The inside scoop of buying a NEW car

[larryh1108]

What do you think of the “Maven” who is there to ensure his friend who doesn’t understand finance and has a 750+ credit score doesn’t get taken advantage of by the stereotypical sleezebag sales person? Once you begin to talk numbers, that person takes over 99%.

I have no problem with friends/relatives helping the naive person buy a car.
They aren't "Mavens" they are helpers to the buyer.
A maven makes demands that can't be met, usually in a loud and demanding voice.
Maven: "My sister with the 525 credit score will not be ripped off and will pay a maximum 9% interest rate when the going rate is 4%.
5% is more than fair for her credit."
Really, sir? Her 525 score means she EARNED a 21% interest rate. Her repo 2 years ago means only a select few lenders will even look at her app.
They charge 21% and the dealer cannot mark up the rate because they are considered high risk.
Now what? Does she want a car or do you want to take her elsewhere where they will charge her 21%?
We all use the same lenders.
Maven: "My sister wants that car listed for $15,000 and will only pay $325 a month because that is her budget!"
Really, sir? Does your sister have $7,000 down because she only qualifies for an $8,000 loan with her repo and 525 score and income.
No? She has $500 down? Well, sir, she cannot buy that car without a cosigner. Are you willing to see if you qualify? No?
Why not? She is your sister and needs a car. Not willing to help family? I thought you are here to help her buy a car. If she wants THAT car she'll need a cosigner. Still not interested?
Ok, let me do my job and find a car that works for her and the lender. That ok?
Anything else before we actually try to help your sister?

Ok, in your situation mentioned, you are not being a maven. You will step in if you see something that isn't right and ask the salesman/finance man
to explain himself. If he cannot clearly explain what is going on then you should advise your friend to think about it over night, right in front of the
person in question. If he doesn't perk up and quit mumbling or double-talking then just get up to leave. He'll do what he can to stop you. A vigilant
manager may be watching and come over to ask if there is a problem. Tell him that Joe here is not listening to you and is making you uncomfortable.
Tell the manager that you are ready to go home to think about it. The manager should talk in private to the offender or take you to a different finance
guy or just take you to another office and finish the paper work himself. They do not want you to leave. Trust me.
Advising a friend or relative is a professional and helpful way is not being a maven. Making demands that are unreasonable and proving that you do not
know what you are talking about is being a maven. Acting like a tough-guy in front of your buddy, girlfriend or relative makes you look like an ass and
will definitely cause your friend to pay more or to waste your time and leave to do it again at another dealer. Usually the buyer will come back without the
maven if they liked you and the car. They realize that their maven embarrassed them and himself. Usually the buyer tells the maven to shut up or leave
when they see he is more of a hindrance than a help.

I am all for helping our loved ones thru the car buying process. Nothing turned my stomach more than watching a slimy shark totally rip that poor divorcee or widow because they needed a car and found the wrong guy. If you are uncomfortable, get up and actually leave. Seriously. They need you more than you need them. If/when a manager asks why you are leaving, tell him that you do not like how your salesman is treating you. If he hears that enough, he won;t be there much longer because a slimy salesman makes the entire dealership look bad. If the new owners prefer to have these types of guys on staff then he won't be around long and another name will be on the pole. A maven is bad. A helper makes the process less frightening.

I have often thought of "renting" out myself to help unsure people buy a car. I'd charge $150 to $200 and I will save them at least $1ooo. I'd be worth it. I would not be helpful to the seasoned buyer or old pro but a recent divorcee or widow can surely use help from someone like me. I'd save them (literally) thousands when it was over.
I'd be a "maven for hire". If anyone here wants me to be their maven, PM me. Seriously.

 

[easternnc4me]

I'm not brand loyal but generally had Cheverolet trucks. Bought a repossessed 2006 Ford F250 6.0 4x4 diesel from the local SECU in 2010 that had 86K on it. Averaged 6500 miles a year on it and it was a POS. Literally going to the shop every year because it wouldn't crank or some other problem. Not cheap repairs (to me anyway). $2600, $1800, etc. I think the cheapest repair was a sensor that was $300. Last time it was towed in it was fixed but I was told one of the the turbo and alternator were going out. $3400 estimate. No thanks. Started looking around for another truck. The local Chevrolet place was asking nearly the same price for a 2 year old truck with 40k miles on it (if I remember correctly) as they were for a new one. Oh, and the 4WD warranty was only good until 24K miles. I had talked to service department supervisor at another dealership and he told me to look at the Ecoboost as he thought I would be happy with it and, as it was the start of the near year, the 2014 models were discounted and not a lot were left on the lot. He was right. Ended up trading in the POS F250 on a 2014 Ecoboost. I was happy with the price I paid for it with trade in. Still am. However with a 3yr/36K manufacturer warranty, I did op for extended warranty of 8yr/80K. Those turbos would be expensive to replace if something happened. Additional price of $2000 for the extended warranty. I know. I know. The radio speaker has been replaced twice (known defect). Last year we were uptown while it was raining and my son says "Dad, I'm getting wet." Sure enough water was leaking from overhead. A little over 3 years since buying it. Carried it in and was told the brake light on the cab of the truck was leaking. Not covered under warranty. $196 to fix. I declined. They did not charge for the diagnosis. I brought it home and looked around the internet. Multiple instances of that brake light housing leaking. Ordered one with thicker foam around it for $40 and it's been fine since. Brake light housing is not a wear and tear part yet it was not covered. As @larryh1108 mentioned I'm sure a lot of stuff that should be covered under extended warranty should be covered but is denied. All about the upsale. Would I buy an extended warranty again? Definitely not for $2000. Maybe fore $995. Growing up my neighbor was the head mechanic for BFI. The man was a great mechanic. He always said to never buy a new car. Always buy one that is a couple of years old as usually the kinks are already worked out.
On a related note, years ago when I was just starting out my brother cosigned for me on a 1991 GMC Sierra. Had $3000 to pay down. When looking over the paper work to finalize it, I noticed they added the $3000 to the price to be financed. Um, no. You made a mistake here. To this day I believe that there was no way that 2 employees could have looked at that and not noticed it. It was corrected and that truck lasted for years.

 

[larryh1108]

Additional price of $2000. I know. I know.

$2000 for an ESC on a USED truck with 4x4 and a turbo is a very good price.
I'd buy it again at that price for that truck. Look at the repair quotes on your 06 F250!
Diesels and turbos and turbo diesels are a risky purchase if you are not mechanically inclined.
I would recommend the ESC at $2000 every day.
Now, many dealers would quote you $2995 or even $3495 for that ESC.
The cost has to be near $1500-$1700. Their markup was fair.
I'd buy there again from what you mentioned here.

The man was a great mechanic. He always said to never buy a new car. Always buy one that is a couple of years old as usually the kinks are already worked out.

Agree 100%. You get a lot more car for a lot less money if you buy a used car with <50,000 miles on it plus get the 48/48000 ESC or longer if available (depends on actual mileage at purchase).
That's 4 years from your purchase date or 48,000 miles from your purchase mileage. Used ESCs are sold differently than new. If the new car is 3 years
old and has 48,000 miles on it the ESC will take you to a total of 7 years and 96,000 miles from the original in service date.
Up to $1200 for a used nearly fully coverage ESC is worth retail $1200 or so. Used ESCs cost more than new. Dealers try for $2495 to $2995. Pass.

 

[easternnc4me]

$2000 for an ESC on a USED truck with 4x4 and a turbo is a very good price.
I'd buy it again at that price for that truck. Look at the repair quotes on your 06 F250!
Diesels and turbos and turbo diesels are a risky purchase if you are not mechanically inclined.
I would recommend the ESC at $2000 every day.
Now, many dealers would quote you $2995 or even $3495 for that ESC.
The cost has to be near $1500-$1700. Their markup was fair.
I'd buy there again from what you mentioned here.


