Free Web Counter

 

 

Car Buying Tips

The following article was submitted by Jeff (username sauceman) on ACURAZINE.com. We thank him for allowing us to post it on OCDetails as a valuable resource and wonderful addition to the site.  Thanks Jeff!

Hey folks.

It's a source of worries to some, it's an obsession to others, you want the best deal for your TSX. You want it badly, and it's not the easiest or the most fun event of the year when you have to negotiate.

You can enter the dealership with a few weapons of your own that will help counter professional salespeople's tactics, help you get the best of them, and make your negotiating experience, if not a fun one, at least a basis for bragging about your brand new car.

With the crucial help of a good friend, Rotarybzzz from Los Angeles, and a few online sites as well, here is a thread with a few tips on how to optimize your next negotiations for the brand new Acura you are longing for. 

Bringing Together And Fine-Tuning Your Weapons

The first thing you should realize is that cars are a demand-type item. First in line will pay the most when new models come out. Generally, there is a gentleman's agreement among the dealerships. The higher-end brands anyway, for example, Acura, BMW, etc. They have pretty much decided to "hold the line" when it comes to negotiating prices. That's why many of you shouldn't be upset with some dealers "not wanting to deal" on the new TSX, because that is what the General Manager has dictated. Best plan: wait a little while... a few months at least after a new car gets introduced to the market. You will see some dealers faltering on holding the line. Early on, the most you can expect is getting a few freebies... wheel-locks, cargo net... the cheap stuff. But you will still pay MSRP (or thereabouts). Why? Because they can get the price theyíre asking from the next guy waiting in line after you.


So you've realized the best time to go is after a few months after the release, at least. There are two better periods of the year that can be considered as prime buying time: 1. The two last weeks of December, when everyone is shopping gifts for Christmas, leaving new car dealer lots void of customers, motivating dealers to cut costs, and break year end sales records. There is also the period between July and October when in general dealers are making way for new year models. Secret factory-to-dealer incentives can get pretty important. Many dealers will choose to renounce to a part of that incentive to get some volume going.

Now, letís narrow down to a specific time of the month.

Many of you have heard that the best time to buy a car is "the end of the month", right? Well, let me spell it out for you. It isn't the end of the month per se... it is the 30th. Period. The 30th. Not the 29th. Not the 31st. Itís the 30th. The selling cycle for ALL dealerships ends the 30th of the month. A salesman's / finance guy's / general manager's / district manager's pay check is cut based off volume between the end of the preceding month and the 30th. Thus the 30th is a powerful day indeed... We will discuss more on this later.
You must also remember that dealerships are competing with each other for incentives and bonuses from the Mother Manufacturer (a.k.a. Honda, Toyota, Ford etc). That's why some dealerships can afford to do things with prices that others won't touch. They're making money in doing volume (moving metal as I call it) not in the money made per vehicle. So, find the volume dealer in your area and go on the 30th.
Now you know that waiting until the end of the month is a good ploy. Well, here's another one:

So you've decided to buy NEW. First thing you can do besides going on the 30th of the month is scan the newspapers in the classifieds. Look for the dealers advertising a "set price" for a new car / cars. This can be the big page ads or they can be just a small column. scan, pan and look for a set advertised price.

Now the thing with these ads is that most cars and most "set-prices" just about suck. But sometimes you can find what dealers call "the ad car". The "ad car" is a draw car that dealers will use as a loss leader to draw people into the store (especially during the holidays). They want to push deals and are willing to take a much smaller profit (or even a loss) on this car to get people in the door. This is exactly why I say to go to the volume dealer in your area, simply because the smaller dealers making less money per car donít do these things! Think about it: which dealership can afford to do this? The one with 500 cars per month or 50?

Anyway, you can use the "ad car ad" by 1) buying the actual car or 2) use it as a counter at another dealership. Some might say "those ad cars don't exist" or "those aren't real cars" but, they are.

This is something you'll want to pull out after discussing the terms of the deal. Itís kind of like fishing for their best price then...BAM...show them the best price you found in the newspaper. This really works with Honda/Acura. They always have lots of advertising deals. You want to find the best price and then go to the place that says "we will beat any price". One caution though: You must be sure the model numbers match up for the car youíre talking about. For example, in the case of Acura a "415" meant an Integra with a stick and cloth and a "446" meant an Integra with leather and an automatic (I might be wrong on the exact numbers, but you see the point). These numbers are almost always printed at the bottom of the ad.

In terms of actually bargaining with the dealers, many times people think that the dealership always want the customer to pay cash out-the-door today and not finance. That is not completely correct. The dealership actually wants you (with at least fair credit) to finance your car because this is another revenue stream to make money on. Not really a whole lot, but a good enough percent.

Making Contact With The Dealer

You can adopt a few strategies in the way youíll make the first contact with your dealer: 1) You can meet him in person, 2) You can establish contact by phone, and you can 3) make a fax attack (or e-mail as well)

Letís start by the last option: The Fax Attack. This method consists of engaging numerous dealers in a bidding contest against one another for your clientele. Fax each manager you have chosen a complete description of the car model with equipment you want and ask them that they respond you with their best price quote. Enter round two by asking each dealer who will beat the best price you have been given round one. Some will better the offer, some will bail out. Repeat the process until you have one dealer sticking out with your price.

This method has the advantage of being not particularly time consuming while imposing the work of negotiating to the dealer, while you almost sit back and look at the results go. Itís next best to buying a car on e-bay.

Second option: The Phone Call. When calling the dealer, ask for the sales manager. Then you can ask something along the lines of, ďIím ready to offer you 24,800$ for your SSM TSX 6MT non-navi, and not a nickel more. If itís ok with you, Iíll be there in a half hour with a certified checkĒ. (Obviously, the financing preparation will have to be arranged with your bank beforehand). The dealer will either say no, or make a counter-offer.

Then again, it is a pretty straight-forward method, and it gives you the advantage of not dealing face-to-face, giving you control over the situation.

You can also follow the most common and maybe most arduous method, but also the one where you can get more creative, meeting face to face with your dealer.
Your first visit should not be the time when you make an offer, especially if you are not close to the 30th. Simply ask for the ďout-the-doorĒ price, namely the price + sales tax + all fees and charges. When you get back home, set yourself a target price at which youíll buy the car. For this youíll have to be pretty well informed of the best deals out there, and a site like this one will be pretty useful, as there are always members whoíll be willing to tell you the ďgreat dealĒ they made with a specific car model.

Remember that any time where you feel pressure or feel you are not controlling the situation, you can walk away and give yourself some time to think. The dealer is not the boss, you are. It can be a pretty powerful way for you to get better terms offered as well.

You should make it clear that you do not wish to discuss financing right away. There are three phases of negotiation, and financing is the last one. If you get pressured about this issue, simply say that money will not be an issue, and if you have a good credit score at hand, you can even show him, but not more. Phase 1 of the negotiation is dealing the actual car. Phase 2, if you are trading in, is dealing the trade-in. Then, when you have agreed with the first two phases, enter phase 3, which is negotiating your financing.

On the next visit, walk in the dealership with a folder containing quotes you amassed from other dealers. Once they see your lower new car price quotes from other dealers (assuming you went with the phone method, or partially with the fax method), you've stopped dealer sales tactics dead in their tracks. The deal will proceed on your terms, not theirs. Donít walk into a new car dealership without knowing how much you can buy your future car for. When the car dealer quotes you a price you can say "Why should I pay your price when this dealer is quoting me the same TSX for $1500 less?" Then you show them your new car price quotes in "The Folder". Salespeople in general fear "The Folder", because they know you did your homework. They rely on car buyers who don't research their car buying. Do this as long as you actually have something to show for in that folder!
When you feel you finally got the most out of your sales rep, you could still get a better deal. You can do two things: If you still have a few days before you hit the 30th, leave the dealership and tell them you need some more thinking, you were expecting a little better (hopefully your set price or better yet), etc. If they have met your price objective, you can give it a shot at a little better, depending on how much of a rebate theyíve already consented to you. There you must be careful not to come out as being unreasonable and unrealistic, youíll lose credibility.

Return on your 3rd visit on the 30th, and check in with your sales person (if he hasnít already called you), and see if he has something yet better to offer you. Be at all times calm and polite! Use the British method of ďwait and seeĒ. You English folks have an advantage over Latino people. You are cool, calm and slow to show any response. A typical English person will drive a Latino crazy. You say nothing, and heíll hopefully start scrambling to get a response from you. If you wait long enough, heíll engage in giving you all the leeway he has, maybe even more, who knows? If you are a Latino buying from an English person, try to beat him at his play, you will have the chance to destabilize him. This negotiation technique is valid for just about any type of selling, by the way.

So then again, your sales rep has given you all heís got. Itís time to get a little more ruthless, and call in the sales manager. Tell the sales manager you have a discrepancy between both of your offers. Ask him what he can do about it. Remember this is the 30th, and though this will not automatically yield you more, it just might work on a the last day to make the numbers.

There are doís, and Iíve shown a few of them, but there are many more Iím sure that I donít know of. Negotiation is limited only by creativity. But there are definite donít doís. Here goes.

The Donít Doís

- No use lying about what the condition of your trade-in car is, theyíll check it, and if they find out your trying to scam them, youíll never get a good price from them.
- Donít put down a deposit until you are sure you are actually buying a car. If you try and re-negotiate after the deposit has been done, you will not get much more than an angry salesperson on your back. You wouldnít want someone to do it to you, so donít do it yourself.
- Don't lie about your income or debt load. They run your credit report to verify it.
- Don't make an unreasonable offer. Youíll get dismissed quickly. You need to know what invoice is to base your offer on. Itís not to say you canít get the car under invoice, but you donít want to be offering ridiculously low either.
- Don't spout off how the salesperson is making $3000 on the deal. If you're getting a super low deal, the salesperson is probably getting $100 max.
- Don't be rude when it comes to the low rebate or the ultra low APR, you either get one or the other.

My Ally, My Enemy

Many times, people automatically believe they will automatically get a good deal if they have a family member or friend working at the dealership (sales or service).
I cannot agree with this most of the time. It really depends on what your buying and how you work it, and here's why:
One philosophy that is encountered many times throughout dealers is that some dealers, especially lower-end marques (for example: Ford, GMC, Toyota), sometimes hire anybody with a pulse. Basically, those dealers will hire that person, even if that person has no potential to sell because they not only hire the individual, they hire that persons' network of friends, family and ex-coworkers.
Why? Here's what I mean....
You have unemployed "Ed" who starts working for Chevy. Being the bumbling idiot he is (and given the nature of the car business) he sells 7 cars the two months he was working there. He was a wash-out. However if you broke those 7 cars sales down into who bought them, it went like this:
- 3 to his immediate family (uncle Jeb, uncle Bob and his brother John)
- 2 to good friends
- 2 to friends of friends
All these people were under the understanding that they would get a deal. Did they? Well maybe. But what really happened was that the dealership was paying this guy (essentially) minimum wage to steer 7 people who bought 7 cars from their lot. The dealership made money on the financing, on the deal and put 7 cars toward their incentive volume from the mother manufacturer. Not only that, the dealership has the potential to have 7 service-relationships with 7 new owners, 7 new patrons who are probably going to go to that dealership for service (per warranty tom-foolery) for at least 3 years to come to do oil changes, adjustments, tune-ups, you name it.

At the same time, there is a limit as to just what the dealership will do for the employee. Talking high-end brands, a deal as a typical Acura salesman would be $100 over invoice on any Acura (except the "hot cars" like the TL). However, that is much worst than anyone could get by doing the newspaper routine. Take for example Cerritos Acura in SoCal 4 years ago: New $15,900 Integra LS were growing on trees. I don't remember the exact differential but it was like $1700 for the same car. That is a big lump of cash for a sub-20,000$ car. (You might wonder how the hell I know about whatís going on in SoCal: remember this is a thread written with a heavy contribution of a friend from over there.)
So you see car dealing and getting a ďgood deal" is very, very relative and is all about perception. You get a good deal if you think youíre getting a good deal. So, be careful before you let your friend-dealer, friend-dealership worker convince you that he can "get you a good deal". Do your internet research and scan all the area newspapers before you do anything.
 

The articles published in the Contributors section of  OCDetails.com are the property of the creator.  Reproduction is not allowed  without expressed permission from the author. Permission to reproduce other articles on OCDetails is not to be assumed to be permisison to reproduce all of them.  To obtain the authorís information to request permission,  please contact Anthony@OCDetails.com and arrangements will be made to reach them. OCDetails.com assumes no responsibility for the accuracy of these articles.

Free Web Counter
hit Counter  

[Welcome!] [OCD in SLC] [About Us] [Events] [See Our Work!] [Photos] [OCD University] [Contributors] [Car Buying Tips] [Headlight Restoration] [Theory of NOW] [2005 Legacy GT] [Guestbook]

Pass us on: