What is the best approach...

[Alwaysforward]

to buying a car when you have no car to trade in and you want to place a large amount of money down.

In the past (whether right or wrong), I have always gone in with a payment in mind that I can afford and that was my limit. I got burned a few times over the years.

Lets say I have x dollars that I want to put down on the car. Shall I divulge that upfront then work a deal from there or should I hold out until I am in the finance department then divulge my down payment.

With the advent of the internet and the auto loan calculators available, you can pretty much calculate what you will be paying for the car and what the car payment will be.

You can even add in tags, taxes and extended warranty combined and get a very close estimate. The only unknown factor would be what interest rate you will get but if you have good credit and are putting 30% down, you will be in the 2% ballpark I would guess.


So what are your thoughts? At what point do you divulge the amount of money you plan on putting down? Do you even talk about what payments you are looking for?

 

[marinakorp]

I haggle the price of thje car - first.

Then divulge trade or cash down.

Like you said.. wit hthe internets... you wshould have a good ide of the payment / price relationship ahead of time.

call your bank / credit union and see what they are getting for a car loan.

lets say you have 300/mo in mind as a payment you can handle... that is roughly a 17,000 with tax tags, ...etc... over 5 years (60 months).

when haggling on the price... if you are not below that 17,000 mark (after your down payment you want to put in)... there is no way you are going to make your undisclosed payment amout.

if you say...I want 300 / mo...they may qsqueeze you in to a longer term note (not the best thing in the world)... allowing you to get to 20,000 ....

they make more $$$... and all you cared about was the payment...

 

[bmbutler]

Do NOT go in with a payment in mind and tell them. Lately that is all I hear from dealers - "what payment works best for you?" You might give them a number and they do it, but you are in a loan for 7 years. I bet something like that has happened since you said you have been burned a few times.

Go in thinking that the salesman is going to rip you off (no matter true or not). Arm yourself with information that is all over the internet about a fair price for the car and all incentives and holdbacks. Email or fax them to tell them what car you are wanting to buy and to email you with their best price. Don't walk into the dealership. They have all the control when you do that.

Be pre-approved for any car loan ahead of time. Keep the cards in your wallet. If one won't talk to you, move on to another one. Gosh knows, there are enough car dealers out there.

 

[ksoze]

Never mix a car trade with negotiations on a new car. Tell them you don't have one. Never talk payment, talk OTD selling price. As was stated above, odds are a local credit union can beat the initial interest rate they toss out, unless it is subsidized by the manufacturer (you can check). Until you have an outside rate for comparison, any discussion with the dealer over rates are dangerous.

So, before you enter the lions den: Know the car you want, the options you want and the invoice price. Find what others are paying or the average price over invoice. Then start from the bottom up. Do not say what you have to spend or how much cash you have - these guys are not personal financial planners, they are sales people whose job is to extract as much from you as possible and see their financial planner and invest it. Once you settle on that, you can bring up the trade, but get a price from Carmax before in hand and let them match or best it or walk.

 

[Alwaysforward]

Thank You all for the info. Much appreciated. I will contact my Credit Union to get rates for the new car ahead of time. Regarding getting pricing ahead of time, are you referring to doing online searches across numerous car dealers to locate the best price?

When emailing dealers, should I simply state the OTD price? I want to also get the extended warranty but didn't want them to raise the price of it. Should I hold off on discussing the warranty until I sit with the finance department?

I won't have a trade in so that won't be an issue. I am giving my car to my son in law.

 

[GenesisCaptain]

If you are not doing a trade, then the only thing that matters is the purchase price of the car and how long you intend to finance. Set those limits before you do anything else.

Next, decide what negotiating approach is best for you. Everyone will say their approach is best. Ignore it. Decide what is right for you and your personality. If you are not comfortable with negotiating, or just don't want to mess with it, then consider pre-negotiated purchase services available through something like AAA, USAA, Costco, etc. That will get you pretty good.

 

[EXBMWGUY]

^ agreed. Some people negotiate best with their feet. They simply get up and walk, knowing that they'll never get out the door without a better deal. chased before they get out the door

 

[EXBMWGUY]

Sorry - fingers fumbled . . Other folks love to engage, debate, etc., understand the numbers and won't deviate from their number.

