I'm going to buy a new car in about a week and a half. This will be the first time I've ever negotiated a new car purchase. I've been doing some research on it, but of course it's always helpful to lean on the infinite wisdom of CF.net. I'm going to buy a Mini Cooper hardtop base model 2010. It looks like this: $18,800 Base MSRP $1,250 Convenience Package (garage door opener, keyless entry, auto-dimming rear-view, rain sensor and auto headlight, center armrest) $250 Bluetooth and USB/Ipod $700 Destination Charge $21,000 Total Suggested Price From there, if I want to buy floormats and the phantom footprint, that's listed as another $400 (I don't know why they want to handle these separate from the car itself). They've already offered a discount of the wholesale price of the convenience package, $1,125. So, adjusting the price for these things, it is $20,275. Then, there will be about $1,700 in taxes, documentary fee, license fee, title fee, state inspection fee, and e-tag. I also intend to put on a sport stripe at the dealership, which the salesman estimated at $300. According to Yahoo Auto, the invoice price is $16,920. Adding to that the wholesale price of the convenience package and $225 for the bluetooth (looks like the retail price is a 10% markup from wholesale) and the $700 destination charge, would mean the dealer paid $18,970 for this vehicle. But they will be reimbursed for at least part of the convenience package discount, and I've heard something about a "holdback" mechanism where dealers are paid back some of the invoice price -- don't yet know much about that. Also according to Yahoo, the national average sale price is $17,896 without options. If you added the retail value of my options, the price would be $19,396. I'm not sure if that includes the destination charge. According to edmunds.com's True Market Value tool, the average sale price of this car with options, adjusted for location (+$233) and color (+$0), is $20,386. For sake of completeness, I'm trading in my car that qualifies for the AirCheck Texas voucher that will pay the dealer $3k -- so the trade-in value is firm. And, the financing would be through the Mini at the incentive rate of 1.9%. The salesman has indicated he can move a little on the price, but not a lot, saying he certainly couldn't move $1,000. And, I might be interested in buying an extension on the warranty, but I don't know any details on this yet. To recap: MSRP: $21,000 Offered Sales Price After Discount: $19,875 Invoice: $18,970 Yahoo Avg Sales Price: $19,396 Edmunds Avg Sales Price: $20,386 So, knowing all of this, what's my opening bid? What's my strategy? What's an acceptable final price? Is there anything he can give me that won't affect his commission?
[old man voice] Remember the time when you could ask a question and get a serious answer? Pepperidge Farm remembers. [end of man voice]
Check out truecar.com for car pricing details. They hook you up with local dealers offering their quoted price. Also, check out the carspace message boards through edmunds.com. You can get a guage for what other people have recently paid for the said make/model/options. Also, incentives and rebates can change monthly, so use edmunds to find out what incentives/rebates are available to the dealer when they sell a car. Sometimes the special finance rate can't be combined with certain incentives, so figure out your cost with the low rate only, and with bank financing and additional incentives.
Don't negotiate in person if you are not well suited for that. Try and negotiate with their Internet Sales team via email. It will keep things impersonal and you can get a better deal. My friend who owns a Ford Dealership in town tells me that the Internet Sales division on average for them has the lowest profitability percentage per vehicle when it comes to their sales. Basically the buyer negotiates everything online from sale price to financing and just walks in and picks up the key.
My strategy for buying a new car was estimating what was the low end of reasonable offer for the car with the options I wanted and emailing the internet sales teams of multiple dealerships. Ask for the 'price out the door' (final cost including all options/fees/taxes). Get a reasonable offer in writing (/email) and send that out to other dealerships asking them to match/beat the offer. I got the dealerships to bid against each other. Another consideration is that some dealerships have benefits that aren't included in the cost of the car. For instance my dad got free oil changes for life at the dealership where he bought his car. Just a heads up, a great time to buy a car is later in the year before the new model year comes out, i.e. September/October. Dealers are looking to get rid of all their soon-to-be-outdated inventory.
Tip 1: Do not buy the extended warranty from the dealer. It's going to be much more expensive than an aftermarket warranty. Tip 2: When he tells you he can't move much on the price and writes down a number on a piece of paper, circle it for him and write "LOL" and pass it back. Tip 3: If he starts using the four square negotiating tactic, take the paper from him and tell him you don't want to play magic numbers, you want the car at this price. "....." He'll keep dancing with you, but if you believe the price you quoted is fair based on the research you've done, present that to him and tell him to talk to his sales manager. Tell him flat out, this is my price and if we make that happen I'll do the deal today. If not, I leave. If he doesn't make it happen, leave. If he gets it close but says "I can only make this offer for today..." hem and haw for a few minutes and say, well "you missed my number, so I need to go home and think about it." Call him back the next day late in the day if he hasn't called you, and tell him over the phone, "I need you to get the extra....."