Agree 100%. You get a lot more car for a lot less money if you buy a used car with <50,000 miles on it plus get the 48/48000 ESC or longer if available (depends on actual mileage at purchase).
That's 4 years from your purchase date or 48,000 miles from your purchase mileage. Used ESCs are sold differently than new. If the new car is 3 years
of and has 48,000 miles on it the ESC will take you to a total of 7 years and 96,000 miles from the original in service date.
Up to $1200 for a used nearly fully coverage ESC is worth retail $1200 or so. Used ESCs cost more than new. Dealers try for $2495 to $2995. Pass.

Not used. It was a 2014 model that I bought the first of 2015.

 

[larryh1108]

Still not too bad for a turbo diesel 4x4. Those muthers are expensive.
$200-$300 high is not too bad.
$2ooo for a new, FWD car is a total rip off.

 

[Goofyfoot2001]

First, great idea for a thread and thanks for sharing your experiences and knowledge!

This is exactly what I did for my 2018 Tacoma. Contacted 16 dealers, leveraged the top 2 offers against the dealers I liked so far, had the winning dealer throw in services to close the deal as I knew the dollars weren’t getting any lower. Only walked into one dealer, still spent about 4hr there including waiting for the service I negotiated, and got a high demand color & trim for 14% off MSRP, well below what I thought was even possible.
Honestly I don’t understand why they went so low, but it was 2 days prior to month end, and I used their financing (1.9%).

What was the percent ABOVE Invoice?

This is an awesome thread. I havent bought a new car in two decades because I think they are all overpriced. I look at truck prices and have to ask myself if I will be hauling hay bails on a daily bases or dead cows and I have to answer no, I cant justify a truck. I work on my own cars and can't stand taking a car to a mechanic much less a dealer. However, this thread does make me feel better about the process should I ever want to buy new. Thank you!

 

[larryh1108]

What was the percent ABOVE Invoice?

This is an awesome thread. I havent bought a new car in two decades because I think they are all overpriced. I look at truck prices and have to ask myself if I will be hauling hay bails on a daily bases or dead cows and I have to answer no, I cant justify a truck. I work on my own cars and can't stand taking a car to a mechanic much less a dealer. However, this thread does make me feel better about the process should I ever want to buy new. Thank you!

Great to hear! I am writing this info to make the process of buying a new car less stressful and to help you save money. If even 1 reader gets help then it was well worth it.
I know I have rankled a few people here. They don't need any advice I've offered. They know how to do it and what to do. They needn't waste their time here.

 

[Jerzsubbie]

I have no problem with friends/relatives helping the naive person buy a car.
They aren't "Mavens" they are helpers to the buyer.
A maven makes demands that can't be met, usually in a loud and demanding voice.
<SNIP>
I have often thought of "renting" out myself to help unsure people buy a car. I'd charge $150 to $200 and I will save them at least $1ooo. I'd be worth it. I would not be helpful
to the seasoned buyer or old pro but a recent divorcee or widow can surely use help from someone like me. I'd save them (literally) thousands when it was over.
I'd be a "maven for hire". If anyone here wants me to be their maven, PM me. Seriously.

Thanks for explaining the ways of the "Maven". I always go with my close friends and family since I am a numbers guy, have broad experiences, and do my research (to an extreme sometimes haha). I hate more than anything seeing friends get taken advantage of and with buying cars, there are too many ways for this to happen. Once they pick the car, I basically take over from there to ensure there are no games being played.

Prime example of this was buying my wife's (then fiance) 2016 4Runner. We discussed exactly what we wanted and the max we were willing to pay, found the exact vehicle, went to that dealer prepared NOT to leave with it since it was their "too good to be true, only 1" deal. They hid the vehicle, we found it, they low balled our trade (2500, then 3k after I told them it was off the table), guess we looked poor because they were shocked when we put cash down well in excess of our trade's value (think they thought we HAD to trade), tried playing the payment game with some terrible math for which I had to break out BankRate.com calculators to show them the flaw in their ways, refused to show me the itemized deal sheet until I threatened to walk, tried giving her an 8% rate with well over 750 credit score until I told them I'd get my own financing on my phone in 10min, tried getting meto cosign which I knew wasnt necessary, after like 6 back and fourths they beat the rate I got by 0.2%, and in the end we got the vehicle for the posted price, no dealer add on BS or other funny business, but they were the shadiest dealer I've ever dealt with. Oh and we sold her trade for 7500 in 3 days to a guy in our neighborhood LOL, that was icing on the cake.

I've wondered why there isn't a service to be someone's "negotiator". I guess there is still too high of a chance of the dealer paying off the hired negotiator. I gladly do it for my friends, usually results in a free dinner out, so it's a win-win!

 

[larryh1108]

Let's talk trade ins some more.
I only touched on the topic earlier. A lot of people trade in cars. A lot of those people still owe money on their trade in.
This makes the process more confusing and more daunting.
Why?
Well, we covered how a trade in shifts your attention from the actual selling price to the now important trade difference.
The trade difference is my car minus your car.
My $30,000 car minus your $5,000 trade in.
Cash difference is $25,000 plus, plus, plus.
We go further and take out the factory rebate.
$3000 rebate (it's August and time for the 2020s to roll out).
Ok, cash difference minus the $3,000 rebate and now the car costs you $22,000.
Man-o-man, $22,000 for a $30,000 car is a great deal!
But I wanted $7,000 for my trade and the dealer gave me only $5,000.
That;s not good! Kelly Blue Book says the average trade value is $6,250. I want $6,250!
Well, sir, let's talk about that. KBB puts it at $6,250 if it has average miles and average condition.
You are 10,000 miles over average and you need new tires. Those door dings your wife got at the mall?
Can't sell your car like that. Costs money to fix. If your car didn't have these issues I'd give you the $6,250 but it's not average. Sorry!
You grumble but admit he's right. It does need tires but they are good for another month or 2. Maybe 3.
No one wants a used car with bad tires. It does have 10,000 extra miles but they are highway miles!
Well, the next buyer won't know that. I knew those door dings would cost me! I told my wife to park away from the other cars!

Well, I'm still not happy. I'll make the deal if you give me $6000 for my car.
Dealer: I can't do that, fix it and sell it for a profit. Maybe you should take it home and put it on Craig's List. I bet you can get close to $7,000 on Craig's List. However, YOU have to deal with the lowballs and creepy people. You have to test drive with them. You
don't know them. Do you want them to come to your house and possibly check your house out for a possible "venture" in the future? They do see that shiny new car in your driveway. You must have money! Do you take a check? Can I give you $500
today and I'll bring back the rest tomorrow when I can get to the bank? You can trust me, he says.
Uh huh, I trust you all right. Come back with the cash and we'll talk. Geez, some people!
You can pick up an extra $1000 by doing this. Trading it in is a wholesale deal. Craig's List is a retail deal. I pay wholesale.
If you will make a deal tonight, I'll give you $5250 for your car. Best I can do.
You know he's right and make the deal, but aren't happy about your trade value. He writes it up and shows the trade in allowance as $5,250 as promised. The trade in value is still $5,000 but he "showed" you $5,250. All he did was knock $250 off the sale price and added it to the trade in price. Actual trade in value $5,000. Actual trade in allowance: $5,250. You focuses so much on the trade in value that you forgot to ask for the Good Guy discount (mentioned above) that the dealer offered you to make a deal with no trade. You trick bagged yourself, the dealer didn't do anything.
He didn't discount the selling price because you didn't ask him to. You were more concerned about your trade in than the new car price.
Happens all the time.

Let's make it more confusing now. You owe money on your trade in.
You agree to the same deal as above. $30,000 minus $5,250 trade in minus the $3000 rebate and your new car costs you only $21,750! +++
Woo Hoo! Yes! Very cool.
The salesman starts to write the deal for you to accept. $21,250 plus plus plus.
Sign here. You sign. Salesman signs. Manager signs. A deal is made. Everyone starts to relax knowing the finance guy will see you in about 15 minutes.
That thought winds you up again. Now the worst part!
You go outside to get a cigarette. Your nerves are shot but the hard part is done. You enjoy the cool breeze.
The salesman collects needed stuff... License, insurance card, trade in keys, trade title.
Trade title? Ummmm, we don't have the trade title, the bank does.
Bank? What bank?
Well, I still owe money on it. I financed it.
Salesman: when I asked you before if you have the title, you said "yes".
You, well I do have the title but the bank has some lien papers or something.
Well, let's sit down and figure this out.
Get bank info from buyer.
Call bank's automated payoff line.
enter buyer's social security or account number.
Auto teller gives payoff.... $8450.
Oops!
Houston, we have a problem!

