Help me play 2 car dealerships off each other
June 29, 2017 5:17 PM   Subscribe

I've got two car dealerships in a battle for my minivan dollar: what next?

My wife and I are going to buy a minivan. We've narrowed our options down to either a Sienna or an Odyssey. Today I asked both dealerships (over the phone) to send me quotes for out-the-door prices on the base models of their respective vans, and alerted both that I'm looking at both vans and I'm going to go with the cheapest option. They both responded immediately with emailed offers that I know are well above their floor. The Toyota dealership quoted me $29k for a new '17 Sienna L, and the Honda dealership quoted be $26.5k for a new '16 Odyssey LX.

My question is this: what is my next move? I know they're both soft on these prices, and moreover I know that they're both desperate to move product given that it's the end of the month. My plan right now is to come back at them both claiming that I haggled with the other dealership and got them to go much lower, but I guess before I do I'd like to know what a realistic "lower" is. My instinct is to tell Honda $23k and Toyota $25.5k but my concern is that A) that's way too low and they'll balk or B) that's still leaving money on the table and I should go even lower. What's my ideal opening gambit here? I'm in St. Johns County, FL, will not be trading anything in, and will be transferring my own tag, if that's relevant.

Also, if you've been through this process recently and have any tips or tricks you'd like to share, I'm all ears.
posted by saladin to Travel & Transportation (16 answers total) 3 users marked this as a favorite
You're best move is to not come back with a price immediately. Start by telling both dealerships that they "need to do better."
posted by chevyvan at 5:22 PM on June 29, 2017 [3 favorites]

That's a great point and something I should have addressed in the question: should I even come back with a price at all? Both dealerships know they're competing with each other at this point... how do I maximize my advantage here?
posted by saladin at 5:24 PM on June 29, 2017 [1 favorite]

"Desperate to move product" may not be accurate, as dealerships often have tiered sales figures they have to beat in order to receive tiered bonuses from manufacturers. If they're close to but still below the sales figure goal they'll be willing to deal; if they're just over the threshold with no shot at making the next level, they're more likely to stand firm.
posted by infinitewindow at 5:27 PM on June 29, 2017 [7 favorites]

Never have both decision makers in the room at the same time. Then your exit is "ok, sounds great, but I'll need to talk it over with my wife".
posted by Leon at 5:31 PM on June 29, 2017 [1 favorite]

Email/call a third and fourth dealerships and ask for a better price on the same model.

Use AAA / consumer reports buying service.
posted by St. Peepsburg at 5:33 PM on June 29, 2017 [3 favorites]

Are these cars on the lot? Whichever one you prefer, find something wrong with it. "I was hoping for a different colour"
posted by thenormshow at 5:40 PM on June 29, 2017 [2 favorites]

You need to find out what the invoice prices for both of those vehicles are. You can't just throw out numbers that you hope are right. Do some research, decide on what you will pay (that you know they can actually do) and stick to that number. Be prepared to walk (for real, not just a fake) if they do not agree to it. Let them know that you are happy to go to the other dealership.
posted by rabbitrabbit at 5:43 PM on June 29, 2017 [5 favorites]

Once you've got the number you think they'll go with, get your bank draft, certified check, whatever, ready with the amount and the dealer's name on it. Then tell them, "if you can get to this number, we have a deal"

If you let them know that they can have a deal right now, they are more willing to agree to the price than if they are just giving you a quote to take back to the other dealer.

But this tactic is only useful at the very end.

You have to convince each dealer you like the other one a bit better. You're settling for them because of the price.

Being ready to walk away means being ready to walk away.
posted by thenormshow at 5:55 PM on June 29, 2017

You can set a much lower price and see. Also tomorrow is the end of the month. To meet quotas they might be willing to give you a screaming deal Friday if you intend to come in that day and they are short of what they need to show the manufacturer they have sold.
posted by nickggully at 5:56 PM on June 29, 2017

On the Honda the Truecar price is $25,465 for a base model and the Toyota is $28,143. There's no way you're going to get another $3000 off of those prices, they don't have that much room to deal. /r/askcarsales has really good advice from real car salesmen and they'll tell you what you can realistically expect to spend.
posted by Grumpy old geek at 6:09 PM on June 29, 2017 [10 favorites]

If the Honda is a true '16 new, as soon as you drive it off the lot, it will have material depreciation. I would go to them with you best lowball that is a take it or leave it and if they say no, get the Sienna. Ask the Honda guy what his 'floor plan' is. That is the cost to the dealer to borrow the money to have the car on his lot. The dealer finances it with the manufacturer just as you do with the dealer. If it has sat on his lot for a year, he is going to lose money or not make any on this deal regardless. He wants it off his lot. He knows his first loss is his best loss. He cannot afford to wait for another buyer that already has not materialized for a while. You have leverage with the Honda. Not sure about the Sienna.
posted by AugustWest at 7:01 PM on June 29, 2017 [2 favorites]

These are brand new cars?

