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I don't worry about the breakdown. I have a price I'm willing to pay which I get from KBB and CarGurus, because let's be honest I'm not a flipping wholesaler. I add on tax and registration.
I go to the dealer with that and I don't care how they get there, that's my out the door price, end of story, no bull.
As far as I am concerned if Jesus Christ gave them the car for free and they are clearing a full profit good for them. I don't care how they are paying taxes or structuring fees. I have a price I'm willing to pay and that's that.
I didn't spend much time on this system, and I have paid 20% less than KBB every time for quality used cars. One thing I do is I don't waste dealer time or insult them. I tell them "this is my number, and I respect your time, so if you disagree, Godspeed to you, but if you find something that meets my criteria, give me a call. I'm going with the first person who can get me under a hundred thousand miles for under $x."
Quote:
Would the $5000 trade in amount come off the $35000 number before taxes and fees OR does the $5000 come off the end number (taxes and fees)?
Dude, if you start doing complicated tax math with these people they'll run circles around you. Just say "this much for the trade in, no less, no haggling" and "this much for the car, no less, no haggling", give them your number and leave. Save some time.
There must be a lot of real geniuses here because they somehow know the cost of production of every part, the overhead of every dealer and much more and therefore can come up with "a number" that is "their number".
In New England (I live multiple places), I find getting a used car from an individual to be a great deal....we have a smaller percentage of scammers. But elsewhere - watch out! Guys are running used car lots out of regular houses in the burbs!
I'm from the olden times when you usually sold a car between 70 and 90K - got the most money for it and also avoided a lot of service that used to start at about 100K.
But things are different now. My 2010 Passat with 120K is as good as new in virtually every way (comfort, lack of noise, etc.).
Still, I am likely to always buy new - especially when you can get 10+ years out of a car.
If I am looking at buying a new car, what's the best time to test drive it? Before starting any negotiation on price? How do I convince the dealer that I am a serious customer and would like a decent test drive? How does it work if I am communicating with them through emails?
I don't know how to deal with a nefarious dealer, which is another reason Tesla will win, and why NADA fights Tesla with State laws that prevent manufacturers from selling cars.
If you don't have a trade-in and are buying cash or with a loan from your bank, the transactions are quite simple.
I go to Edmunds.com and similar sites which show me what others have paid EXACTLY for the same car...in my area. They show a low, a high and an average. A typical car is something like this....
OK, so the avg buyer paid 26.6 - only $500 more than the lowest one...and the lowest often is the result of some dude who is - let's face it - a much bigger A-Hole than most of us want to be.
So - I take the view that if I can get the car for less than Average, I am happy. So if 26,400 is a price the dealer and I can live with, I rest easy knowing I paid less than most.
People who waste others time (yes, even car dealers) to play games are not high on my list. That is why I like using the internet and similar methods to finalize any such transaction.
Most people don't like the game - that's why Saturn and some other companies started with the "no haggle" pricing. Think about it - why should someone be rewarded for being an a-hole and hassling the sales people? It doesn't make sense.
My cash is as good as any. Give me a decent price and I'm happy.....
FYI - actual profit car dealers make on new cars is very very small. The money is in a bunch of thing like
service
used cars
extras - a loaded car brings BIG time more profit to the dealer
factory incentives - all kinds of programs from the makers - but these are 1% or so....or small in any case.
Rest assured the car dealer is not making 10K on that 30K car you are buying. In fact, the actual profit margin as a % is extremely low on new cars - the customer is getting the car at a price not too much over the cost of production.
This is a very rational/realistic post.
On most cars the difference from invoice to MSRP is around 10%. The dealer pays interest on new cars that are on the lot after a set period (usually 30 days and called floor plan) and gets money back from the manufacturer for each car sold. Hence, you can buy a new car at invoice and the dealer gets a "kickback" from the manufacturer and additional income from providing financing and charging a doc fee. Plus, any add-ons you may choose. Such as extended warranties, paint treatments, security features...
If the manufacturer is looking to move (new) product at year end, they may offer rebates. Usually on vehicles that have been over-produced. That is why you sometimes see trucks and SUVs advertised for far below invoice this time of year.
As far as used vehicles go, it really makes no difference what the dealer paid. The buyers job is to determine fair value and try and buy the vehicle for that price or below, plus TTL and usually a "doc" fee. And get the best financing deal possible. Shop around for both the vehicle and financing.
Do a search for 'auto cheat sheet' new car. The writer does a splendid job of explaining the dealer incentive and physical cost to dealer. As I relayed earlier most are not working the negotiations from the base price . Just because 100 ppl in the area bought a car around 22k doesn't mean that those 100 folks got the best deal. They simply all made the same mistake .
Buying 101. Start from the true cost price,not sticker ,not some blue book rate.
Dealer will show you (invoice inflated..(Destination charge,dealer prep) .
Example (fictitious for example purpose) true cost of dealer on a total Camry (minimum bells/whistles). 17299.00 but sticker will say 25785. There is a 8000 gap. So they work from the 25785 and knock off numbers while you should be working as close to the dealer true cost #. To all those profit driven dealer loyal customers,sure a 12% markup from the 17k is a fair business margin.
Car dealers are banking on you working down from sticker and not working from true cost.
Our state deducts trade in cost before subtotalling for taxes.
Read every line item .
The real problem is finding the dealer's "true cost", holdback and incentive. We used to be able to get "invoice cost" and work from that, but dealers have gotten smarter about hiding that information.
Here's an example:
$22,239.00 = Sticker price of new car
$20,839.00 = Factory invoice
-$444.78 Subtract dealer holdback (2% of MSRP *amount varies)
-$1,000.00 Subtract dealer incentive ($1,000 factory to dealer incentive)
$19,394.22 = True dealer's net new car cost
I don't know how to deal with a nefarious dealer, which is another reason Tesla will win, and why NADA fights Tesla with State laws that prevent manufacturers from selling cars.
Aside from your idea an entire company’s success is based on the fact you don’t know how to do something, this is where Tesla has successfully suckered you.
Haggling with a franchized dealership is 100% optional. If you want to pay full MSRP, no haggling is necessary. Walk right in, drop full MSRP in their lap, and drive away in your new ride.
Tesla just gives you no choice but pay full MSRP and you’re cool with it because they never gave you an option to haggle in the first place.
What bothers you isn’t the price of the car itself, but the fact you may not get the best possible deal. What Tesla has successfully done is tricked you into thinking you got the best deal when really you’re paying them full MSRP with a smile on your face. Tesla isn’t doing this to help you out, but to pit your competitive nature against yourself in order to maximize their profit.
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