 

[larryh1108]

Prime example of this was buying my wife's (then fiance) 2016 4Runner. We discussed exactly what we wanted and the max we were willing to pay, found the exact vehicle, went to that dealer prepared NOT to leave with it since it was their "too good to be true, only 1" deal. They hid the vehicle, we found it, they low balled our trade (2500, then 3k after I told them it was off the table), guess we looked poor because they were shocked when we put cash down well in excess of our trade's value (think they thought we HAD to trade), tried playing the payment game with some terrible math for which I had to break out BankRate.com calculators to show them the flaw in their ways, refused to show me the itemized deal sheet until I threatened to walk, tried giving her an 8% rate with well over 750 credit score until I told them I'd get my own financing on my phone in 10min, tried getting meto cosign which I knew wasnt necessary, after like 6 back and fourths they beat the rate I got by 0.2%, and in the end we got the vehicle for the posted price, no dealer add on BS or other funny business, but they were the shadiest dealer I've ever dealt with.

Perfect example of how doing the homework up front and being educated in the process can/will save thousands of dollars in the end.

Thanks for sharing and showing others how being educated and prepared is the only way to buy a car!

 

[Jerzsubbie]

What was the percent ABOVE Invoice?

Sticker was $42,082
Invoice (per NADA) $38,473
Paid $36,080

Like I said, I did not expect to get this kind of deal. I thought I was going to pay 1,000-1,500 more as that was in line with the best deals I had seen reported on Tacoma forums.

 

[Sevenshot]

Following. Have only bought used cars but thinking about getting a new car for the next one.

 

[BlackGun]

Right or wrong I bought a Ram Cummins Diesel stripped without a bed with only air condition. I walked into the dealership and asked for the salesman to get the owner or GM. I asked him to show me a dealer invoice from any dealer or latest deal and I would give him $1100 over that and he could order me a red one as long as it took 45 days or less. I told the actual dealer owner he could have me done in 30 minutes and be on to the next deal and both would have what I felt was a fair easy, seamless profit for a vehicle he did not have to finance or stock. He produced an invoice almost exactly except carpet and clothe seats. I gave him my personal check for 75 percent of the truck cost and he gladly gave me the lowest rate which was at the time 4% and it was all done in an hour. He made $1100 on a $20,000 vehicle he didn’t have. Win-win. I wanted him to make money.

 

[DrPhudd]

I really do not want to sound insulting, but I have seen nothing in this thread that changes my mind that car dealers are the scum of the earth.
Do not tell me it is a complicated process. You know what you have in it, you know what you want to make on it. Put a price on it and f@#$ing sell it.
All the dancing around and showmanship makes me sick.

 

[larryh1108]

I have seen nothing in this thread that changes my mind that car dealers are the scum of the earth.

I truly don't think I've tried to say otherwise!
Car dealers are among the scum of the earth.
I've mentioned that about half of the sales staff at most dealers would skin their own mother for a buck.
I've called dealer owners and GMs whores many times here (because they are).
I've advised people here to get up and walk when they don't get a good feeling... many times.

Do not tell me it is a complicated process.

I'm trying to help people understand the process.
It is a complicated process, to a point.
It can be an easy process, to a point.

An easy process would mean the price is posted on the car like the MSRP label.
The buyer test drives the car and likes it.
The buyer sees the price and agrees with it.
The deal is made.
Everybody is happy, happy.

Saturn did it that way. They are closed now
Oldsmobile did it like that towards the end. They are closed now.
CarMax does it that way. It has been very successful. They specialize in used cars.

If it was only that easy....
You have a trade in?
Dealer say's it's worth $5,000
KBB says it's worth $6,000
Buddy at work says you can get $7500 for it and he knows cars!
You know you took good care of it and want $7,000 for it.

What do you do?
You said it was easy!

Trade ins skew a deal almost every time.
Keep in mind, a dealer is offering you wholesale value less major reconditioning.
Tires good for another 6 months? Well, dealer replaces them to sell. Cost $500.
Time for brakes? Who trades in a perfect car? Why would you? Need brakes? Time to trade.
Dealer fixes brakes. $500 cost.
Your $7000 trade in is now worth $6000 to the dealer.
That KBB price for an average trade in is now worth $5000.

Your neighbor or work buddy offers you $500 more than the dealer? They know the dealer low balls you.
You know it needs brakes and tires. You tell him that and accept his offer.
Craig's List is a nightmare unless you like dealing with unknown type and quality of people.
If you don't mind perfect strangers coming to your house, go for it.
Be prepared for the professional CL shoppers who look for cars to flip and low ball you worse than the dealers.
I'd say the best place to list a nice, used car is on this very forum, right here.

You want top dollar for your cherry trade in? Sell it yourself and save a LOT of time and aggravation.
Tips to get top dollar at a dealer for trade value:
Pay $100 to have the car professionally detailed. You should get $200+ in increased trade value.
Really needs tires? Spend $300 at Walmart to get new ones and get the $500 back for your trade value for not needing tires.
No brake noise? good to go. They usually don't pull wheels to check.
Squeaky brake pads? Get new pads or accept the $500+ discount from the dealer.
Noisy exhaust? Go to Meineke and fix it as cheap as possible.
A dealer will deduct $1000 or more because he has no idea what is wrong. $150 at a muffler shop may be all it needs.
Stained seats? Spend $15 on some good quality upholstery cleaner and scrub them. You'll "save" $200 or so.
Once you recondition your car for trade in, you may see it's a nice car and keep it for your kids, niece, BIL, whatever.

You can get up to $500 more if it looks clean and no lights are on and it doesn't squeak. Good tires a must.
You will get top dollar if it's clean and sound AND you trade in a Ford at a Ford dealer, a Chevy at a Chevy dealer, etc.
If you trade in a Dodge at a Subaru dealer, good luck. They'll probably try to talk you out of trading it because the offer will be an insult. They don't want your car and their trade offer will show it. Same with all import dealers.
They do not want domestic cars (for the most part) if they sell imports. Their offer reflects it. Don't take it personal.

Trade In Summary:
Clean and vacuum and do the windows if you want top dollar for a trade.
Need tires? Get tires. Dealer will deduct more than you will spend for cheap, new tires.
If you have a nice, clean trade in, sell it to a friend or neighbor or on the boards here.
Understand that the dealer will offer wholesale minus obvious repairs.
It's like taking your gun to your LGS to sell for cash. Same thing. Don't be insulted. It's just business.
The entire sales process will be much easier and clear if you do not have a trade. All you will see are the real numbers.
If you understand this up front, the process will be much easier and less stressful.

 

[noway2]

Great to hear! I am writing this info to make the process of buying a new car less stressful and to help you save money. If even 1 reader gets help then it was well worth it.
I know I have rankled a few people here. They don't need any advice I've offered. They know how to do it and what to do. They needn't waste their time here.

Let me first say that I appreciate you taking the time to discuss the car buying process. You haven't rankled me. I'm not a know it all about the process, but there is a fundamental question that hasn't been directly addressed that goes to my comment about letting the dealers compete via internet bidding. Basically why should I go to a particular dealer and commit to a process? I don't know if they're one of the ones they needs to sell one more car to get that huge kickback or if they're flush for the month.

Wanting the best price, especially when you not one of those loudmouths with a 525 credit is NOT trying to 'get one over on you'. However dealers have earned a bad reputation which causes people to anticipate s bad experience where they will get ripped off.

 

[larryh1108]

Let me first say that I appreciate you taking the time to discuss the car buying process. You haven't rankled me. I'm not a know it all about the process, but there is a fundamental question that hasn't been directly addressed that goes to my comment about letting the dealers compete via internet bidding. Basically why should I go to a particular dealer and commit to a process? I don't know if they're one of the ones they needs to sell one more car to get that huge kickback or if they're flush for the month.

