Try not to “fall in love” with the car you’re negotiating on.

Be willing to walk out if they start playing games. I’ve had a Kia sales person and his sales manager follow me into the parking lot, practically begging me to come back inside and continue with the ridiculous shell game they were trying with negotiation on price, extended warranty, and dealer add-ons. I’ve had a Subaru sales manager tell me he couldn’t give me the drive out price on a cash deal (only the finance guy could do that) because he wasn’t “licensed to talk about taxes”. Bull shit. They just want to renegotiate the deal multiple times to screw you a little more at every step. It seems to me that foreign car dealerships are more prone to these tactics than American brand dealerships.

They all need to sell a vehicle worse than I need to buy one.

This message has been edited. Last edited by: arfmel,

As said above the “invoice price” IS NOT the dealers cost. Their actual cost is much less.

As an example I’m buying a 2020 Jeep Gladiator, which is a new model in high demand, for 5% BELOW invoice...

The local dealers were trying to sell for $2000 above MSRP....I just laughed and went to another dealer who was more interested in volume sales...

Super lowball the price and tell them you will let them finance. They will give you something like 5.9% Immediately refinance through your bank.

quote:

Originally posted by Oz_Shadow:
Super lowball the price and tell them you will let them finance. They will give you something like 5.9% Immediately refinance through your bank.

I like that idea but is there anything in the loan agreement that says you can’t do that. We do know they’re sneaky bastards.

quote:

Originally posted by PowerSurge:

Deal with the dealership’s internet salesperson via email. And email several dealerships and tell them you want their best price.

Something I just learned about doing this, I wish I had though about it before my wife's recent purchase of a new RAV4 Hybrid: Get a free email address that you will use for this purpose only, and then after the car purchase is complete, just dump this address.

I did not do that, I stupidly used my regular email address, and it is swamped by follow-up emails from dealers who persist in emailing, even though I tell them that "the purchase has been made and thank you for the follow-up."

quote:

Originally posted by PowerSurge:
Deal with the dealership’s internet salesperson via email. And email several dealerships and tell them you want their best price. Don’t deal with the lot lizards. Period.

This. When I bought my last car I walked in with several offers from surrounding dealerships and held my phone up and said I have emails from all your competitors, you have one chance to beat it. He did.

quote:

Originally posted by smlsig:
As said above the “invoice price” IS NOT the dealers cost. Their actual cost is much less.

As an example I’m buying a 2020 Jeep Gladiator, which is a new model in high demand, for 5% BELOW invoice...

The local dealers were trying to sell for $2000 above MSRP....I just laughed and went to another dealer who was more interested in volume sales...

And, some of the time, even a good amount of the time, the dealerships actual cost is more than invoice on some vehicles. The longer they sit on the dealers lot the more they cost the dealer. Sure there is 3% hold back from invoice, which means they initially get the vehicle for 3% below invoice when it first gets to the lot. BUT, if they don't sell it in 30 days (normally) they're paying 1% interest on that vehicle a month, then you have the cost of getting all of the shipping stuff off of it, detailing it, insuring it, mechanic to check it, having it washed once a week, all of the location expenses (building rent/mortgage, electric, insurance, staff, and on and on). Car dealers need to make money to stay in business, and it surely isn't in new car sales, but that's the costliest side of the business.....they put out millions and millions of dollars on inventory, to make pennies on the dollar. New car sales generally makes up 10% of a dealerships income. Then do you have any idea what a dealerships insurance cost is to let any Tom, Dick, and Harry with a driver's license test drive their new vehicles? Plus the salesman has to make a living that's actually taking his time to show you the new cars and let you test drive them.

AND NO, the dealership didn't sell you a new 2020 Jeep Gladiator for 5% below invoice, they'd be paying you to buy the vehicle and losing money on a new model and new model year. Isn't happening, there are incentives/rebates involved bringing the price down which you're not aware of.

Generally a very fair price for both dealership and buyer is somewhere in the neighborhood of $300-1000 above invoice depending on the sticker price of normal cars ($20-70k). If you know exactly the made/model/and options you want, emailing several dealers is a good way to get a very good price. Negotiating in person can be as well, but takes more time and effort and if you're honest with the salesman (about purchase time line, trade in, credit, etc.) they'll generally be honest with you and not play games, but will try to hold profit and you'll have to negotiate.