If so, look up the invoice price using your source of choice. I like Try to find an actual example of what you're looking for just so you can match the build. There are sometimes things like floormats are technically options but dealers can't order cars without them. The MSRP should match up to something you can actually buy.

Typically the best you're going to do is about $100 over the invoice price before any rebates, taxes, or fees. I think $300-$500 over invoice is totally fair. To be clear, I understand that the "out the door" (OTD) price is the number that you're most concerned about, the invoice price is the number the dealer cares about. The taxes and fees aren't really up to either of you. Feel free to have them show you and work with that number, but I think you're going to have an easier time negotiating based on the invoice price and asking them to ALSO note the OTD.

Toyota typically makes a fine product and it's hard to go wrong with either of those vans. But, when I was selling new Nissans for a living and they launched the brand new Quest minivan. They had a live demo comparing the new van to it's major competitors. They didn't dare bring a Honda van because it was just a better van. I wasn't impressed with the Sienna then but it's been redesigned since and I've not followed the products as much since I've been out the car business.

I would still bet on the Honda being a better van, full stop. The complicating factor is that sometimes and/or in some places Honda's generally and the vans in particular usually sell at or well above MSRP.

Assuming that both dealers really are desperate*and you you can get them both down in the that $300-$500 over invoice range (again, before rebates and other discounts you might be eligible for as well as taxes and fees) you'll be getting about the same deal on either van so it really comes down to the OTD cost (I imagine the '16 has an extra -$1,000 off or something) and which one you like more and fits your needs better. I think

Were I in your shoes I would first check to see if my employer participates is either manufacturer's employee purchase program. If they do, you get a pre-negotiated price that will be lower invoice for which the dealer will be thrilled to give you as they get some kind of back-end money or benefit that make it's worth their while. As a salesperson, I LOVED these deals, I worked close to at time the Medtronic and 3M HQs and sold more than a few cars that way to people. A couple of times we already had agreed on a deal until I found out where they worked. I'd come out all serious and say, "Look, I know we had a deal but that deal is off."

-queue customer's suspicious face-

"Since you work for they've worked out a better deal for you on your behalf as an employee benefit. You get a lower price than what we could otherwise sell you at a profit. The only catch is that the price isn't negotiable. Is that okay with you?"

Failing that option, I would simply say, "The MSRP on that car is $xx,xxx and the invoice price on that car is $yy,yyy. If you can sell it to me for (whatever $yy,yyy+$300 is), I'll buy it today ('right now' if you're physically there). I'd also like to see what that works out to as an 'out-the-door' cost before I commit."

The magic phrasing is basically, "If you can do thing/price/thing+price, I will buy the car now (or as close as is realistically possible)." Motivated buyers get motivated sellers and that motivates them to make a deal. It's common in these parts to ask for a signature from the customer agreeing to the offer and at least a $100 check as a deposit. Neither is legally binding and you get the check back if you don't buy a car.

If you go in to test drive both cars to compare, do not bother with the price until you know which car you want to buy. A few hundred bucks worth of better deal doesn't really affect the difference between the cars so you can basically evaluate them based on the invoice-rebates price. I hope that makes some measure of sense.

Um, what else.

Keep in mind that a lot of the sales process is designed to, and let me put this VERY charitably, help customers get over their own apprehension and buy a car. As part of that they put on a friendly face on a process makes it seem like they're in control and it's part of some process. By all means go along with the process, but realize that you're free to leave at any time and you're under no obligation to do jack squat. Pretty much anything you do can be undone until you take delivery and drive the car off the lot.

Go along with the process but when it comes time to talk money, be polite but firm and stick to you guns. "If you can sell it for $x, I'll buy it right now." Be a broken record and if they can't do it, the other guy probably can and you can say, "Look, I like this van better but -the other van- is still a very nice van that I'll be happy with. So, one last time guys, $300 over invoice and I buy the car right now, if not I'm leaving."

They might chase you out the door or try to get you to roll down your window or something shameless like that but please don't reward that behavior, just keep walking/driving. They'll probably call you but it's up to you if you want to answer. They might meet your demand with that phone call. Something like $500 over invoice would probably be close enough for me if you're that close at any point.

After you work out a deal to buy the van, you don't have to be done negotiating. You'll go see the finance manager to "sign out" on the deal where you will fill out and sign a bunch of paperwork that start the process to document and pay for the sale. If you're taking out a loan, you should feel free to shop around and then let the dealer try to beat that rate. That rate, as well as the price of everything else offered by the finance manager is negotiable.