Wanting the best price, especially when you not one of those loudmouths with a 525 credit is NOT trying to 'get one over on you'. However dealers have earned a bad reputation which causes people to anticipate s bad experience where they will get ripped off.

Hi,
I have touched on my feelings about internet buying.
I am not a fan of it but I will be honest, it is becoming a "thing" these days.
From the dealer's end, the old adage has ALWAYS been that you cannot sell a car over the phone (now internet).
If a manager overheard a salesman trying to "sell a car over the phone", he would be talked to.
We were taught and drilled that you cannot sell a car unless the buyer is sitting at your desk.
This was proven time and again over the years.
Now, the internet shopper has become a real thing.
It is turning into the end of the present experience of going to the dealer to buy a car.

I 100% believe that 20 years from now, when the present generation of dealers and managers are long gone, internet buying will be the driving force in buying a car. Kind of like how Amazon hes revolutionized retail shopping.
20 years ago, Amazon was interesting and no one predicted what we have today. Today's buyers prefer a computer instead of brick and mortar. That have proven to be fact.

It's hard for us "old school" car guys to see spending $30,000 over the internet without touching the car.
Who would do that? It appears that many people would.
I am internet savvy. I buy guns over the net via websites or Gunbroker without ever touching them. There is a lot of people who would not even consider it without touching it. I know, if it is new, that the Mfg will stand behind the product.
I am comfortable buying used from a seller with perfect feedback and a return policy. I get it. I do it.
However, I am spending $500, not $30,000+.
Yes, a Mfg will stand behind their product if there is a problem.
Yes, a dealer with a good reputation will stand behind a used car if there is a problem, up to a point.
I still find it hard to fathom a buyer wiring a dealer $30,000 to buy a used, hard to find, really nice truck without driving it first.
Yet it happens every day and will continue to happen as going to a dealer will become yesterday's news.

My personal experience has been that internet buyers use the net to get the best price and then take it to a local dealer to match.
There is no loyalty in shoppers to respect the time the guy spend working up the best deal and following up. To a buyer, he is just another annoying email that goes into the trash once he get a quote. Hence my earlier disdain for the internet salesman.
He is always busy. Always getting quotes from management. Always sending emails and is always the least productive salesman in sales.
That has been my experience until recently. However, as we move further into internet sales and refining the process, guys like you will buy from the net. I would guess you are buying a car that is hard to find or unusual in some way (color, options, etc). Why would you do this for an average car on every lot in the state?
I'm guessing that you want to avoid the BS process dealers do have and put you through. You want to find it, get a good offer and buy it.
You want to go to the dealer to pick it up and go home in less than an hour.

Would you believe that we want that too? The present process sucks. Big time. Buyers buy once every 3, 4 or 5+ years. They hate it. It is stressful. We do it every day!
It just plain sucks. It does truly suck. For all parties. A salesman's income depends on you buying a car. If you walk out after 3, 4 or 5 hours without buying a car then (more than likely) the salesman did something wrong to turn you off. He spent his day with you and did not earn a dime. His manager asks what happened. His manager rides him for losing a sale. His paycheck next Friday will be nothing right now.
Rent is due next week and he hasn't sold a car in a week. (for whatever reason). Usually it is the luck of the draw. As mentioned, 1 in 4 people who walk in the door, buy a car. 3 of 4 do not. Why? Well, some just can't buy a car (no job, poor income and bad credit). Some just want a brochure and to ask about current specials. Some want to buy in a few months and are excited and want to start looking now. Some are bored and want to go to a dealer just to see what's on their used lot (we call them tire kickers). Some need cosigners yet don't have one. Some get
pissed off with the process and just leave. Usually the salesman pushes a wrong button. Everyone is different with different needs and has different buttons, good or bad.

I know I am rambling and not really answering your question/statement.
All I can say is that if it works for you then you are a lucky man or just smart enough to make it work for you.
Your way isn't much different than someone who does all his/her homework up front before walking in to a dealer.
As I mentioned, educated and prepared buyers are, by far, the best to deal with. Less drama. Less surprises, Less disappointment.
Internet buying is similar without the live, personal contact walking into a dealer has. Everyone has different needs and comfort levels.

One thing about signing the paperwork at your home (if delivered) or via the net that scares off dealers from pursuing this more fervently.
If I come to your house to deliver your car and you sign the paperwork at your home (inside, outside, in the new car, where ever), there is a 3 day cooling off period that legally allows you to change your mind and cancel the deal. It's called the Right of Rescission. It came about from the old time door-to-door salesmen who took advantage of the housewife, at home and alone, who didn't know she needed
new encyclopedias (remember those?) or that new, expensive vacuum. The law gave the housewife 3 days to cancel the deal when hubby came home and found out she bought a $600 vacuum (40 years ago!) What is that, $2400 today?
So, you may need to walk into a dealer and meet that faceless internet salesman to sign the paperwork and get your new truck.
And maybe you don't have to if you arrange delivery to your home.
I do know many people like this way of buying.
I do know that most dealers are skeptical of this way of selling.
I do know this is the future of buying/selling a car.
I do know that the old way of doing things really sucks and this new way will be better for everybody.
Once Amazon gets into the car business, all hell will break loose.
I say good for the consumer.
The old way of buying needs to go away, the sooner the better.

 

[Jerzsubbie]

...trade in a Ford at a Ford dealer, a Chevy at a Chevy dealer, etc.
If you trade in a Dodge at a Subaru dealer, good luck. They'll probably try to talk you out of trading it because the
offer will be an insult. They don't want your car and their trade offer will show it. Same with all import dealers.
They do not want domestic cars (for the most part) if they sell imports. Their offer reflects it. Don't take it personal.

I had this exact experience buying my Tacoma. I tried to trade a BMW to a Toyota dealership 1.5hr away from Charlotte. In the end, the were transparent in saying that they will have a tough time selling that car in that area at a Toyota dealership. Made total sense. I ended up selling it to an Infiniti dealership in Cornelius, much easier sell for them I’m sure!

 

[noway2]

@larryh1108 thank you for the indepth reply. This thread has been very enlightening. Some of what has been mentioned I've heard of but didn't realize exactly how complex it is. Other pieces are completely new.

You're right, buying a car sucks. It's stressful. I was discussing this thread with my wife and she said, "imagine having an hours long argument with JoAnn. (She is the wife of a builder we got involved with a few years ago and was the brains of the operation. She ran a couple of GM dealerships that were shut down and went bankrupt during the big recession in 2008).

A lot of what you have been saying about the invoice versus rebates versus the manufacturer kick backs for volume etc make it very difficult to know when (or where) is a good time to buy a car. We're looking at having to do so soon. My wife's car is 12 yo, mine is 10 yo with > 290,000 miles. We're "keepers".

A few months ago before buying a second house, we were in the market for a car. My wife wants a Mazda CX-5. We narrowed it down to 4 different models and went around and test drove them. That selection process settled the make and model she wants. The salesman were trying VERY hard to keep us from walking away. We weren't ready to buy, but our plan was to do so very soon. We were still in the figure out exactly what you want stage.

I think you right, that a lot of the attraction in internet buying is not putting up with the BS. It's the BS and psych games that make car buying such an awful venture. I kind of look at it as s way to short circuit the process. If I get preapproved on financing or have cash, with a little effort the dealers can give me an out the door, drive away price. Best bid wins, I go in and do the transaction and we both win. My thinking is this way I can also have a chance of finding that guy who needs to sell those last few and avoid having to repeat a difficult process several times over.

If the process were simpler, as in the price is the price and there weren't all the incentives and gimmicks, it would come down to a lot more reputation and after the sale service.

Thank you again, I know you've put a lot in this thread and I appreciate you sharing the knowledge.

 

[TripleO7]

Well, not helpful for me because I could have explained everything @larryh1108 has. I won't vote in this case.

He sounds like the real deal. Great explanations. I did the same job for roughly 12 years in front and then as a CSM for a nationwide transmission chain for a few years. Beep Beep!

Maybe I missed it, but in the case of the extended service contracts, I always tell people that ask, pretty much what he explained. I also add that they should probably only be willing to purchase the one offered by the manufacturer. Not the one the business manager gets a spiff on from an insurance company. When our "box man" was pushing crap, I always told my personal peeps to insist on Ford ESP. Got in trouble a couple of times, but those guys came and went, while I was never in fear of losing my job.