I worked in a Ford, Lincoln Mercury dealership for a year in sales. My brother currently works in a Ford dealership and his GF's dad is the owner/GM and another friend has been a long term salesman at Infinity dealer (over 20 years).

quote:

Originally posted by KevinCW:

quote:

Originally posted by James in Denver:
No offense if there are car salesmen or car lot owners here, but that "high pressure" sales while you're sitting with the financing agent sucks.

30 mins of "are you sure you don't want the extended warranty?"...

DUDE, we said no 30 mins ago... finish up already.

Sorry for the thread drift.

James

Did this 6 months ago...

He asked, and we said no.

He asked again, and we said no again.

He tried to ask again, and I said literally "I said no twice, If you ask again, I'm going to walk out that door and you can keep the car. On the way out feel free to call the manager over and I'll tell him to bend over and I'll drive the car right where he can keep it."

He said "Well I'm allowed to work on the price to make you buy it"

I said, then you can make the price of the car cheaper and I wont buy it. Go talk to the manager if you have wiggle room, I dont want the warrenty and if you can't make the car price cheaper, I'm leaving."

They came down 200 bucks....

I still didn't buy the bullshit.

Bought a new Mustang. I liked the salesman and the deal I got. THEN we met with the finance manager. First sat down and he was a pleasant as they come. Then he started pushing the extended warranty. No. Then asked how we wanted to finance and I said I'm paying cash. Went from Mr. Nice guy to a rude jerk. Burned him the best I could on the follow up Email we got from the dealership. You know, the "How did we do"? questions.

I just need to test drive. Then I would be happy to order it on the net. That way, the dealer doesn't have all those expenses. Car salesmen have earned their reputation and need to take responsibility for it

quote:

Originally posted by KevinCW:


Did this 6 months ago...

He asked, and we said no.

He asked again, and we said no again.

He tried to ask again, and I said literally "I said no twice, If you ask again, I'm going to walk out that door and you can keep the car. On the way out feel free to call the manager over and I'll tell him to bend over and I'll drive the car right where he can keep it."

This is PRECISELY why I will never set foot in a regular dealership again. The scumminess, the pressure, the games. NOPE.

I only go to CarMax type retail-pricing, low-pressure car places now.

We have a local chain called CarSense and they are wonderful to deal with.

I have no time for that BS.

Shop online only, find what you want and negotiate the price before you show. Also, have your own financing done and ready to go, credit unions are a great source for this.

I found my wife's new Caddy XT4 on a dealers website at a steal, I qualified for the fine print rebates and even had a conquest rebate that the dealer didn't list, another $1,000 off. In GA, dealers advertised price has to include dealer doc fees. Guess what I told them when they tried to add $799 doc fee?

Jimmy123X I think you need to stick to boats. Your “expertise” in other areas is obvious...

quote:

Originally posted by smlsig:
Jimmy123X I think you need to stick to boats. Your “expertise” in other areas is obvious...

I was a new car salesman for a year for a Ford Lincoln Mercury dealer. I owned 1 and was partners in another small used car dealership prior to that for about 4 years, and prior to that grew up working in my fathers body shop or mechanical shop. I still have a couple of salesman that I'm friends with that still work in sales for the company I worked for. When I was in sales, I saw the invoice and breakdown of expenses of every vehicle I sold (new and used), because my commission was based off of it. Same with any add on crap that was sold in the F+I office.

My little brother is and has been a salesman for a Ford dealer for about 2 years now. His long term (6+ years) girlfriends father is the GM and part owner of the Ford dealer he works for, and has been for decades.

My buddy has been and is a salesman for the same INfiniti dealership for about 20 years now.

I get Plan D pricing and see the actual invoice of the vehicle I bought and have seen many other invoices. Plan D is invoice minus the 3% hold back.

So yes, I do actually have expertise in this area. With Ford/LM there is 3% hold back, the manufacturer fronts the vehicle to the dealer for 30/60 days, then they pay interest monthly (was 1% a month), for every 30 days the vehicle sits on the lot past the 30/60 day period OR the dealership can pay for the vehicle and not pay interest. Salesman get a small commission on a no profit deal, called a mini. Some dealerships pay a flat commission to the salesman on any vehicle sold, then the amount goes up based upon the number of units. For example, over 15 units in a month, they'll get a higher amount per vehicle or a bonus. Others pay a percentage of profit as commission as well as a $$$ bonus over so many units. There are ALL sorts of costs that dealerships face, that is allocated to each department based upon what each department uses/needs. Not to mention health insurance all sorts of other employee costs, even for commissioned salesman.

