Let's Make a Deal
August 19, 2011 4:19 AM   Subscribe

How can I get the best deal on a car? Based on my previous question, I haven't decided if I am going to buy or lease. For either path, what techniques and tactics should I employ to get the best deal. Where can I find reliable information on prices? Do I play dealers off of one another? This question is not about buying vs. leasing. Let's just assume I am going to buy one car and lease another. How do I get the best deal on both?
posted by jasondigitized to Travel & Transportation (12 answers total) 15 users marked this as a favorite
You want to watch this youtube video on how to buy a car.
posted by Another Fine Product From The Nonsense Factory at 4:26 AM on August 19, 2011 [1 favorite]

Read this, and do what it says. (That's the second time I've recommended the book today. I promise I'm not the author or publisher.) After you've read it, car salesman's antics will seem amusing instead of intimidating.

Consumer Reports has similarly good advice.

There are lots of ways that dealers try to get more money out of you. They can pretend that prices aren't negotiable, undervalue your trade-in, sell you a lesser car than you thought you were getting, tack on expensive but worthless extras, charge unnecessary fees, or arrange bad financing. It's a shell game, and lots of what they say to you is meant to mislead, confuse and emotionally manipulate you into consenting to do it their way. Car salesmen who seem like nice, trustworthy guys are usually just working the nice-trustworthy-guy schtick.

Don't do it their way. Understand what's going on. Know what you want. Know how much the car cost the dealer. If you start to feel confused or giddy, leave and try again another day.
posted by jon1270 at 4:46 AM on August 19, 2011 [1 favorite]

We used the method described in this post. And it worked like a charm. No crappy negotiating sessions. We were very happy with the deal we got and it took just a few days.
posted by chiefthe at 5:13 AM on August 19, 2011

This: http://www.carbuyingtips.com/.

It looks like a silly site, or one that's trying to sell you something, but it's got rock solid advice. A lot of it comes down to doing your research ahead of time. It also explains to you how things work from the dealer's side. Saved friends of mine thousands of dollars on their cards.
posted by Mercaptan at 5:17 AM on August 19, 2011 [1 favorite]

I've re-read this article about an undercover car salesman several times. Enjoyable and informative:

posted by GPF at 5:43 AM on August 19, 2011

I just bought a car myself! Here are things that worked for me:

This video:
* How to Buy a New Car and Not Get Screwed

A bunch of ask.me questions:
* Lease new or buy used?: For a bit, I was considering all options: leasing, buying new, and buying used. This discussion helped a bit to eliminate leasing as an option.
* Car Buying Virgin: Among other tips, taking the used car to a mechanic before signing any paperwork, always be willing to walk away, and get the Carfax were the important take-aways from this thread.
* This lengthy post might have been the most helpful thing I read. The step-by-step clarified the process and let me know what was coming next.
* How do I pick a car to buy? : Some things to think about, including good car recommendations.

The most important bit for me was realizing that I had all the power. There are literally dozens of dealerships and used car places. Play them against each other! Go to one place, haggle to the lowest price they'll hit and then call around. Just because a salesman spends an hour with you, doesn't mean you owe him anything (much less the commission on your car.) There are some great deals to be had now-- everyone's still trying to get rid of 2011's while the 2012's are starting to come in.

(Oh, also-- let it be fun. It's very easy to get stressed out and overwhelmed. Take breaks, take a walk, get snacks.)

You have the power! Best of luck!
posted by Flamingo at 6:23 AM on August 19, 2011

I haven't plenty of family that is now or has been in the car business and I was a salesman myself for a few years. I've had a thing or two to say about this topic in the past that should be helpful.

Here are a couple of addition pieces of wisdom information:

1. New cars are easier to negotiate than used. You can go to lots of places and see what the invoice price is and usually not pay much more than that.

2. Don't try to play on dealer off of another. It will only aggravate you and the dealerships and won't save you any money. They know that the odds are you'll end up buying from the last dealer you go to so dealer #1 might either give you a price that they know no one else can beat, you'll go to dealer #2 who will basically say, "Ah, so you're looking for a good buy? Good bye!" Then you'll go back to dealer #1 who will tell you all of the reasons why they can't actually give that price. Or, they simply won't give you a straight answer on price. Something like, "When you're ready to buy, we'll be ready to give you a good deal." Funny thing is, that last part is 100% true.

3. Negotiate on the price of your trade-in and the price of the care separately.

4. Ask about loan rates at your local credit union but plan on financing through the dealer (assuming you don't lease). Unless you're getting a manufacturer finance deal on a new car, the rate the finance office offers you is negotiable too.

5. If you lease, negotiate the price of the car (call the cap cost or capital cost) separately. Do not negotiate the payment under after the price is set (and they won't have much wiggle room with the other variable and they might not have any but it costs nothing to try.

6. I say this in the previous askme answers I linked to but it bears repeating both because it is the most important thing and because it feel counter-intuitive to most people. Assume that you'll be able to get the right deal until the price is the only thing standing in the way. Once you know that, if the price is right, you're on the right car. The way to get the best deal is to make it clear that you are there to buy a car right now. Not today, not soon, right now. Be clear about it. Say things like, "If you can make the numbers work, I'll buy this car home right now." If they ask for it, write them a check for the down-payment (they're testing your commitment and they can't keep it if you don't buy). Once its clear that the only thing keeping them from selling you a car is the price and that you're going to buy a car from someone that day, they'll do everything they can to make sure its them.
posted by VTX at 6:28 AM on August 19, 2011 [1 favorite]

I've used a method very similar to the post that chiefthe linked. I found it far easier to just use the phone (ask for the "internet sales manager," aka the person who deals with informed and highly price-sensitive people like you and me who don't need hand-holding and just want an easy price) because I like to hear tone of voice, but email should work just as well or better. And I don't name my price first, though I know ahead of time what price they need to get below.

There's also an element of knowing when to stop. If your target is $16,900 (like in that post), and someone offers you that, think carefully about whether or not it is worth several more days and many more hours of work to hammer them down to $16,800. There's a moment to take the deal because it is good enough; only you know the value of your time well enough to say when that point gets reached. For every car I've ever been interested in, there's always a couple of huge dealers somewhere in the country that publicize their super low pricing. You may not have any interest in flying to Texas or wherever to buy the car that way, but it's a really easy way to get an idea of what bottom-line pricing is going to look like.

And focusing on the out the door price (or whatever the lease equivalent would be) is critical. You don't want to get snarled up in all sorts of hard to compare numbers (say, monthly payments, or the price before the fees, which vary tremendously from dealer to dealer.

Lastly, don't forget to dig around a bit online and see if there are any rebates or promotions you qualify for. Many car companies offer "recent grad" discounts, military discounts, etc; there are many others but they can be hard to find out about and the salespeople will probably never have heard of them.
posted by Forktine at 6:29 AM on August 19, 2011

These site are fairly useful for finding out what similair cars are going for around the country:

clearbook -this one has used car prices aggregated from all over the country. I have found it too be very accurate for used cars-which are in a bubble right now and for desirable models less than 3 years old it appears to be a better deal to actually buy new.

truedelta -this is a site that relies on owners of cars to report problems, gas mileage and such. It is really helpful for long term real world experience in a way that consumer reports is not. Please participate after you buy a car-the more people on it, the better it is and the guy who runs it is awesome.

car price graph - kinda hard to read but lots of good information about the range of car prices for a bunch of metro areas.

And I would read/check The Truth About Cars website for reviews on the model/type you are interested in. Lots of the stuff on this website is pretty gear head centric but also good information about the car business, trends and upcoming models. A couple of the posters are also in the seedier side of the used car market and not shy about telling people how they run their business (not really predatory but not a shining exampe of human behavior either).

