pay for it and already have your financing you're on the ball.

[Apoc]

+1 for Mazda 3. It's a chick car but one I don't mind driving if necessary. It's really hard to go wrong with FWD, 5 doors and an OEM satellite install.

Another thing I forgot... if they owe you anything like user manual or wheel locks, make sure you get in writing as part of the purchase agreement. If all you have is a verbal arrangement that they'll "order them for you" there's no guarantee you're going to get those things after you sign the papers.

[G.Irish]

Also be aware that some salesmen are trained on how to divide and conquer when a boyfriend, spouse, brother, etc. comes in with a woman. Some will try to force you out and talk only directly to the woman because she is the 'decision maker' others will try to buddy up to you in order to distract.

Oh, and when dealers try to make you wait while they 'work the numbers' they are stalling because they know their chances improve, the more time you spend there. So, set a time limit when you walk in. If they don't have the deal done to your satisfaction by that time move on.

Another thing to research when buying new is how often is the scheduled maintenance and how much it costs. Some of the new cars go all the way out to 100k miles before you need to change the timing belt, others are at the standard 60k so that might be something to consider.

[.RJ]

set a time limit when you walk in. If they don't have the deal done to your satisfaction by that time move on.

Thats a good idea :thumbup: