how do you haggle car prices

[magnanimous_j]

Some good info in this thread, and some really wonky info. I sold cars for 5 years, here is some of what I picked up.

Forget all that nonsense about not disclosing a trade or credit info or any of that. There are several ways that a dealer can make his money on a car deal. By selling the car at a profit, selling the car at a loss but picking up the trade for cheap, or on the back end (financing, warrantees, service contracts etc.) If he can’t make money any of those ways, and he doesn’t have some other motivation for wanting that particular car gone, he won’t make the deal. Waiting until the very end to bring up a trade works against you, because if you’re even at that point, the dealer has already found one way to make money in the deal, now he has at least two.

Also, we never ran credit without the customer’s written consent. I can’t imagine that it’s even legal, but until we got their SSN, we couldn’t do it anyway. A driver’s license is not enough. We took copies of the license for test drives so if someone piles the car and runs off (which happens), we can track them down.

Cash is worse than financing. We made money off financing, nothing on cash. In fact, you can get better deals by taking financing, paying it a couple months and then paying off the loan. I’ve never even seen a loan with a pre-payment penalty. Getting financing with a credit union ahead of time is a great option, but the factory banks can offer better incentives. So if Ford offers an extra 1000 off the car to finance with them, take it, pay the balance for a couple months and then refinance with the credit union of your choice. I personally like BECU and First Tech.

As far as back office products, warrantees can be valuable, but almost everything else is worthless. We sold stickers with the VIN number on them that went on all these parts that supposedly made the car easier to track if it got stolen and chopped. These cost 300 dollars. Things like aftermarket leather, sunroofs, head rest DVD player etc, never look or work as well as factory options.

The one “common knowledge” car tip that is absolutely correct is shop at the end of the month. Most dealerships pay unit bonuses to their salesmen, so they are extra motivated then. There were times where I would have given the car away if they had let me. Because even though I was only making a mini (minimum commission, usually $100), it was worth a couple grand to me because I would hit the next commission tier which was retroactive for the whole month. In the middle of the week, or in bad weather are good times to go. They might be more motivated to sell, if for no other reason than sheer boredom. On a drizzly November Tuesday, you might be the only customer the salesman talks to that whole day.

Many customers would bring their car freshly washed with a shot glass worth of gas in the tank. This instantly told me that they had every intention of trading it in, that day. Don’t do that. Side note, a lot of the trades were absolutely disgusting. What the hell do people do in these cars?

Buying used cars is trickier than buying new, for sure. Unless you have access to Mannheim, it’s impossible to know what the dealership paid for the car. Best thing to do is price it against comparable cars being sold elsewhere. Cars very seldom have more than 3 or 4 thousand dollars in built in profit in the price, so don’t bother offering half price. Most reputable dealers will provide a car fax for you. I like to find the cars with fender benders on them. If the accident is bad, it will say “airbag deployed” or something to that effect. But a car with a minor accident can scare off a lot of customers, so you can make a more aggressive offer and if the car was repaired correctly, it’s as good as new.

A lot of used cars will have dead batteries, or flat tires. This is not necessarily an indication that there is a larger problem, but it is an indication that the car has been sitting for awhile. You can be more aggressive in your offer.

Here is an actual secret that I doubt many people know. Do you know why the salesman always has to go talk to his manager? It’s because he doesn’t know how much they own the car for, so he doesn’t know how close he is to making a deal. His job is to take the counter-offer to the customer and gauge his reaction to it and then relay that information to the manager. What the salesman tells the manager partially determines what the manager does next. This is why being standoffish, poker faced, or overly aggressive works against you. If I didn’t think we were close to making a deal, I might say to the manager “This guy is a jack, he isn’t buying anything, let’s get him out of here” and the manager will lose interest in making a deal with you. However, if the salesman likes you, he’ll go to bat for you. “He’s really close to doing it, but he’ll walk if we offer over 250/month again. Let’s just do 240 and make this deal.” As much as emotion plays a big part in buying a car, it plays just as big a part in selling one. Negotiating is exciting and in the heat of the moment, a sales manager can get talked into making a better deal than he usually would. A salesman sells his manager just as much as he sells his customers, so make friends.

[Bean Counter]

....Can make it simple and smooth. Play dealerships against each other, even if they're really not. ......

There are plenty of good deals to be had without lying to people. I find honesty to be the best policy. Even if my a salesman is not honest. This is treating people the way I want to be treated. 

[Kittman]

Some good info in this thread, and some really wonky info. I sold cars for 5 years, here is some of what I picked up.

Also, we never ran credit without the customer’s written consent. I can’t imagine that it’s even legal, but until we got their SSN, we couldn’t do it anyway. A driver’s license is not enough. We took copies of the license for test drives so if someone piles the car and runs off (which happens), we can track them down.

Disagree with the above statement- Credit checks can be performed with just a driver's license.

http://www.consumerreports.org/cro/news/2009/09/car-dealers-can-use-your-drivers-license-to-access-your-credit-report/index.htm

[DOUBLELUNG]

Know exactly what you want, and what you want to pay.  The end of the month is key for the reasons explained; I try to deal with the sales manager because he is the one most concerned with the total volume of sales for the month.

My last purchase was a 2009 Dodge Ram 1500 crew cab 4x4 SLT package.  I made my best deal over the phone for exactly what I wanted with Dave Smith, right down to every option code.  MSRP was almost exactly $38k, Dave Smith was at $27,600 financed by them.  I called the sales manager at my local Dodge dealer, told him exactly what I wanted, and asked him if he wanted to save me a trip to Kellogg.  He said "I don't lose business to those guys".  I gave him all the codes for what I wanted, and he told me the three closest they had on the lot.  I picked the one that suited me best, and he asked what I thought about $31k.  I told him I thought I'd be driving to Kellogg. 

He then asked me if I would finance through them, and come down today if we could agree on price; I told him yes.  He said "$25,995".  I said I'll be down, was there 15 minutes later and drove the truck away 2 hours later.  He could have gone as high as $28.2, since it was worth $600 to me to not drive to Kellogg.  I financed through them (with GMAC ironically) at 6.99%, and then refinanced it for the same loan term through my credit union later at 2.99%. 

I had to go with an aftermarket Blue tooth, and settle for Stone White instead of Brilliant Blue.  I am sure my sale was putting them into another tier, I don't think they made any money on the unit they sold me but it was worth it to move another unit.  That was just under 69% of MSRP.

I've bought 3 other new vehicles previous, just doing the phone and internet thing; all three of those were 15-16% below MSRP, so we think that is around what they need to get normally w/o considering sales volume.  By shopping the end of the month, and being willing to take a few months to buy a new truck, we doubled the savings.   

[magnanimous_j]

Some good info in this thread, and some really wonky info. I sold cars for 5 years, here is some of what I picked up.

Also, we never ran credit without the customer’s written consent. I can’t imagine that it’s even legal, but until we got their SSN, we couldn’t do it anyway. A driver’s license is not enough. We took copies of the license for test drives so if someone piles the car and runs off (which happens), we can track them down.

Disagree with the above statement- Credit checks can be performed with just a driver's license.

http://www.consumerreports.org/cro/news/2009/09/car-dealers-can-use-your-drivers-license-to-access-your-credit-report/index.htm

Huh. Learn something new every day. Well, we never ran anyone's credit without permission.

The other little thing I forgot to say, is check for yourself what the factory incentives are. They change all the time and sometimes the factory would forget to tell us. Seriously.

[jackmaster]

i didnt read all the post but the best way to haggle is to have cash in hand, you can save thousands with cash in hand, money talks BIGTIME

[fish vacuum]

i didnt read all the post but the best way to haggle is to have cash in hand, you can save thousands with cash in hand, money talks BIGTIME

Not any more. As pointed out a couple times already, they benefit from you financing.
One time when I was truck shopping I thought I was at an advantage because I was paying cash. At the start of negotiating with a salesman I mentioned that I was serious about buying and would make their job easy by writing a check. He said, "Or we can do 10 minutes of paperwork and get money from a bank. Doesn't matter to us."

If buying private party then cash DOES help. Craigslist ads get replies from tons of flakes wanting to know if they can make payments, or if the seller will hold the vehicle until payday, or if the seller will take trades. The last time I sold a vehicle on craigslist, I got a ton of responses from flakes. I sold that truck to the first person that sounded serious.

[Rick]

i didnt read all the post but the best way to haggle is to have cash in hand, you can save thousands with cash in hand, money talks BIGTIME

Not any more. As pointed out a couple times already, they benefit from you financing.

Not to mention,a lot of times rebates and incentives are tied to financing a vehicle.

[vandeman17]

For me, the best route I have had is to do my research on the vehicle I am interested in and figure out the no bs price that I am willing to pay. I have gone in and said, I like that car, I want to drive it and if I still like it, I will buy it for this price. They can haggle all they want but if they don't come down to my price then I walk. I did that with my last Tahoe and actually ended up getting away with the dealership fixing some small dings and do a good detail inside and out on top of their normal clean job.

[jackelope]

The other top secret priviledged info tidbit if you want the best price you can get on a truck....

Go to Dave Smith. They are the enemy but man, they do sell for good prices.

[stevemiller]

Here is some info I've got over the years dealing with dealerships.Used cars,They typically are bought at auction,some are trade ins but most are from auctions.The down payment generally is $200 over what they bought the car for at auction or the trade in value.When I go to check out a rig I find out what the down is right off the bat,They really dont want anything sitting on the lot long it makes it look like they dont get much business that's why they rotate them around all the time.If you find out the down and make an offer a little over the down by nit picking it apart you can save a ton of money,If they say no tell them to get ahold of you if they decide to make a deal.This will work the majority of the time.  Especially here in Yakima.

[huntandjeep]

OK so after researching more the dealership has the truck listed at $44000 , KBB value is $35500 , NADA value is $40000 these are both good condition trade in value ( assume dealerships use good and not excellent condition) . Same year trucks with less options and more miles are anywhere from $43000-$46500. Would $38000 be a good offer , should I start lower? I would pay a max $40000.      Allen

[stevemiller]

I would start at 30k to let him understand that you know whats up.You dont care about the salesmans commission do you?

[grousetracker]

just go there look and drive the vehicle and tell them what you'll pay and be prepared to leave without the truck. i have never had a salesman let me leave always a counter offer so lowball them first. have your cash or financing all ready.

[BigD]

OK so after researching more the dealership has the truck listed at $44000 , KBB value is $35500 , NADA value is $40000 these are both good condition trade in value ( assume dealerships use good and not excellent condition) . Same year trucks with less options and more miles are anywhere from $43000-$46500. Would $38000 be a good offer , should I start lower? I would pay a max $40000.      Allen

I think I would start around 35,000. With that said I never feel I have to drive that vehicle home.