My ESP just timed out on my F150. The second new vehicle I've ever bought. I expect to get another 6 years out of it at least. The other was a Mustang. I've seen what people do to trucks and muscle cars.

 

[346ci]

Good info! I was a service tech for Nissan and GM for 9 years so can relate, wasn't ever interested in the sales side but met plenty of scum in every section at a dealer.

While I miss the alignment rack and tire machines, hope to never play that game again.

 

[Partsfreak]

Freak, you are in for a rough ride.
I suggest to just be honest, to a point.
Go drive all 3 trucks.
Go on a Tues-Wed-Thur morning at 9:00 when they open.
Most salesmen, on those day,s are just waking up, having a McMuffin and coffee and planning their day.
Walk in and tell him you are expecting "a settlement" soon and will be buying a new truck.
Tell him you are looking at the Dodge, Toyota and F150 and you want a brochure for the (dealer you are at).
Tell him you want to test drive the (dealer you are at).
If he asks what kind of settlement (to establish a rapport) tell him "a settlement".
If he asks how soon? Tell him you are not sure but soon.
You may need to give him you license to copy to test drive a truck (insurance requirement).
Ask for your license back right there. He'll try to keep it to make you come back in. Tell him
he has the copy.
He'll ask for your phone# and email. Give him what you want. Actual? Phony? your choice.
Take the test drive.
When you get back, thank him outside. Go to your car.
He'll try to get you back inside to talk to a manager.
He'll say he'll get in trouble if you leave without talking to a manager.
Your choice. I say tell him you are late for work and are leaving... now.
Thank him and ask him for his card. If it is inside, (to get you back inside) tell him to forget it.
If you got good vibes from him and want his truck, go back when you are ready.
If he calls you and/or emails you, tell him you just found out your settlement is coming in mid-November.
Ask him to contact you in mid-November.
If he becomes a pest, tell him he will lose your business if he contacts you before mid-November.
A good salesman does have a calendar and will get back to you.
A bad salesman will just hang up and you'll never hear from him again.
Be very honest and straight forward (except about the "settlement", that is none of his business).
Don't let a bad salesman ruin a fun experience for you as well as a big purchase.

Thank you for the advice. I'll be asking more questions as the time comes up.

 

[Combat Diver]

tag for future reading


CD

 

[Jp8819]

Thanks for your explainations larryh! I think everyone its important to keep in mind in the negiations process of buying a car it is a short term sell/deal in the grand picture although dealers love to keep repeat buyers. The Individual and Dealer more than likely are not going to be interacting on a weekly basis after the deal so the dealer has to maximize his profit at the deal without making someone walk or unhappy and the individual is trying to save the most they can making it more like haggling. You both have things important to you and they may or may not be the samethings in the deal and willing to give up somethings and not others. Dealers are taught and historically like for you to do the negiations at there place as a buyer tends to have more emmotional attachment to telling someone “NO” in person. Human nature that most like to avoid confrontation. This is why internet sales work in buyers favor and not the dealers, hence dealers do not like it as the buyer does not have the emotional attachement to seeing the actual car and wanting it “now” and they do not have to tell someone “no” face to face so its easy to walk and go multiple places in a short time. The internet has changed purchasing for good/and bad depending which side of the fence you sit on.

 

[larryh1108]

A lot of what you have been saying about the invoice versus rebates versus the manufacturer kick backs for volume etc make it very difficult to know when (or where) is a good time to buy a car. We're looking at having to do so soon.

I appreciate the feedback! From everyone, good or bad. I have time on my hands right now and truly wish to help this specific community (us gun guys) understand the car buying process.
Believe it or not, we've only scratched the surface of the goings on in a dealer. If I get good feedback I will delve deeper and deeper into the process so you can understand more and more of how it really works.

noway asked when it is the best time to buy a car. Like every retailer, there are specific times when it is better to buy than others. Let's look at the logic.

The most obvious is the last 2 days of any given month. Not every month has the serious extra bonus cash, to really move some cars, from the factory. Many times there are no incentives from the factory to move specific units. No rebates. No stair step money. No national TV ads. It's quiet time. Walk into a dealer when it's seasonally quiet and it is a terrible time to buy a car. Why? It is slow so you'd think they'd be eager to deal. Well, yes and no. The showrooms are, basically, empty except for you. There aren't customers wandering around, looking for a salesman because everybody is busy. Every customer who walks into a dead showroom has every manager, GM and possibly the owner watching from a distance. You are their savior for that day. They need to milk every penny they can out of you to make the day. They won't rush a single thing. They have all day to make a sale (to you) and will take every minute to wear you down.
You are a target for every trick they have, every offer they have and every manager will sit with you to get your money.

How do you know when this is? Well, if you walk in and it's empty at noon on a Saturday, it's a bad time.
If you walk in any evening at 7pm and it's empty, it's a bad time to buy. I will list the good times to buy.
If the time you are thinking of isn't listed as a good time, it is not a good time.
If you walk in and 10 sets of eyes follow you and the place is empty, IMMEDIATELY ask how to get to service.
Then walk thru service and leave out their door. You will feel when it's not a good time. It is obvious.

 

[larryh1108]

... (con't)
Good times to buy. As mentioned, the last 2 days of any month. The factory may not have any bonus cash but most times the managers must meet certain store sales goals to make a bonus. The salaries of Managers is OK but the money is in performance bonuses.
A Used Car Manager may make bonus at 50 used cars sold for the month. A New Car Manager may make bonus if they sell 50 New cars that month. They actually compete for sales on people who are not sure if they want new or used. Sales Managers get paid on both new and used sales so he may have to hit 100 cars to bonus.
If the managers miss their goal/bonus, it is a long and brutal week for the group that failed. New car sales and Used car sales are so different that most dealers do not allow one to sell another (new sell used and used to sell new), The process is different, the structure is different everything is different. Some dealers usually allow the older pros to cross sell. These are usually Used Car salesmen (best money job) who can sell New Cars (poor money, entry level positions). In rare cases there are
New Car salesmen who have been there 20+ years, have a ton of old owners and their family members and their coworkers, friends and neighbors. These guys never take a walk in, only sell new and usually lead the sales board each month. This is because they are still there, 20 years later and their previous
customers love how he treats them and their referrals. These salesmen will pay a referral fee to their owners for a successful sale, usually $50 or $100 or a free oil change. These old pros make $100k a year, plus. (We will discuss pay plans later, in another section).
I mention this because it shows why the last 2 days are critical to everyone at the dealer. Salesmen also get volume bonuses usually in the area of $500 for 12 cars sold, $750 for 15 cars sold and $1000 for 20 cars sold (this is on top of their regular pay). So, some salesmen are extra motivated to get 2 or 3 extra sales to make bonus.
However, no one outside (you) knows if they are close to bonus, which salesman needs that last sale or 2 or, if they've met their goals, everyone relaxes and just sells.
(That is a good thing as buyers can sense urgency and/or a relaxed salesman). Some dealers won't pay any bonuses to any manager or salesman if a total store goal is not reached. This makes everyone work together but it also pisses off the good people if others drag down the whole store. It can create resentment among the sales staff, between sales and management and management and ownership if the goals are too high or there is just a bad month due to the economy.

During these 2 days, everyone is usually too busy to waste their time, and yours, in milking the process. They are all there to sell as many cars as possible. They have more customers than sales staff so many salesmen "stack" customers. They work 2 people at once. When 1 is test driving, the other is filling out the paperwork. Good salesmen make this a seamless process and bad salesmen are not allowed to stack, for obvious reasons.