 

[bmbutler]

You don't always need an extended warranty either. Can't you shop for one?

 

[BPSCG]

I hate the negotiating. It's just one more element complicating the deal, and the more complications involved in the deal, the bigger the advantage for the dealer, because while you might buy a car every few years or so, he does this stuff every single day. Every. Single. Day. He knows every trick of the trade. And you don't.

So here are the variables:

1) What's the price for the car?
2) How much do you get for your trade-in?
3) What kind of financing are they offering?

That's why I've bought my last two cars - both Hyundais - from the same dealer, who advertises his OTD price on his web site; the price only excludes the government fees (registration, etc.) that vary from jurisdiction to jurisdiction, and dealer prep, which he charges a flat $199. It includes freight.

So I can eliminate variable #1 right off the top.

I've reached the point in my life where I can pay cash for a new car, so unless they offer me a ridiculously low rate - like 0% - I can eliminate variable #3.

That only leaves #2 - how much are they going to give me for my trade-in?

I went to Kelly Blue Book and also to the dealer's link to blackbookauto.com, to get an idea what my old car was worth. I then took the car to the CarMax about 5 miles from the dealership, and they made me an offer about in the middle range of what KBB and BB both said it was worth, so I knew I could sell my car with no trouble for a reasonable price. Note that dealers will ask you where you got the value of your car, and if you tell them KBB, they'll come back with, "Well, we use Black Book," so it's handy to be able to tell them you have BOTH prices. If you don't have the BB price, you can ask them to go online and walk through YOUR car, just to make sure they didn't make a "mistake" when valuing your car on BB ("Oh, you have a sun roof...?")

When it came time to get the dealer to offer a price for my car, he was about $1,000 shy of the CarMax price, so I naturally countered with a price $500 MORE than CarMax's price, and he settled with me on the same price that CarMax had offered, and we had a deal. The negotiating was really a matter of convenience, because the CarMax people were ready to buy my car THAT day for the price they'd printed out on paper for me, so it was simply a question of who was going to give me the higher price.

So I eliminated two variables - OTD price and financing - and minimized the possibility of getting screwed on the third.

Could I have done better by going to multiple dealers and haggling for three or four days? Maybe, and I suppose if I thought I was going to live twenty or thirty thousand years, I might have done that. But the older I get, the more precious each day seems to be.

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[marinakorp]

Depending on the state... if trading the car in to dealer... it knocks the tax off of the car... if going to CAr Max... it soes not.

so even a slightly lower price from dealer is the SAME as the Car Max offer.

If it is the same... you actually come out ahead of the game.

 

[DEPOTDaddy]

The key not setting foot in a dealership until you have locked in YOUR
PRICE, time is on your side. Have at least three stores compete, they will
gladly do it, don't discuss a trade or down payment. Let them each make the
offer and counter-offer, give them two to three days. The dealers know that
if you get the out of the door price that you want, they will still make $$$
out of the sale. Make sure your out of the door price includes tax, & freight.
You may elect to pay tags & registration out of pocket.

I purchased my 2013 Genny new last year for 35K, plus $3k in incentives.
I closed the bidding in two days with this approach.

Presentation: Call Each Dealership on the weekday morning that I plan to request my proposals.
Launch your request on the morning of (1) Monday if a month ends on Wednesday, (2) the last Tuesday if it ends on Thursday,
(3) the last Wednesday if it ends on Friday, Saturday, Sunday, Monday or Tuesday.
My name is: ____________________.
I’m going to buy a Hyundai Genesis in the next few days, and I would like to give your dealership the opportunity to sell me one.
I’d like to speak to either your internet sales manager, or your new car sales manager, about my specifics.
What is that person’s name, and would you please put me through to him or her?
When the manager answers, say:
Hello my name is __________.
I am going to buy a new Hyundai Genesis in the next few days, and I am contacting a limited number of dealerships to get price proposals.
I’d like to include your store if you’d like me to.
I’ll send the request with my vehicle specs this morning. I can email it, whichever you prefer.”

“I have no specific price objective; the selling price is up to you, not me.
By later today or tomorrow morning, I’d like you to give me a price for the car and a detailed “out of the door” price, including sales tax,
registration and any other charges. You can do that over the phone if you wish.

You can also email me, but I am not requiring anything “on paper” up front. The only dealership I’ll need a email confirmation from is the one from whom I buy the car.
If I haven’t heard from your store by tomorrow morning, I’ll call to follow up with you. Will you or someone else identified be available to receive my call?

I’ll contact every participating dealer tomorrow afternoon to report the best proposal I’ve received, but I won’t divulge the name of that dealer.
So everyone will have one more shot before I make a decision, which I’ll do after speaking to all the participants.” I like to treat people the way
I’d like to be treated, so this will be a level playing field. I will not favor any dealer.

I am NOT just soliciting proposals so I can ask the closest dealership to match the best one. I will report the best price to all participants,
but not to one that says, “Get the best bid and we’ll beat it.” I won’t buy from any dealer who doesn’t participate from the start.

Sales Professional, ___________________________
Re: BUYING A 2013 hyundai GENESIS SEDAN
Dear Mr. _____
As we discussed, I am ready to buy a Hyundai Genesis, and I’d like to get a quote from your store.

I am asking for price proposals from a limited number of dealers, so each respondent should have a decent shot at selling me a car.
By later today or tomorrow morning, I’d like you to give me both a price for the car and an itemized “out of the door” price, including sales tax,
MV registration fees, and any other charges such as document fees or dealer prep.
I will inform all participants of the best proposal, probably by tomorrow afternoon.

This will be a level playing field. I am NOT just soliciting proposals so I can ask the closest dealership to match the best one. I will report the best price
to all participants, but not one that says, “Get the best bid and we’ll beat it.” I won’t buy from any dealer who doesn’t participate from the start.
To curb the demands on your time and mine, I will not conduct endless negotiations. All participants will get one chance to counter the best proposal.

I understand that all may not favor this method of business, but I am a serious and set on buying a vehicle by the end of the month.
My deal a Genesis Sedan 3.8, Titanium Gray, w/Saddle Interior, Tech Package. cargo tray, no wheel locks, or other add-ons desired.

CAR/Equipment INVOICE RETAIL
2013 Genesis Sedan 3.8 $32,070.00 $34,200.00
02 Premium Package $4,368.00 $4,800.00
04 Technology Package $3,913.00 $4,300.00
Destination Charge $875.00 $875.00
TOTALS $41,246.00 $44,195.00

I realize that your version of the invoice will have a legitimate additional charge for Hyundai’s regional dealer advertising association.
I am aware of Hyundai’s holdback 3% of the total MSRP, excluding the destination charge, but those dollars don’t typically get passed along to the customers.

I know that in most sales oriented businesses, there are ways auto dealerships are rewarded for reaching sales and or other below the line targets (CSI, etc.).
An attractive price proposal to me could help you reach yours. Because your location is in reasonable distance from my residence I will be having my Genesis serviced
at your auto center. I look forward to an excellent customer experience with you and will be pleased to express the highest accolades in the follow up
questionnaire I receive for the automaker.

Ways to contact me:

Thank you for considering my request. I hope to here from your dealership soon.
Sincerely,
_______________________
Future Genesis Owner
__________________

 

[DEPOTDaddy]

This was my no stress no haggle approach, I used to be a pro haggler...now retired.

 

[Mark_888]

Some people negotiate best with their feet. They simply get up and walk, knowing that they'll never get out the door without a better deal. chased before they get out the door

Yes, this works especially well if you have an extra key for your trade-in, and then when they tell you they can't locate the key you gave them (to inspect the trade-in), you then whip out the extra key with a great big grin on your face, and all of a sudden they come up with a decent offer.

 

[dach2k3]

The last three cars I have bought have gone like this:

