How do you (not) haggle when buying a car?

February 18, 2005 3:12 PM

I'm going to need to buy a car sometime soon and, from past experiences, I find this to be completely unpleasant. How can I make this easier or less painful? Have you used services that take care of negotiations/haggling?

I do pretty exhaustive research before I buy almost anything, so I already know what I'd like to buy and I have a very good idea of how much I ought to/want to (and don't want to) be paying for it.

Over the past week or so, I've attempted to use services that aim to take the butt-puckeringly annoying activity of haggling out of purchasing a car while still getting a fair price, but I've found this to be pretty frustrating as well. Using Costco's program, the dealer quoted me a price that was basically the MSRP + destination charge for the car. Using different services, dealers have told me things that can be verified as either simple deceptions or plain lies.

Have you used a free or paid service, like CarBargains or CarsDirect, to get rid of the negotiating part of buying a car? How did it work out for you? Would you do it again? What other services are there for this? Alternatively, how do you avoid or deal with the haggling aspect of buying a car? Or do you just buy from no-haggle dealers?

posted by milkrate to shopping (28 comments total)

If you buy from a dealer, do not finance through them. Go to your bank, get a car loan, and go to the lot with that check already in hand.
posted by TheOnyx at 3:20 PM on February 18, 2005

One option is to buy privately instead of from a dealer. At least that way you're haggling with someone who doesn't haggle for a living.

In my experience no-haggle dealers are just expensive dealers.
posted by mendel at 3:23 PM on February 18, 2005

A friend forwarded me this link awhile back regarding something called "The Rizzo Method." It's supposed to make buying a new car easier. Best of luck.
posted by crunchland at 3:27 PM on February 18, 2005

While I haven't done it, I've heard good things about the "fax attack" method of negotiation, in which you do it all by fax (not email, as most dealers don't take email seriously). You basically fax all the dealers in your area stating what kind of car you want and to give you a competetive quote. Mention that you are also seeking quotes from other area dealers and you intend to buy the one with the lowest offer immediately. The website Fighting Chance seems to be the originator of the attack, and offer to sell you a packet with pricing and market information on the car you're interested, and how to orchestrate a fax attack. I actually bought it when shopping for my last car, and it was quite informative. I didn't end up using the attack because I was being picky and wanted a car with very specific options. I've also heard that buying through the fleet manager is a good idea, but I haven't heard the specifics on how to do that. Or buy a car where you can't haggle, like a Scion or a Saturn.
posted by zsazsa at 3:28 PM on February 18, 2005

It looks like the Rizzo Method that crunchland linked to above incorporates a version of the fax attack. Looks pretty solid.
posted by zsazsa at 3:30 PM on February 18, 2005

I had a great experience the last two cars I bought (my first new cars). With the VW, I did some research and knew the exact model and trim level I wanted, so I called a few area dealers to get prices. They gave me the run-around but eventually gave me numbers. Then I went to VW.com and requested a quote. I got a quote almost $1k lower than any dealer telephone quote, and I only dealt with fleet sales, so it wasn't the high-pressure bullshit artists in the front trying to upsell you.

With the Honda I just bought, I used Edmunds.com for research and when I knew what I wanted exactly (I took a few test drives to be sure at local dealers), I put in a request for quotes from area dealerships.

I got three quotes all within a hundred bucks of each other so I plainly told the salesfolk that emailed what prices I got and what I wanted. Eventually one of the dealers wanted to beat the other offers and gave me the car for several hundred under invoice at the ultimate price I wanted in the first place. The whole thing was over in about 48 hours, from the first time I clicked "find me a price on this car" and a new car happily in my garage.

The internet lets you work to your advantage, playing dealers off one another.
posted by mathowie at 3:44 PM on February 18, 2005 [1 favorite]

I've used Edmunds, and Car Talk sites for research. They both have good resources for reviews and pricing. Many dealers ( Honda, Subaru, Toyota) don't haggle that much...especially if there is a high demand for the car you want. You can educate yourself as to a "Fair Price" and go armed with that info. Using your bank or credit union is a great idea, as they will try to kill you with the financing...also beware of the service contract, most are not worth the cash saved for that rainy day 3-5 years down the road.
posted by lobstah at 3:44 PM on February 18, 2005

On preview: While I haven't done it, I've heard good things about the "fax attack" method of negotiation, in which you do it all by fax (not email, as most dealers don't take email seriously).