Get them in, get them out. Next! Offer them a fair price where you are not trying to ask for the moon and they'll usually say yes. If it won't work for them, they will counter with their best deal. No BS here. Yes or No on your part. If no then thank you very much and bring the next customer. No hard feelings. The same with the finance office. Usually 2 or 3 people are waiting in line, getting impatient. Finance guy rattles off his list.... Warranty? No, ok. GAP Ins? No, ok. Life Ins? No, ok.
How about a service plan. Yes, all scheduled maintenance for the first 36/36000. Price? About $10 a month. yes, ok. Cash or finance? Cash? ok. Let's go.
Literally, 5 minutes later you are signing. During a slow period? An hour later because he has to explain EVERYTHING he is trying to sell, in detail. Ughhh,


Ok, we have the last 2 days of the month, check.
Next we have the Year End sale. This is probably the best time to buy a car.
From Thanksgiving until the New Year, every dealer wants to sell cars, preferably the old model year but any car will do.
This is their last chance at a yearly sales bonus, factory bonuses for extra ordinary sales of Model ZZ, etc. No one wants to carry over a 2019 when the calendar says 2020. The factory offers tremendous rebates and financing. $3500-$5000 factory rebates. $1500- $2000 dealer rebates.
1.9% for 72 month. All for the old model, of course. The new model years get minimal attention. Stair step money? Yes, on some slower selling units
that are getting old at the factory storage lots. Not all models, certainly not the popular models but there are some slower movers that get that extra stair step money.
You see national ads calling for $7000 off MSRP! on certain models. Yes, a $5000 rebate on that $65,000 truck plus dealer cash rebates of $2000 means
$7,000 off MSRP. Great deal. Did anyone notice that the dealer is still getting his MSRP because only rebates are mentioned. SO, on that $65,000 truck there could be another $3500 in invoice to MSRP markup to work on. Dealers will usually use this to over allow for trade ins showing the buyer he "stepped up" on his trade.
All he did was use $2000 of the $3500 markup to show the trade in allowance as a number you like ($2000 more than the original offer). They still made $1500 in markup but you know what? They deserve it. They deserve profit. If you are getting $7,000 in rebates PLUS an extra $2,000 for your trade, you did damn good.
You got a great deal and the dealer actually made some money. Win/Win.

Same as the last 2 days of the month, there is very little BS at the dealer. The showroom is packed. The lot has people wandering all over it. You are sitting at the salesman's desk. Your turn. You make an offer. The dealer accepts or counters. He counters but your trade allowance is too low. Dealer bumps it another $1000 (great guy, huh?) You agree or you move on. NEXT! No BS, no time to play games, time to sell a car or truck and take the next customer.
Fast, efficient, breath-taking. Fun? For the dealer, yes. For you, you wondered what the F just happened. Yes, you bought a new car. Yes, you got a good deal.
Yes, there might have been more money to be saved but the dealer gave you a great deal and you saved thousands. Buyers remorse? Sure, everyone has it. Bad deal?
No. Not for you. Not for the dealer. Everybody wins.

Another good time to buy: August and September; End of the Model year sale. Next year's cars usually come out in late summer. Years ago, it was August. They used to put paper up on the showrooms so no one could see the new models. Now they trickle in with no fanfare. They want to sell the old stuff. The factory wants you to sell the old stuff. The incentives are on the old stuff. Good rebates and special financing. Dealers are busy and aren't as pushy. They want to move cars. The last days of the month in Aug and (esp) Sept is like above but a little busier.

Also, June, July and early Aug is slow, slow, slow. Don't go! Who wants to walk on 120 degree asphalt looking at cars? Not the salesman. Not me. You should stay away as well. As mentioned above, when you are the only one there, 10 sets of eyes are watching every move. You will be shown every option possible. It will take 8 hours. You will get to meet every manager in the store that day. It will be the worst experience you ever had.

Another decent time but less lucrative for you is Tax Refund Season. Dealers know you have extra pocket cash and they want it. The factory puts out some rebates
to entice. Rebates OR special financing, not AND. They know buyers who want a car and have cash will buy during tax season so they slow you down and
try to take your refund and put you into a car. Usually less experienced buyers show up. Usually credit challenged buyers show. Used cars sell better than new cars because many people like to pay cash for a car and used is what they can afford. It's an OK time but I'd wait for better deals.

January has tremendous deals on the old model year units. However, the better choices are gone and the undesirable units are left.
Great deals on nasty colors or missing options. You want a 4 cyl stick and no A/C and don't care about color, go in January. You will get a huge deal. The dealer will do whatever you want to get that turd off his lot. You will be well loved.

So, if you want the best deal, go the last few days in Nov and especially Dec.
If you want really good deals, go at the end of Aug and especially Sept.
If you want a decent deal then go the last 2 days of any month and hope they need to sell cars.
Any other time? Stay away. Run, don't walk. You do not want to be anywhere near a dealer when he is bored and slow. You would regret it.

 

[JimP42]

Great thread, and I really appreciate the info. I mostly buy used, but good to know just in case.


Sent from my iPhone using Tapatalk

 

[larryh1108]

I will do a thread on buying a used car.
Similar to this thread.
It is a different animal all together!
Much of the advice is the same, however.
Especially the interaction between buyer and salesman.

 

[TripleO7]

... (con't)
You do not want to be anywhere near a dealer when he is bored and slow. You would regret it.

The 5 hour close...good times.

I've got a recommendation. Decide what you really want. Troll the lots when they are closed. Do your research. Then proceed.

When you want a test drive, fully expect to be worked by a salesperson. It's their job. No one expects you to not do yours. If your lucky you'll run into someone with good product knowledge. A good one will admit if they don't know, but they will know where to find the answer. Remember, it's not a museum.

If you want to avoid that, rent one for the weekend to see if it is really for you.

 

[larryh1108]

Thanks for your explainations larryh! I think everyone its important to keep in mind in the negiations process of buying a car it is a short term sell/deal in the grand picture although dealers love to keep repeat buyers. The Individual and Dealer more than likely are not going to be interacting on a weekly basis after the deal so the dealer has to maximize his profit at the deal without making someone walk or unhappy and the individual is trying to save the most they can making it more like haggling. You both have things important to you and they may or may not be the samethings in the deal and willing to give up somethings and not others. Dealers are taught and historically like for you to do the negiations at there place as a buyer tends to have more emmotional attachment to telling someone “NO” in person. Human nature that most like to avoid confrontation. This is why internet sales work in buyers favor and not the dealers, hence dealers do not like it as the buyer does not have the emotional attachement to seeing the actual car and wanting it “now” and they do not have to tell someone “no” face to face so its easy to walk and go multiple places in a short time. The internet has changed purchasing for good/and bad depending which side of the fence you sit on.

I agree with everything you mention here.
Newbie salesmen do get fired on the spot for not taking a potential buyer on a test drive before they sit them down at their desk.
Of course, the manager waits until the customer leaves but if this salesman continuously tries to cut corners in the process, he is told to leave
with the customer.
Why?
Well, you mentioned why.
You put a customer behind the wheel in a car they are interested in, they immediately see themselves as owning it.
They adjust the mirrors. They adjust the seat.
They smell that new car smell.
They look in the rear view mirror and see their reflection, sitting in their car.
In their mind, they can see themselves bringing it home to show their friends and family.
A test drive is HUGE in the process, for the dealer.
A buyer binds with the car.
They become emotionally attached.
Also, many people have a hard time saying "No" to most people in their life.
It may not be in their genes.
Of course, we KNOW there are guys who have absolutely no issue in saying "NO" and emphasizing it so you know he means it.
However, I've found that a lot more people are polite and/or timid and cannot be rude to the salesman, or anybody for that matter.
On the net, they have no problem saying "no" because they do it all the time with the rude net surfers.

 

[TripleO7]

I will do a thread on buying a used car.
Similar to this thread.
It is a different animal all together!
Much of the advice is the same, however.
Especially the interaction between buyer and salesman.

Let the games begin!



Shooting and since this is a firearms forum.

 

[larryh1108]

I also add that they should probably only be willing to purchase the one offered by the manufacturer. Not the one the business manager gets a spiff on from an insurance company. When our "box man" was pushing crap, I always told my personal peeps to insist on Ford ESP. Got in trouble a couple of times, but those guys came and went, while I was never in fear of losing my job.