I sold cars for about three years myself, my uncle owned a dealership, and my father has sold cars or managed sales people for over 25 years. Things can vary a lot by region but I have some experience in this area. A customer who didn't take a lot of time, went on a short test drive, told me they're a buyer at invoice+$300, I'd slap the manager that didn't take that offer after telling him that I'm sure the customer is firm on that price, put you in "the box" to sign out as soon as I could, give you a quick and solid delivery, and get you out the door before my dream ends and I wake up.

*Some times customers coming in at the end of the month are told "it's the end of the month, it's the best time to get a good deal!" while customers at the beginning of the month get, "It's the beginning of the month when management really wants to get off to a strong start. It's the best time to get a good deal!" I can give you a line for the middle of the month too.

posted by VTX at 7:42 PM on June 29, 2017 [12 favorites]

I work in Internet Sales and sell Siennas. If you called me and said another dealership offered you a 2017 Sienna L for $25,500 OTD, I would tell you to RUN AND PURCHASE that Sienna from the other dealership. I know what other dealerships can and can't do. Maybe shoot for a more realistic offer?

If a dealership reeeeally lowballs you on the phone, they're probably going to add a bunch of addendums, etc once you're there. Going back and forth on the phone will only get you so far. I mean, it's good to ask if they honor Costco or any of the other discounts that are out there, but don't spend all day playing games with sales. Find a dealership that has the exact Sienna you want so you don't have to pay any "transportation fees*" for a dealer trade. Then go in and see what they can do for you.

Are you paying cash? The pricing they are quoting most likely includes the cash rebate. If you're financing, that OTD price could change. Seems obvious, but a lot of people don't realize that when they come in.

Happy shopping! I'm sure you'll get a good deal on your new Sienna!

*Not all dealerships charge for dealer trades, but no one is desperate enough to take a crazy loser deal and then have to drive 30 miles to get you your Sienna. Sorry.
posted by pea_shoot at 7:51 PM on June 29, 2017 [3 favorites]

Read this Toast article and do what it says.

Using this method I have in fact gotten $3K below the Truecar price on a new car. But you need multiple dealers of the same brand to play off each other. And you need real competing offers.
posted by medusa at 9:29 PM on June 29, 2017

Your best bet is not to play the dealerships against each other, but to play the Honda dealer against Honda. A lot of times the best deal you will get will be when the next year model is about to come out. Even more if the new model is a marked improvement over the old. In the case of the 2016 Odyssey, it is a double whammy: It is about to be two model years behind very soon and the 2018 is a new 5th generation, where the 4th was 2011-2017 models. Honda is heavily advertising the 2018 as a "game changer." Who is going to want a "new" 2016 next month? Do you even want it? If you are willing to accept an old version of a tired model, that is your angle.
If you want the Odyssey, first you should determine how long the dealer has had it. There should be a sticker on the driver door frame with the manufacture date. (There is one in your area with a date of October 2016, so that one is not really that old.) I don't think Florida has an inspection sticker, but there may be a transfer sticker on the windshield that may tell you what month the dealer took delivery. Remember, it costs them money to have that van sit there, even though they may be compensated by Honda. But they are using credit and capital that could be used very soon to stock a 2018 in its place that people are more likely to want.
Another thing to look at is the miles. If it has been there that long it might have been a loaner or a demo car. Those miles will come out of your warranty, so there is some financial consideration there. I am not sure how you would go about finding incentive information for this because anything you find will probably reference the 2017 models since they should be trying hard to clear those out right now. But Honda probably has a dealer incentive for this old stock. If you go to test drive this ,unless it is a loaner, there is a chance it will need a boost to start since it has probably be sitting for a while.
Bottom line is they do not want the van, nobody that has walked through the dealership in the last x months has wanted that van, you probably do not want that van, but will take it for a killer price since it is about to drop drastically in value. Make yourself the solution to their problem.
posted by Short End Of A Wishbone at 12:25 AM on June 30, 2017 [4 favorites]

I just want to point out that you don't really need an angle. Odds are good that the dealer, the new car sales manager in particular, is well aware of every reason to sell a particular car. They track inventory turnover and they will always be motivated to sell the oldest cars in their inventory whether you point this out to them or not.

You don't need to play games, the dealer already knows every game you can possibly try to play with them and they've got a TON more experience on their side. I can think of at least three cars that I sold where the customer tried to pit against another dealer. Often times dealers are good enough at playing your game that they'll sell you a car while convincing you that you've won!

The reality is that if the dealership sells a car they're happy, period. If selling the car didn't make them happy, they wouldn't sell the car.

So it really only comes down to whether or not YOU are happy. It's not a zero-sum game, if you're happy, then you've won too.
posted by VTX at 12:43 PM on June 30, 2017

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