I had good results from that method using email:

I bought a new car in September - after doing the research (of all the car sites, Edmunds seemed to offer the most useful information) and figuring out what I what I wanted, I emailed seven dealers in my (more or less) area, told them I was ready to buy at the end of the week, gave them the options I was interested in, and asked for a quote.

The few that wrote back a vague "I think we have something with those options, come on in and we can make a deal" type of message were sent a polite request for an actual offer on an actual car.

It took about 3 days to hear from everybody. At that point, I discarded all but the best two offers, told my second best they were, well, second best and asked if they could do better. They could not, so I emailed again with my lowest price dealer, they reiterated the offer and I said I'd be in on Friday. Friday morning we walked into the dealership clutching a printed copy of the email proclaiming that we wanted to see Mr. XXXX and we wanted XXXX car for $XXXXX, and that's exactly what happened.

Having the printed offer gave me (usually a timid negotiator) confidence to not take "no" for an answer. Plus (having done all the legwork beforehand), if things started to go downhill I was comfortable in stating that I was fully prepared to walk out and take advantage of an offer from dealer XXXX for a mere $200 more.

The only way this method is tough to follow is if you're in a very rural area and/or don't have a wealth of dealers to contact, but I figure it's enough money, and a purchase that happens infrequently enough, that I was willing to drive up to a couple hundred miles or so. The other advice I found valuable was to keep everything separate: negotiate price, then negotiate trade, then financing. And read every write-up/invoice they produce backwards and forwards, three times.

If you buy from a dealer, do not finance through them. Go to your bank, get a car loan, and go to the lot with that check already in hand.

That is one (good way) to do it. Our alternative: we shopped around for the lowest rate and then asked the dealer to beat it (which he did).
posted by jalexei at 3:45 PM on February 18, 2005 [2 favorites]

Some years ago, when the Internet had a little more novelty, my sister went to the autobytel.com website to get a deal on a Honda. She got one call back from someone who (when she went there in person) rubbed her the wrong way. She went to another dealer, who apparently had seen her name come up through the autobytel request, and basically rolled over unbidden--he said something like "you're on the Internet, so you know exactly how much you should be paying." He wound up giving her a better deal than she was expecting.

When I bought a car, I found the average price paid for that model on Edmunds, went in to the dealer, said "I'll pay that much." They haggled briefly, but assented, even though there is only one dealer for that make (Subaru) within 75 miles, which put me in a weaker negotiating position. The one who can walk away from the deal always has the upper hand.

Dealer financing--wish I had known better.
posted by adamrice at 3:55 PM on February 18, 2005

One of my friends, who needed a car NOW, went through AAA. I'm not sure exactly how it works, but they were quite happy, said they got a good deal, and that (apparently) if they didn't like the car, they could give it back to AAA, penalty free. This is of course, seccond hand, but I didn't see it mentioned so far. If you or maybe your parents, some other relative, are members, it's probably worth looking into.
posted by Medieval Maven at 4:03 PM on February 18, 2005

Alternatively, how do you avoid or deal with the haggling aspect of buying a car?

I use the New Car Price Service from Consumer Reports to get the inventory price. This report gives you the Consumer Reports Wholesale Price (which takes into effect the Dealer Invoice, Incentives and Holdback). Edmunds is close but not as accurate as CR. Stay away from Kellby Blue Book as that is a dealer friendly site. You should begin negotiating from this price. CU advises that if you pay 4%-8% above this price you have negotiated a good deal (Be sure to check out Consumer Reports as they have many free online resources that address such issues as MSRP, negotiating the best price, et cet).

Once I have determined the wholesale price I make a list of all the dealers near me (They include NYC, CT, New York & NJ).

Call a salesperson and get right down to business. I say something to the effect of, "Hi, Jeff, I know exactly what car & model I want [insert what you want here]. I am willing to pay [3.5% above CR Wholesale Price]. If I come in and see you can we make a deal? It will work out well for you b/c 5 minutes after I come in you can start looking for your next sale. I am not interested in hearing about how there is 'no such thing as a Holdback' or how 'you need to put food on the table for your children'. I want to buy this car and if it is from you fine, if not, there are 15 other dealers within 40 miles."

The best way to become comfortable doing this is practice. Call some dealers and consider stopping by one just to get the practice. You will develop a "pitch" that works best for you.

Sometimes I will have to make 10 calls before I find someone willing to make a deal like this. And I have had to walk out of the dealership because the salesperson lied on the phone. I have purchased a new car this way and have helped friends and family purchase new cars this way (Honda, Toyota, Hyundai and others in 2003 and 2004).