Very good point and one I wish to expand on.
I totally agree that the ESC that the Mfg offers is the way to go. For some reason the Finance Guy never mentions it.
I wonder why......?
Wait, I know!
He makes less money selling the Mfg ESC than if he sells Brand X.
First, the Mfg ESC usually costs $200-$400 more for the same coverage.
This is because the dealer (owner) worked out a deal with the Mfg to get a kickback of $100-$200 (or more) for each ESC they sell. The Finance Guy is WELL AWARE of this and usually meets his quota by selling them to friends, family and good, repeat customers.
He also doesn't mark them up as much because they are friends/family to him. They get a better ESC at a cheaper price.
Why is it better? Well, when buying new you get the factory bumper-to-bumper warranty from day 1. When you get an ESC from the same Mfg, you
basically extend that factory warranty for as long as you want. If your ESC is nearing the end, you can add on a year or 2 from the dealer before it expires.
If you service your car at the dealer, he has (and the factory has) all the service records. If a major issue does arise (think thousands) your dealer knows you serviced it there, the factory knows you took care of it and any claim is usually handled without any bother to you. Seamless.

An ESC from a third party can be a crap shoot, depending on the flavor of the month the Finance Guy is selling. What does that mean? Well, there are hundreds of ESC companies out there. Hundreds. Some have been around for decades and are well known. They are still around because they service their customers well. Their process is nearly seamless but they don't cover everything a factory ESC does. If a major breakdown occurs, they require proof you maintained your car. If your dealer has been the only service provider then they have the records. No problem. They usually send out an adjuster to inspect the problem. That could take a day or two or three, depending on his workload. That keeps your car there longer. Verbiage in the ESC contract can state that if the car is more than 2 model years old, they can authorize aftermarket parts for replacement. They usually do because they are cheaper. The Mfg ESC will use genuine factory parts because they are the factory (so-to-speak). So, it will take longer and use less quality parts.

Also, if the third party ESC is a fly-by-night company they may not be around in 3 or 4 years when you actually need them.
Why would a Finance Guy sell you their ESC?
Well, #1 is they are usually cheaper. Not much, $75 or maybe $100 cheaper. So if you beat down his price to the $995 we discussed earlier then he'll probably pull out the cheaper, iffy company and give you that in your paperwork.
ALSO, many warranty companies (even the better ones) will pay a Finance Guy $50, $75, even $100 cash for every warranty they sell. Sell 10 at $100 ($1000) per and on the 10th of the next month the Sales Rep picks up all the new contracts and pays you for last months bounty. This isn't done sneaky or back door. It is part of the pay plan for the finance guy. Chances are the Owner gets the same bonus from the ESC company. All built in to your cost.

So, tell the Finance Guy (if you want an ESC) that the most you will pay (for a car) is $995 for the bumper-to-bumper, $100 deductible ESC that takes you
to 100,000 miles. (New car only). A 4x4 would be $1295. A turbo is up to $1495 and a turbo diesel can go to $1995.
Ok, he agrees, $995. If not tell him you'll get one online (you actually can if you are presently under warranty). Online removes all the little bonuses the owner and Finance Guy gets. So it could/should be $100 or more cheaper.

Ok, he agrees. $995. How about GAP insurance, he asks.
Whoa, you say, we aren't done.
I ASSUME we are talking about a factory warranty/ESC, right?
Finance Guy-"Well, no. I can''t sell the factory warranty at that price. It is a really good warranty, though. Just as good as a factory warranty!"
You - "Ummm, no thanks. Like I said, I'll buy it online. (You can offer $100 more if you want since it costs about $200 more).
Finance Guy - Nope, if you don't buy it at the time of sale you can't get a factory warranty anywhere else (lie).
You- Never mind then, I'll take my chances.

Now, a Finance Guy also has to meet sales goals of his own. Perhaps the dealer requires him to sell 33% of the buyers he sees an ESC. If he sees 60 customers in a month (usual) he needs to sell 20 ESCs a month to keep his job. Even if he only makes $1 on it, it counts as a sale.
However, he is also held to an average per sale figure as well. Imports like Honda, Toyota, Nissan, etc have a lower average to meet than the Big 3 (Ford, Chevy, Chrysler). Why? Well, the imports do a LOT MORE leasing than the domestics (this will be covered later). Also, selling an ESC is a hard sell for cars that just don't break down. Most customers say that their current Honda is 10 years old and other than normal
stuff they've never had a problem. That's why they are buying another. So, an import Finance Guy is required to make an average of $700-$800
per sale while the Big 3 guys are required to make $1000 per sale to keep their jobs. (Every job has their own goals to meet. This will be covered at
a later time as well).
So, his $1 ESC sale helps his penetration % (name for the required 33% of customers he sees) but hurts his average per. However, it is what it is.
His problem, not yours.

Lastly, the latest flavor of the month is that the actual dealer himself sets up his own warranty company (many hoops to jump thru and
regulations to meet to be able to do this). They need bonds, etc, to get a license to offer them. However, the larger dealers and dealer groups (5, 6, 7, 10 different locations with different franchises but the same owner) have the ability to create their own warranty company.
So, a Finance Guy is expected to sell the dealer owned ESC instead of the no name ESC the Finance Guy has been using. This is good and bad.
A well run dealer or group that has been around for years should still be around in 3, 4 or 5 years when you'll probably need it. A greedily run dealer whose only goal is to make as much money as possible for as long as possible may not be around when you actually need your ESC.
However, that is now what is being pushed and unless you specify Factory Warranty you will probably end up with whatever is handy that month.

SO, to sum it up, Factory ESC only.
Prices as discussed.
You can buy one online as long as you have warranty left on your car. However, the more miles you have the higher the cost.
If you leave the dealer and go home and buy one, it should be cheaper than the dealer offered.
If you wait to see if you want to keep the car and it has 25,000 miles on it, the same contract will cost more. If you wait until you have 35,000 miles and/or 35 months from purchase, it will cost more to buy. Probably more than the dealer wanted up front.

I have no interest in any other warranty/ESC. There are good ones and there are bad ones and who knows?
The best one for your money is the factory ESC, even if it costs $200 more (the cost is $200 more).

Don't be afraid to say "NO" when he pressures you. He will pressure you. You will be ok.
I seriously recommend an ESC on a used car. You have NO idea who owned it before and how it was cared for (unless you do know).
New cars? If you will drive it for 10 years, I say get one unless you work on your own cars.
The nice thing about ESCs is you can cancel them at any time and get a prorated refund. If you use half of it's time/miles, you get 1/2 refund if cancelled. If you paid cash, you get the check. If you financed, the bank gets the check but your payoff is less.
So, it's not really a gamble more than a rip off. Everybody's needs and wants are different.

 

[GymB]

So about the test drive...

Before test driving they need to see your license. You provide it and off they go with it, returning with keys 5 min later.

I’ve never had one not return my license, but I’ve heard of it happening. It makes it hard to get away later, when you want to walk out.

My question is simply, do they run credit at this stage? My guess is that they do. Anything else they do?

 

[larryh1108]

So about the test drive...

Before test driving they need to see your license. You provide it and off they go with it, returning with keys 5 min later.

I’ve never had one not return my license, but I’ve heard of it happening. It makes it hard to get away later, when you want to walk out.

My question is simply, do they run credit at this stage? My guess is that they do. Anything else they do?

Not returning the license is usually deliberate so you have to come back in if you want to leave.
Savvy salesmen "forget it" on the copier.
Absent-minded salesmen actually forget it on the copier.
When he returns with the keys, politely ask for your license and remain there until he gets it.

Do they run your credit right then and there?
No, it is illegal unless you sign a credit application with your signature approving a credit check.
If they run it without you signing or knowing, you have an easy lawsuit on your hands.
If they run it without your permission you do not want to do business there, ever.

 

[cold1]

Great thread from an insider. Thanks!

Getting up and walking out over $20 works. They wanted $20 more than we were willing to pay on the car. We walked out, the sales mgr called us 10 minutes later and said he could do it. He made money, we got what we wanted at the price we wanted win win.

 

[Pbj ak]

This has been an awesome thread. Looking forward to the one for used cars. We never buy new and try to pay cash for used.

 

[MCQUADE]

Tagging this one as I’m looking at buying a new or used Honda Fit right now. The “used” price ain’t that far off from a new one but I have yet to get an OTD price on either, just stumbling and mumbling. If the price difference is 3k or so I’d probably get a new one so I’d know what idiot drove it.