I'm a small businessman and understand that in any business, a business needs to turn a profit, and that there are all sorts of expenses a business faces. A new car dealership has a ton of expenses. I've seen the balance sheets for a couple of new car dealerships. They're not as profitable as one imagines for the amount of money they have invested in inventory. The new car section generally brings in 10% of total profit, used cars 20-25% of profit, Mechanical 30%, parts 30%, body shop 20-30%. But selling lots of new cars, keeps customers coming back for the mechanical/parts/body shop sections of the business that are most profitable.

The dealership I worked for did a lot of business. In 2002 we sold 200 cars a month, and the other departments were busy. Cars sold between $20k-70k a unit, the dealership netted just over $1 million per year. Which is nothing considering how many millions of dollars a year you're churning through in sales (including all other departments) and the location that they owned was worth over $11 million at the time and we had close 200 employees between all departments.

I agree with don't be afraid to offer less and walk away. Easiest way to get a great price is to do your research, know exactly what you want (vehicle/color/options), email several dealers that have it at further away dealerships, possibly even pit them against each other, then go from there. Once you deal with 1 person at dealership xyz, you are their customer and they get a commission or part of the commission if you buy from another salesman at that dealership, that includes the internet department. After getting all of those prices, I would go back to the initial salesman who you did test drive the vehicle with at your local store, and give him a shot to match the price or beat the lowest price of another dealer.

There are/were a TON of reasons why one car dealership will give you a better price than the other and some of them aren't even logical or pertinent to your situation. Where I worked you had to sell over 6 vehicles a month, if you didn't do that for 3 months straight, you got the axe. Sometimes good long term salesman had a bad streak and didn't make the numbers and I've seen a sales manager make just about any (reasonable) deal for that salesman to get his 3rd month over 6 units. I've seen sales managers lose money on both new and used cars that had been on the lot over 90 days, just to get them off of the books. Once in a while we'd get a color combination that just wouldn't sell, or a long term salesman ordered one for a customer and the customer backed out and it just sat there and nobody bought it. I've seen sales managers buy a used car for way too much money because the buyer is way upside down and to just make the deal work on the new car they need to unload. I've also seen them lose money on a unit or two or five at the end of the month just to make a big volume bonus that the manufacturer has that month. There are also incentives to the dealer (rebates), that the customer doesn't know about, because the manufacturer was backed up with too much inventory and needed to keep the plant running. I remember once, the dealership I worked for got $1500 incentive on every new navigator we moved that month (for example). I also remember a new left over old body style car (Lincoln town car) we had that was tricked out with vinyl roof, wheels and tires, and etc. that nobody could sell and we had it over 6 months and they sold it for an $8000 loss.

There is a lot of wiggle room. And who cares if you come across as an ass? It is just business, nothing personal.

As to how to do it, nothing beats knowing as closely as possible how much they actually pay for the car, which is not easy. List or invoice probably isn't even close to the dealer's actual cost. Offer them a few percent over that actual cost, best as you can figure it.

Be prepared to walk away. You'll quickly learn what they won't take, and be able to adjust from there. But you have to walk away from a few to be sure you actually know where the bottom is. Don't worry, there are lots of cars just like you want. They won't run out.

Make no mistake, asking for the "best price" from any car salesman, even the internet guy, will NOT get you the actual best price. Even comparing two or three best prices won't help - they all respond to that question the same. But maybe it isn't worth more effort than that to you.

quote:

Originally posted by PD:

quote:

Originally posted by Oz_Shadow:
Super lowball the price and tell them you will let them finance. They will give you something like 5.9% Immediately refinance through your bank.

I like that idea but is there anything in the loan agreement that says you can’t do that. We do know they’re sneaky bastards.

Can you read?

quote:

quote:
Originally posted by PD:
quote:
Originally posted by Oz_Shadow:
Super lowball the price and tell them you will let them finance. They will give you something like 5.9% Immediately refinance through your bank.


I like that idea but is there anything in the loan agreement that says you can’t do that. We do know they’re sneaky bastards.


Can you read?

^^^
No, is that necessary??

quote:

Originally posted by jhe888:
There is a lot of wiggle room. And who cares if you come across as an ass? It is just business, nothing personal.

As to how to do it, nothing beats knowing as closely as possible how much they actually pay for the car, which is not easy. List or invoice probably isn't even close to the dealer's actual cost. Offer them a few percent over that actual cost, best as you can figure it.