The financing is tricky. When interest rate are high (not right now) it makes sense to secure a loan from a bank. The trend the last 3 years has been that dealers are offering no-interest or interest rates (1.9%, 2.9%) lower than what you can get at a bank.

The problem is dealing with the finance person at the dealer. They are confidence men of the highest order. They will try and screw you so many ways (tack on more money to the total, e.g., "Hey, why not just put the sales tax on the total so you can finance that? No need to give me a check." Of course the 2K adds significantly to your monthly payments if you finance) as well as sell you extras you do not need (scotch guard for the interior, "paint protection" for the exterior) and extras that are worthless in my area (Lojack - the police in many areas of NJ, for example, have stopped using them b/c they get so many "hits").

You really need to be good with numbers and watch the finance person. NYT used to provide a list of all manufacturer incentives by make/model/month (Honda Accord/Feb 05/1.9% up to 60 months) but I just checked and it is no longer there.
posted by MLIS at 4:08 PM on February 18, 2005 [1 favorite]

My credit union lined up the exact truck I wanted, options I wanted, for the price I wanted. I showed up, my truck was washed and waiting. I drove it around the block, handed them the check, signed papers and left. Got it cheaper than I could find anywhere else. If your bank does car loans, they may have a similar service.

My credit union did the equivalent of the above-mentioned fax method, but since it was coming from a bank, the dealers knew I was serious and I never had to deal with anyone.

[The last car I bought before was a Saturn. Simply because I hate, hate, hate the car buying process as well.]
posted by Gucky at 4:20 PM on February 18, 2005

I bought a used Honda from no-haggle dealers. There was a certain amount of attempted upsell, both in the "are you sure you don't want to test drive our fancier model?" and "are you sure you don't need underbody protection?" ways but I basically had a fixed amount I could spend, had seen the car on the web site, knew it was a fair enough price and wanted to walk out with it. Mine was a low-end car but they sold Honda Certified cars there as well, meaning they come with a warrantee etc.

My only problem with this entire process was that all the cars these guys sell supposedly come with this nine point guarantee which has some value associated with it. I asked about it and was told it was only for certified cars [you can see the web page, what do you think?] and I had to basically put my foot down and say "Hey I saw it on the web page, I drove a long way to get here, unless you can show me on the web site where it says that my car isn't eligible I expect to walk out with this car and the guarantee, otherwise I'll walk out with neither." They did that "let me talk to my boss" thing for a bit and finally relented and sold it to me.
posted by jessamyn at 5:26 PM on February 18, 2005

The best way I've find is the credit union trick. Something else that helps is the "I know exactly what I want, and I'll pay this." If they balk, walk. It's your money. Keep that in mind -- if they start saying anything about how you shouldn't buy without foo, just say "You're right. So I'm not buying" and start to walk. Don't be afraid to *actually* walk.

A trick that should be well known -- if you're dealing directly with a dealer, buy in the last days of the month, when they're counting the cars for bonuses.

Finally, it is a market. If you're trying to get a deal on, say, a Mini Cooper or a Hybrid, forgedaboutit. Anything that's moving that well is getting sold at MSRP, if not more. (Notice how trucks and SUV have killer rebates and finance deals right now? Note how the Civic Hybrid, Cooper, and Prius don't? Hint.)
posted by eriko at 5:42 PM on February 18, 2005 [1 favorite]

I got a lot of good help in this thread.
posted by scody at 6:08 PM on February 18, 2005

Haggling is FUN, well, sometimes. The key is to remember is that the salesman wants this sale much more than you do. You can always go somewhere else. Of course if you want a mini-Cooper, bend over.
posted by caddis at 6:09 PM on February 18, 2005

My family has only bought used Volvos, all from a small, family-owned dealership, for the past 12 years or so. There's so little pressure that you might wonder if they want your business, but it's really excellent.

That said, my parents decided last year that they were sick of parking at the end of their 1/4-mile driveway every time there was threat of snow, and decided to get a 4WD vehicle. They consulted with the Volvo place, who recommended a Subaru Forester. They didn't need the car (this was key), and they knew precisely how much that they were willing to spend. So they drove an hour to a far-off dealership, out in the country. They went to a sales associate and said "we'll take a white Subaru Forester, please." From there, they said nothing. Not a word. They didn't crack a grin, they didn't attempt to bargain, they didn't answer any questions. The sales associate lowered the price more and more and more, until finally it was somewhat less than the price that they were willing to pay. That was when they said "we'll take it."