1. Research.
2. Test Drive.
3. Get a base line offer for the car you want to drive at Truecar or some other similar website. Print it out. You are not going to pay more than this.
4. Calculate the out the door price for the above. This obviously varies by state. But it is something like Price from step 3 * 1.07 (tax in florida) + $500 (tag, title, misc).
5. Get approved for a loan for the full amount of the above (or even a little more). I am a member of Pentagon Federal Credit Union which has great rates. 1.99% for a 60 month new car loan. If the above is something like $43,000 I would get approved for $45,000.
6. Email every dealer within 40 or so miles of me. Telling them exactly what car I want and attach the Truecar price from step 3. I ask them for their best offer below that price. I want to see the MSRP, their offer and the total out the door price including tax, tag, title, etc. I also want them to be clear which rebates they are including. I don't want them adding a military rebate I will not qualify for and then having them remove it later.
7. Once you get the offers. Take the best offer email it back out to all of the other dealers and let the know that you are ready to make a purchase and want to see if they care to beat that price. At this point narrow to the top 3 and get back with the original best price from step 6 and see if they can do better than this current price.
8. Optional - if you have a trade get an offer from Carmax, it is good for a week.
9. Head into the winning dealer. Be prepared for several things. After market crap added onto your car. Dealer fees not included in the above quote. Prep fees not included in the above quote. Your price should be set from the above quote. Once you confirm that, let them know you have a trade in. See what they offer.
10. If the offer beats Carmax (unlikely) then try and do better... hem and haw and tell them you are planning on taking it to Carmax. If it doesn't then show them the carmax offer. I think a lot of dealers will match it, which will save you tax in a lot of states. If they don't come within the tax buffer at least then you can just take it to carmax.
11. Financing. They will try and get you to finance it with them. At this point you will be in a room with the "finance guy". Tell them that you would be happy to finance it with them if they can beat this rate and show them the draft from your prior approval from step 5. Most likely they will not be able to if you got a good rate (like at PenFed from above). Make sure you know about all the available promotions and rebates. Often you get a choice for a cash back rebate or a special financing rate. Often the special financing fee is 0.0% but if not it is probably something like 0.9% or 1.9% or 2.9%. If you have a good rate like the 1.99% from PenFed then the rebate will probably be better than the special rate, and they likely can't beat the PenFed rate.
12. Double and triple check that they have not stuck some additional fee on your final documents.
13. Sign and enjoy your new car.

 

[EXBMWGUY]

Yes, this works especially well if you have an extra key for your trade-in, and then when they tell you they can't locate the key you gave them (to inspect the trade-in), you then whip out the extra key with a great big grin on your face, and all of a sudden they come up with a decent offer.

Haha! I don't co-mingle a trade. True story: man walks into dealership, says he wants to buy a new car - gives dealer his keys saying, "check it over and let me know how much you will give me - test drives new car - doesn't like the new car - says "where's my car?" Dealer looks dumb - guy finds his car 30 minutes later on the used car lot with a price sticker on it. Two hours later, a local TV news crew shows up!

 

[Alwaysforward]

Thanks again for all the awesome tips. Luckily I don't have to worry about a trade in. Now all I need to do is wait for the inventories build up and the factory discounts show up.

 

[jcox12]

Yeah the 3 dealerships I've been in contact with are all saying that price is msrp and non negotiable per managemenr. If that's the case they won't be selling a car to me. Haha ill wait it out. They will call eventually

 

[Alwaysforward]

Luckily for me I have 4 vehicles in the driveway so I am in no rush to pull the trigger until the prices drop... Although it will be a tough wait, it will be worth it.

 

[Mark_888]

True story: man walks into dealership, says he wants to buy a new car - gives dealer his keys saying, "check it over and let me know how much you will give me - test drives new car - doesn't like the new car - says "where's my car?" Dealer looks dumb - guy finds his car 30 minutes later on the used car lot with a price sticker on it. Two hours later, a local TV news crew shows up!

When I bought my Genesis that is pretty much what they tried to do to me. I signed a deal at a specific price for them to trade with another dealer 150 miles away to get the color I wanted and for me to trade in my old car. They said in the meantime, for me to drive another car home (same trim level but wrong color) and leave my trade-in and pick up the other car later.

I know what would have happened--they would have sold my trade-in (or told me it was gone or whatever) and also would have also told me that the other dealer changed their mind and would not trade, and that the only option was to buy the car I drove home (but was a color I did not want). I knew exactly what they were up to, so I said no, and that I will drive my trade-in home and bring it back when they got the new car I wanted from the other dealer.

Then they tried to convince me that was a bad idea because I might wreck my old car, and the deal would be off, etc, etc. They must have thought I was an idiot, or I guess some people fall for that crap. Every time I talk to a car salesman, I immediately go home and take a shower because I feel dirty just having in the same room with those people.