Be prepared to walk away. You'll quickly learn what they won't take, and be able to adjust from there. But you have to walk away from a few to be sure you actually know where the bottom is. Don't worry, there are lots of cars just like you want. They won't run out.

Make no mistake, asking for the "best price" from any car salesman, even the internet guy, will NOT get you the actual best price. Even comparing two or three best prices won't help - they all respond to that question the same. But maybe it isn't worth more effort than that to you.

You’ll get a lot lower price dealing with the internet salesperson and have different dealers competing against each other than you will dealing with any regular salesperson.

‘Invoice’ is a lie. There is no way to actually find out exactly what a dealership pays for a car minus holdback unless you’re blood brothers with a sales manager. Even some General Managers of dealerships couldn’t even tell you without asking one of their sales managers.

quote:

Originally posted by PowerSurge:

quote:

Originally posted by jhe888:
There is a lot of wiggle room. And who cares if you come across as an ass? It is just business, nothing personal.

As to how to do it, nothing beats knowing as closely as possible how much they actually pay for the car, which is not easy. List or invoice probably isn't even close to the dealer's actual cost. Offer them a few percent over that actual cost, best as you can figure it.

Be prepared to walk away. You'll quickly learn what they won't take, and be able to adjust from there. But you have to walk away from a few to be sure you actually know where the bottom is. Don't worry, there are lots of cars just like you want. They won't run out.

Make no mistake, asking for the "best price" from any car salesman, even the internet guy, will NOT get you the actual best price. Even comparing two or three best prices won't help - they all respond to that question the same. But maybe it isn't worth more effort than that to you.

You’ll get a lot lower price dealing with the internet salesperson and have different dealers competing against each other than you will dealing with any regular salesperson.

‘Invoice’ is a lie. There is no way to actually find out exactly what a dealership pays for a car minus holdback unless you’re blood brothers with a sales manager. Even some General Managers of dealerships couldn’t even tell you without asking one of their sales managers.

Ford's hold back is 3% of invoice. The dealership sees it on every single invoice, it's printed right on the invoice. Anyone in the dealership that can look at the invoice sees what the hold back is. GM is the same from what I've been told by other salesmen. At most dealerships the salesmen can pull up an invoice and look at it. Really long term salesmen made their own deals from start to finish and didn't need a managers approval, ones that were not one of the top 3 salesmen at the dealership I worked at needed a sales managers approval for any deal. We had the longest and largest volume Lincoln mercury salesman at my dealership, the guy never left his desk to find new customers, sold at least half of his cars without so much as a demo ride (his long term customers simply bought a new town car in the same color combo as their old one, every 3 years or whatever), the sales managers never bothered him. He worked his own schedule, made all of his own deals, and worked his own hours, and sold over 30 cars a month, every single month. It seemed like 1/3 of the people that came through the front door went to his office. One month I saw him sell 61 cars.

Here is a list of the hold back amount per manufacturer, at the bottom.

https://www.findthebestcarpric...-is-dealer-holdback/

I have no clue why anyone cares about invoice. Not a one.
You are trying to buy a specific car/truck for the lowest possible price. The relationship of that to dealer cost is irrelevant. The amount you will pay for your specific vehicle depends on lots of things like inventory, desirability, dealer situation, etc. None directly related to the dealers cost. The best way to get the best price is by having people 'bid' on your business. That's why just about ever single major purchase by anyone (you know roads, airplanes, insurance contracts, employee benefits etc. etc.) is done that way...
If you know what car/truck you want and you want to buy it off existing inventory this is pretty easy project. find the dealers that have one and ask them for a price. I use email but you can fax or visit or use smoke signals. I normally ask 4 or 5. But if its a common vehicle I might ask more. Make sure you communicate your timeline and any other conditions you have. Make it clear that you are buying, if not you will not get serious offers.
I've bought dozens and dozens of vehicles this way. In the end the people who want your business will be pretty close on price (I just bought a new Ford truck and the difference in price between the two lowest prices was $4) and you can pick who you like for other reasons.

quote:

Originally posted by jhe888:

quote:

Originally posted by PD:

quote:

Originally posted by Oz_Shadow:
Super lowball the price and tell them you will let them finance. They will give you something like 5.9% Immediately refinance through your bank.

I like that idea but is there anything in the loan agreement that says you can’t do that. We do know they’re sneaky bastards.

Can you read?

Good idea. I think I’ll take out a loan I don’t need just so I can read the 20 page agreement