 

[Shady Grady]

...

 

[larryh1108]

The Good, the Bad and the Ugly.....
We've discussed the good: End of year and end of month sales. Being an educated buyer when you walk in the door. Having a good experience instead of bad.
We've discussed the bad: Buying at off-peak times. The "process" and the naive buyers. Pushy salesmen, managers and everybody else.
Now the Ugly!

Yes, the ugly side of buying a NEW car. There is an ugly side. Not every dealer does these tactics. Not every salesman pushes these options but they are out there and very real.
Many times I've been asked here how a dealer can survive when he makes so little money on a new car? The markup is what I stated. Usually a 5%-6% markup to MSRP. Usually a 2% holdback profit. On a $20,000 car the MSRP markup is usually $1000 (5% of $20,000) to $1200 (6%). Everybody wants $2,000 to $3,000 off MSRP because dealers rip everybody off. Everybody knows it. As has been explained, that just isn't true. Fake News! We have discussed, in detail, how the pricing actually (and truly) works. The markup is just not there. Rebates and dealer cash make up the discounts offered. The dealer has only a few hundred dollars to play with. That is the cold, hard facts. Many still refuse to believe it. I have no reason to lie. It's fact.

To make it easier to understand, the terminology we use will be used here, by me. It makes it easier to write for me and may be easier to grasp, by you.
Here are some terms I will use to explain things:
Front end profit - Profit made on the sales floor, out front (so-to-speak).This includes (but is not limited to) the profit from selling the car. Cost is from invoice.
No one gets paid on the holdback. Not the salesman, not the manager, etc. To the dealer, holdback is not profit. Front end profit comes from selling the car plus any options the salesman may sell for the car. This is called Aftersale Profit. Some dealers consider Aftermarket profit as part of the front end profit and others consider it separate, to keep track of this "extra" profit.

Aftersale profit is usually the evil part of buying a car. Salesmen usually get a better commission rate than the sales profit (usually 10% more commission).
Some aftermarket items are good and you want them. Side steps on trucks and SUVs. Bedliners. Splashguards, trailer hitches, tow packages, power roof (if not already there),
GPS (if not already there), nicer wheels, etc. Remote starters, alarm upgrade, tinted windows, chrome exhaust., tire covers, roof racks, the list is endless.
Many times the buyer wants this stuff. The salesman pulls out his trusty sales brochure and starts to add it all up. You are pumped.
Yep, the extras come to $3,750. Nice, you say, you get it just the way you want it. Well, offer him $3,000 because the markup on these items is pretty hefty.
Or don't ask for a discount. If you are happy then that is all that matters. You get it right away and it is done.
So, aftermarket sales is not a bad thing.... usually.

The above aftermarket items are things you may actually want... and will gladly pay for. No issues here.
Now let's talk about the slimy dealers.
The salesman sees that you have kids. You need the fabric protector for $399. (The fabric comes from the factory with a fabric guard).
Cost? 2 cans of off the shelf fabric spray ($18) and a porter $10 to spray it on. You can do it yourself for less than $20.
The service department gets $125 for this $18 item. The balance ($274) is front end or aftermarket profit (even though the real cost is $18).
Don't want it? well, all the cars you are looking at already have it. See? It's on the addendum. Right there.
*Addendum: A label, required by law, for any added items or product that does not appear on the Maroney Label (Mfg sticker).
Pin stripes? Used to be a fad but now-a-days not so much. Addendum says the pinstripes are $199. Dealer paid $40 or gave a porter
a $10 roll to put it on half the cars (He's usually pretty good at it because a 12 year old can do it).

How about an alarm? $799 for the latest, greatest with a signal to your phone if the alarm goes off! Very cool. Even has it's own app!
Cost about $275. Another $525 profit. Most cars come with a factory alarm that does a great job. Sorry, unless it is a high end car, no app.

How about those really nice wheels on that sporty looking car? $1495 gets you that look! They keep your new, factory tires and double the price of the
wheel cost. $700 profit plus an extra $400 for your "old" wheels which they sell in service to someone who hit a curb, for $150 or each.

Window etching (used to be huge in the 90s and 00s. The dealer uses an acid to burn a number onto each piece of glass on your car to be a theft deterrent.
Thieves can't fence glass with numbers etched on them because they can be traced. Retail? $299. Cost $10 plus $75 if you agree to pay the $299.
It is then registered with an insurance company for tracking, if stolen. You are told you receive a 15% discount from your insurance company
if you have this (partially true, you get a 15% discount on the comprehensive portion which comes to about $40 a year, depending on the make and model).
It IS a theft deterrent. You do save money on insurance. However, the dealer etches every car on the lot. If you don't pay him for it,
the retrieval coverage is never activated. You are "forced" to pay for it (cannot be removed). Why pay for something you didn't ask for?
If you refuse to pay, the glass is still etched and that makes it a deterrent. Putting it on every car is just sneaky. Also, it is plain ugly.

Floor mats - $199. Believe it or not, many new cars come without floor mats. Why? To give the dealer a chance to make some more money.
Cost? Well, you can get generic mats for $25 or so. Dealer carpeted mats are not cheap, maybe $120 or so for your model. Make them include it
in the sale of your car as a negotiation addition.

How about Color Guard or Paint Protection or whatever clever name they come up with. $395. Cost? $35 or so.
They sell this to think you are adding protection to keep your paint from fading. You are paying for a hand wax job, nothing more.
The factory clear coat is a darn good product. Waxing your car will never hurt. Paying the dealer $395 to wax your car is stunning.
Many times the addendum says it's already included. On every car. If that's the case, tell the salesman that you think you are at the wrong dealer.
Tell him that you will not pay for anything you did not ask for or want. He'll make it go away, or so he says. Service already billed $100 to the car for the
wax job so when he looks up the true invoice price, that $100 wax job will pop up as part of the cost. You will not get that extra $100 off. You may not
pay for it specifically but you won't get an extra $100 off, either.

Rust Proofing! Yes! Big up north! Who does not want rust protection on their car with all the salt in the winter? $895? Wow, that's a lot.
Well, if it keeps your car from rusting and you are keeping if for ten or twenty years, why not?
Well, the factory already has a 10 year, 100,000 mile warranty covering rust thru on any part. It's part of the warranty.
Cost? maybe $250 or so. They have someone spray (basically) liquid tar on your underside and inside your door panels. How do they get inside?
Well, they drill a hole big enough for the nozzle to get in so they can spray the tar on the inside of your doors and fenders. I know I don't
want anybody drilling holes in my door panels or wheel wells. I don't know about you.
Rust proofing isn't a rip off but it's worth more like $395 than $895. It does seem to help in the heavy salt areas in the north.

There is more but you get the idea. If it is slow and you are the only customer, be prepared to learn about every aftermarket option they offer. Every.... one...
Many times it's already on the car you want to buy. Tell them too bad because you didn't ask for it. As has been mentioned, the cost is already
built in so the worst you can do is get the item at dealer cost instead of the ridiculous retail they charge. Imagine a 2 hour torture in the
finance office listening to every product you can buy to protect your car or credit score. Yep, these dealers give every dealer a bad name.

These ticky-tack items are what frustrates the buyer more than anything. The dealer is now asking another $1250 for items that cost him $200
and which you don't even want. Dealers that have addendums on every car on the lot are definitely trying to rip you off. They are very evident.
If you are walking the lot and see one in every window on every car, just turn around and walk away. This is a very real sign that your
buying process will be a royal pain in the ass since he already added $1000 to the price of the car before you even said "hello".
Run, don't walk, away. Find another dealer who isn't so slimy. These types are not the norm but there are more than should be.
Be aware and do not be afraid to walk to your car and get the hell out of dodge.

 

[Ferrisfan]

I am looking to buy an electric vehicle within the next 24 months. Can you talk to me about vehicles that are sold in order to meet zero emission compliance numbers for certain states? Must they be sold to residents of those states? Is that a dealer decision or a corporate decision? Is there a benefit to the dealer to have a compliance car still sitting on the lot vs. selling it for no compliance credit?