My negogiating style is pretty brutal. I will pay x for a car (what i feel is a good price and fair to both parties), take it or leave it. I either pay cash or arrange my own financing. I hate haggleing but love cars and this really helps me on keep on enjoying cars.

The only time I change my price is when the seller can show me that the price I am offering is way off (has happened 1 time in 20 years and about 10 cars-a really exceptional honda prelude).
posted by bartonlong at 8:34 AM on August 19, 2011

Some negotiating advice I've heard, which seems to make sense to me:

1- You are in the drivers seat, mostly. Unless it is a car that's in high demand and they know there is someone who will buy the car if you don't pan out, YOU are the one giving THEM the money. That's the business they are in- getting money.

2- Negotiate the small stuff first. In the case of cars, that means the various options and trade-ups. The value of your trade-in is next. Then haggle on the sticker price. Each side is trying to get the other one emotionally invested in making the deal. If there are conceptually 10 different points to be negotiated on, and you already agree on 9, the deal is 9/10 done. Make sure that last point being negotiated is to your advantage.

3- Sometimes, dealers have deals with finance companies that give them kick backs that make it in their better interest to have you finance the car through them versus you paying "cash" or self financing. If that's the case, have them explain it very carefully, and if there are no penalties to you for paying off the loan early, go ahead and take the deal, and then pay it off later.

4- Never play their silly sales tricks. The one I hate the most is the "I'm going to write a monthly payment of this piece of paper, if I can get you a deal with this payment, will you buy today? If so, sign this piece of paper." They like that for some reason. If that shit starts, ask to talk to someone else, or just leave.

5- Know what is realistic. Be willing to let them play some of their games. If you have a trade-in, figure out what a realistic ending number is. If you know you should be able to get the new car for $10k + your old car, it doesn't really matter whether they give you $1000 for your car and price the new one at $11k, or whether they give you $2000 for your car and price the new one at $12k. Either way, you are walking out the door paying $10k plus your old car.

6- Leasing is just a different financing option, treat them the same way. Negotiate everything else the same way, and then choose which financing option suits you best.

7- If you live in a large area with lots of cars, you can often buy the same car through multiple dealerships. They have internal agreements about transferring cars to one another. You may be able to use this to your advantage. Just make sure you specify that you aren't going to pay any transfer fees, and that the car must be transferred on a flatbed truck, not by being driven by the 17 year old intern. You MAY have to agree to purchase the car if they transfer it, and that's OK, as long as that agreement says it MUST be the exact car with the exact options you asked for, and there is no damage or other hidden defect, or you can walk away.
posted by gjc at 8:42 AM on August 19, 2011

4- Never play their silly sales tricks. The one I hate the most is the "I'm going to write a monthly payment of this piece of paper, if I can get you a deal with this payment, will you buy today? If so, sign this piece of paper." They like that for some reason. If that shit starts, ask to talk to someone else, or just leave.

I agree with the first part of this, don't negotiate on the payment, they're just trying to muddy the waters. But if they ask you sign something similar that says something like, "Jasondigitized will buy car X for $X," go ahead and sign it. The signature is purely symbolic and doesn't hold you to anything. Basically what they are asking is, "Is the only remaining objection price and are you a serious buyer who is worth our time?"
posted by VTX at 8:53 AM on August 19, 2011

Just to clarify a few points on negotiating leases. Basically, everything is the same as buying but with a little bit different jargon.

Instead of the purchase price, you have the capital cost (called the cap cost). Instead of an interest rate, you have something call a "money factor." Rather than a down payment, you make a "cap cost reduction."

There are also a couple of extra fees involved, a security deposit that you'll usually get back, you'll make the first payment, and few other minors things that you can basically count like you would interest payments.

You'll also want to ask about the residual value or buyout cost. That will be the price that you can pay for the car at the end of your lease to buy your car.
posted by VTX at 7:19 PM on August 19, 2011

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