When faced with silence, people are desperate to talk. A salesman wants to sell you something. So if you won't talk, they will, essentially taking on the role of worst-case, hard-bargain-driving buyer and seller. My parents (both seasoned actors) tell me it was tough to do, but it was quite effective.

Anyhow, that's how they "(not) haggle" when buying a car.
posted by waldo at 6:26 PM on February 18, 2005 [1 favorite]

Did the email thing with three dealers. "One 7-seater Toyota Sienna please, medium trim level, anything but white." Informed the others of better offers. One guy got snarky, insisted I come in.

Me: No.

Salesman: If I give you a number you'll use my quote to get better deals from other dealers.

Me: Of course I will. As you would in my situation. If you don't have a quote for me we have nothing to discuss. Have a nice day.

Got our new Toyota Sienna for $400 under "invoice." Walked in to the place, which turned out to be the one 5 minutes from my house, and found out they were out of 7-seaters (which I'd gotten the quote for).

But it was all good. They offered me the 8-seat model (more expensive) for the quote they'd offered me on the 7-seater. A quick run-through with the manager to refuse all the ridiculous options (are there really people who pay an extra $300/month for the Super-Duper-All-Inclusive Warranty! Now with FREE OIL CHANGE!?) ...

and out the door. Total time in dealership: 45 minutes, paperwork mostly.
posted by sacre_bleu at 7:10 PM on February 18, 2005

The first thing is to just not care about the car.

That relieves all pressure. If you don't give a damn about the car, you can walk away without any regrets. It's just a big hunk of metal. It isn't you. It isn't your ego. It isn't your love. It's just a damned car.

With that attitude, it's quite easy to purchase a car. You first decide what sort of vehicle satisfies 90% of your requirements: what you plan to haul, where you plan to haul it, how much you want to pay to haul it. For that 10% that it won't satisfy, it'll probably be cheaper to rent-a-car than to pay extra for a do-everything vehicle.

Then you hit auto.consumerguide.com and look at reviews. Pick three vehicles that will satisfy your needs.

Then you hit autotrader.ca (assuming you're in Canada) and find prices for vehicles within your driving range. Note down model, mileage, bonus features, and price. Get a feel for what you'll be paying for a given mileage and feature set.

Go to your local dealers, see what they have, pick a car, make an insanely low offer, come up in price once the salesdroid has expressed shock and horror, make an offer a thousand less than the sort of prices you've seen on the net, and see what happens.

Walk out if you don't like how things go. There are many, many vehicles and many, many desperate dealers. You don't need to put up with any silly bullshit.

And then, if you're like my wife and I, you spot a car in the paper that seems worth checking-out, even though it's not one of the three models you'd selected, go down to the lot, discover the salesguy is really quite decent, take it for a drive, and buy it on the spot. :-)
posted by five fresh fish at 7:47 PM on February 18, 2005

Carmax.com was perfect for me because the price is on the car, no haggling allowed. I hate the very thought of haggling. I also hate wasting time on emailing, faxing, etc., to sleazy dealers who want to give me the worst possible deal they can. But I love love love my gently-used dream car -- and its extended warranty.
posted by naomi at 7:52 PM on February 18, 2005

Of course if you want a mini-Cooper, bend over
True, very true. There is an utter lack of haggling when people are just being added to the bottom of the waiting list (well worth it, though).
posted by shinynewnick at 8:24 PM on February 18, 2005

jalexei wrote "If you buy from a dealer, do not finance through them. Go to your bank, get a car loan, and go to the lot with that check already in hand."

THAT'S ABSOLUTELY ESSENTIAL! In my personal experience dealers have written the paperwork up with prices thousands more than the agreed price, disguised of course. SCRUTINIZE THE NUMBERS and don't take anything other than what you agreed.

Good luck!
posted by anadem at 8:50 PM on February 18, 2005

I had very good luck with carsdirect.com. I was able to buy a Camry for under the invoice with no haggling and everything was done very professionally. Check it out.
posted by jimbo1023 at 7:29 AM on February 19, 2005

If I may put a few things in perspective...

Having bought and sold over a dozen cars in the last ten years or so, I've learned a couple things.

-Most dealers are not out to screw you, and there isn't a lot of "haggle room" in the price of the car anyway. If they screw you, then you won't come back for parts and service, which is where the real money in a dealership is anyway. Trying to haggle them down to "invoice" is rather silly. Why would they sell you a car at no profit? Rule of thumb is usually 7-12% off the sticker price but demand, time it has been there, and package options affect this.

-Questions like "If I can make the right deal, will you take the car today?" are qualifiers. They need to know if you're a buyer or a tire kicker. If you're the former, they'll spend time working with you. If they are the latter, you're wasting the guy's time. Don't do that.

-The dealer doesn't just want to sell you a car. He wants to sell you a car, and then have you tell your friends that he did right by you so that your friends go to him. He gets three or four sales for trying to accomodate you.

-And if the deal just doesn't feel right, walk away. But remember this: Most salesmen will treat you with respect if you treat them with respect. If you come to me adversarial, I'm not going to make as much effort to make you happy. Just say, politely, "Thanks, but I don't think this is going to work." He'll either ask a probing question to accomodate your needs, or, if he's gone as far as he can, he will shake your hand and thank you for coming in and move on.

-Research is your friend, so is the Credit Union. Dealers DO get kickbacks from finance companies if you finance with them, so you usually can get a better rate. Also, get creative. Check around with leasing companies for your model of car and see if one has been turned in. My Credit Union handles lease returns and repos on their own lot, and there's a constant selection.

-When at the dealer, looking at the models on the floor which have been there the longest is a good thing. Most dealers don't actually "own" the cars. Their banks do, and after a car has sat on the lot for a couple months, they need to move it, because it starts to cost them money taking up space in interest payments to the bank. All the dealer really does is finance his receivables in that sense.

-As much as I hate to say this, the import dealers seem to be a little better about good sales experiences than domestics. Go into a VW dealership and hang out for a while. Most of them are fairly low key, informative, without being oppressive. Walk into a Chevy dealership and it's a different world....it's part of why I own VWs.
posted by TeamBilly at 8:50 AM on February 19, 2005

I came across this article at Yahoo. Three simple tips mentioned already, but useful for new and first time car buyers.
posted by brent at 9:18 AM on February 19, 2005

I've said this here before, and I'll say it again: remember that you're not only buying a car, you're buying a relationship with a dealership.

You're eventually going to need service, and it will be much less painful at a good dealership. Yes, you can take your car to any dealer who sells that brand ... but quite honestly, their own customers are going to be a higher priority than you'll be.

Picking a crappy dealership because you can save a few hundred dollars on the initial purchase is a bad choice.

Other than that, what everyone else has already said about doing your research, having financing lined up in advance (you may not use it, but at a minimum you'll have better leverage), and being ready to walk away.
posted by pmurray63 at 12:01 PM on February 19, 2005

Milkrate: My email is in my profile. (Yours is not, or I would have already emailed you ... ) My family and my personal business are very closely tied in with the automotive industry. I have information for you, but I don't want to post it here. Email me if you want it. ;)

Oh, and I will say that there are times when you want to get financing through someone else, but there are times when manufacturer financing through a dealer is VERY good. The best my credit union would give me on my new car was 9.8%, due to the fact that I'm a youngin' and this is my first fixed asset credit (as opposed to credit card, which is revolving credit) ever. Honda, for --certified-- used vehicles, is currently running a great deal where you can get 3.9, 4.9, or 5.9 financing if you've got decent credit. However, you do need to specify to the dealer that you only want to apply for that financing. They will make more off of that financing then they will from Jim's Auto Lube, Taco Stand and Auto Finance like they usually do.

The sum is: do research and know what kind of deals are available before you go into the dealership, read everything you sign very carefully, and make a list ahead of time of what you want and what you are willing to pay for it and have it written down in your pocket so that you don't stray from it.

(Don't think of it as buying an item like you go to the grocery store for, think of it as buying a really large item like a house that you really have to dot your i's and cross your t's for.)
posted by SpecialK at 1:50 PM on February 19, 2005

I've used autobytel three times, all with quite satisfactory results, for new cars. (I can't comment on how well they do for used cars.)

The nice thing is that the service is free (essentially, dealers pay the company $100 or so for every sale), and you should get nothing from the dealers but a flat quote. (You need to know exactly what kind of car you want, including options, but the websites mentioned by others, above, can help on that.)

The only downside is that the dealer who gives you the best quote (or sometimes, the only dealer who gives you a quote) may not be the closest (Ford or Toyota or whatever) dealer to where you live. And while you can take a new car to any dealer for warranty service, some dealers treat those who bought a car at their dealership better than those who did not (for example, providing or not providing a loaner car at no cost).
posted by WestCoaster at 4:54 PM on February 19, 2005