Don't buy new, find the same care with extremly low miles...and don't by extended warranty....waste of $$ if you must buy new, start off at $17.5K Be firm and be willing to walk away and don't cave just because you've been there all day...if no one can help you in the first 10 minutes with your offer, leave and they'll call you back...
like mentioned above the best course of action is emailing the internet manager and getting them to compete with other dealership offers, if you go into the dealership im sure they will try to pull some bs with you and waste your time eg: the 4 square bs. id offer 19.5k.
Don't play the four square game. That's fairly basic. What they are doing now is to start with the accessories price on the side and the car price on one line and then the accessories on a different line and then the documentation fees (BOGUS DO NOT PAY FOR THESE) tax title and license fees (not bogus, non negotiable) and then present a total. Then when you balk at one of the prices (say the accessories) they come back with a different form and the accessories price is gone, they have rolled it into the car price and pumped the other things up so that it looks like you got the accessories rolled into the price of the car. Be really careful with these guys. Good news is there is no dealer holdback on the Mini Cooper so if you find invoice, it really is invoice. Invoice + Destination = Dealer's Cost Call a local mechanic that specializes in Mini Coopers and ask him for a quote on these after market accessories. That is the MAX you should pay at a dealer because you can simply say NO THANKS and take the new car over to the mechanic and have him install it for that quoted price. NEVER buy the mop and glow. http://www.car-buying-strategies.com/2010_Pricing/mini-cooper-prices.html http://www.carbuyingtips.com/ This one is really good.
Buy it over the internet. When I got my Honda Odyssey a few years ago, I simply did a search of Honda dealers in Central Texas (I live in Austin) and asked for their best internet price. Played them off against each other, as in... "Look, so and so in San Antonio is offering the same van for this number, which is lower than yours. Can you beat it?" I ended up getting it in SA, although I didn't really want to, since it meant a drive, but I saved a lot of money. Also, I checked prices at Houston dealers, since I go there frequently, and the price in San Antonio compared well. You just exchange e-mails. That's a sweet ride, JV. Good luck!
We bought a certified pre-owned vehicle a few months ago and here's what I learned from my research (basically what everyone here's already said). Negotiate upwards from the invoice price (plus destination fees) and not the MSRP, which I think is a given and 99% of the people know to do this. Once you get into the Finance office, here's where they really start to apply the pressure. It is illegal for them to offer you an interest rate that is conditional to you buying extended warranties, prepaid maintenance, lojack crap or anything else. If you qualify for a rate, from what I have read, they have to give that to you without you purchasing anything extra. Our finance person tried to give us a low interest rate only if we bought dealer extras. Bump that. I would only purchase a warranty from the dealer after you have shopped around for third party warranties and the dealer is able to beat those prices. Your sweet spot for the Mini should be a price that is comparable to vehicles selling in your region with similiar options, probably a few percentage points higher than dealer cost. I think getting it right at dealer cost is unlikely for a Mini, though it would be terrific for you. What's tricky is getting a good sense for the cost of accessories and adding this to invoice price+destination charges. Remember, you hold the ultimate leverage since you can walk out the second you feel uncomfortable. Edmunds and carbuyingtips.com were good tools for us. We were concerned mainly for price so we walked in with Excel formulas ready to calculate our monthly cost, overall cost, interest charges, etc the minute they change any of the variables around. Good luck!
You didn't mention a trade in vehicle but if you plan on trading one in, go to Car Max first and let them give you an offer. It is almost always the blue book wholesale offer, but it is good for a week and will be the low bar of the dealer goes crazy on your trade in price. If you do negotiate the trade in, do it separately from the other negotiation. Don't try to negotiate two things at once. Do the trade in, shake on it and don't let them try and change it when you start to low ball them on the new car.
Agreed with everyone who has said to negotiate with the internet sales manager... (although some of these in-person negotiating techniques sound entertaining). Negotiating online saves so much time, headaches, etc.... it is completely worth it.
If you can't/won't negotiate with the internet sales manager (which, I agree with others, is a GREAT way to deal), you have to walk in to the dealership ready to be polite but firm in your dealings. You have to remember that YOU dictate terms, not the salesperson. No four-square garbage, no "let me ask my manager" games, etc. One of the tactics salespeople use is to try to set a deadline, getting you to "buy today". Turn the tables on them, like my wife (the absolute master at car dealings) did: http://bbs.clutchfans.net/showpost.php?p=5081297&postcount=25 I almost felt sorry for the salesman. Almost. :grin:
