Negotiating techniques - new car dealerships (1 Viewer)

[John Beavers]

I've been making the rounds at the car dealerships looking for my next car. I've pretty much decided that I'm going to get the 2002 Nissan Altima 3.5SE. Now for the fun part, negotiating price.

I had a preliminary talk with a salesman at one dealership who stated that they'd been known to make deals at $500 over dealer invoice. However, I didn't get a written quote and this particular salesman is leaving that dealership next week. I won't be ready to make the deal for two weeks. At the dealership close to where I live I've gotten an email preliminary quote of around $24K. $500 over dealer invoice would be $21,600. My plan is to go to the one dealership that quoted $24K and mention that the other dealership is willing to go $500 over invoice. I don't know if dealerships talk to one another, and whether he'd want to see a written quote before going that low. I would appreciate any tips from you new car buyers on how you got the best price on your car.

 

[DustinDavis]

I think one of the best things to do is, don't rely on the quotes you get to the price you want. Decide what you are willing to spend on this car, then shoot for it. If a dealer can't come close, the greatest power you have is the power to walk away from the deal. If none of them come close, then perhaps you need to adjust your expectations and make another go at it.

 

[ikiru]

For no hassle buying, I recommend www.autobytel.com
The deal is usually this... $500 over invoice, no questions, no negotiating, no headache.
Just fill out your info, and an autobytel dealer in your area will contact you. Do some research and take the invoice pricing with you.
If you are resourceful, you will find out how to get a car at invoice by figuring out which "optional" items are shipped standard, especially with Nissan. Here is what my wife and I found out when we bought a 2002 Pathfinder... The Pathfinder comes with a package called "the popular package". It comes with on-wheel stereo controlls, in cabin micro-air filter, a cargo net, and *gasp* Bose speakers. For the price of the package, my wife and I really couldn't justify any of those options, so we told the salesman we did not want the package. However, we found out that Nissan does not ship the Pathfinder without that package (which makes us wonder why its an option). The sales person said that it is an option so that they can advertise it for a lower price (sounds like bait and switch to me). Anyway, we were determined to get the car, either without the package, or with it thrown in for free. Understand this, the dealer would be absolutely insane to let a $500 package (invoice) get in the way of a $26,000 car, just remember that when they refuse to sell you the car without the package. After a bit of drama (in which we were prepared to walk out), he threw in the $500 package for free.
So, we ended up getting the car for basically invoice.
If you are in for a bit of haggling, you can go into a dealership and tell the salesman that you wish to buy the car now and you want to pay invoice. This may sound like grounds for the dealer laughing in your face, but you should know that they are getting a 2-3% dealer holdback for selling a car within 6 months of delivery (based on the make...see www.edmunds.com for details). 2-3% on a $25,000 vehicle is $500-$750. Pretty good profit considering the salesman didnt have to lift a finger to get the sale. Plus if you have to finance it, they get even more money. It doesn't seem so funny now.
If they refuse to sell you the car at invoice, just walk out and tell them that you are going to try the other dealership (which these days are just down the road).
Good luck!
-ikiru

 

[BrianB]

just walk out

That's the most important thing to remember when buying a car: You have the power to walk out. Don't be afraid to use it!

 

[Thomas Reagan]

One other trick for more leverage:

Go there as close to the end of the month as possible. Dealerships have to pay lease charges to the manufacturers on any cars still on the lot on the first of each month. It is in their best interest to move the vehicles before then...even at invoice.

We bought a Honda Accord EX at invoice last year with this strategy.

Thos.

 

[Jay Heyl]

For a general guide to negotiation tactics, I recommend "You Can Negotiate Anything" by Herb Cohen. I read this book after negotiating my first new car deal and found the exact tactics used by the dealer described in this book. I really wished I had read the book before making the deal.

 

[Justin Doring]

$200 above invoice is not uncommon with Nissan, as they're begging for people to buy their cars (which I find odd, as they make far better automobiles than Toyota or Honda). There is also a plethora of dealers, so don't be afraid to go to different ones. Be polite, but be firm, and don't be afraid to walk away.

 

[Bill Balcziak]

The deal is usually this... $500 over invoice...

That sounds like a good deal for the dealer, not for the customer. If you're paying invoice or higher on anything other than a truly in-demand car, then you likely could have done a lot better with a little work.

Read Don't Get Taken Every Time by Remar Sutton. It is the best book of its kind, bar none. It can be an uncomfortable read--especially when you see how salespeople view you--but it lets you see the inner workings of a dealership pretty well and it will once and for all eliminate any belief that the salesperson is your friend. That fallacy costs people a LOT of money!

 

[brian a]

When I bought my last two cars, I have printed out the dealer cost sheets from edumnds or elsewhere and taken them with me. I then have the salesman print out his copy of his invoice on the car, and we compare them. Puts you in pretty good shape when you can agree on how much the car cost them. Also, be sure to know all of the rebates that are offered to the dealer so you can subtract that from the cost.

 

[Mike Huay]

When you find the car you want and have done your homework on its costs, tell them what you want to pay.

($200 over is reasonable on most Japanese and American cars - the dealership is not starving, they are making more money on the sale in other ways)

When they decline your offer, you have two quick ways to expidite the process.

One is talk to the sales manager directly. Dont waste your time with endless back and forth with the salesman saying "Im tryin to get them down." Just talk to the guy who can tell it straight.

If that does not work head for the door. On the way out, the price should fall. They do not want to let you leave if they are any good.

If that fails, next dealer.

 

[John Beavers]

Things are progressing smoothly so far. I got my local Nissan dealer to agree to the trade in value I wanted and $500 over invoice. And the Berkeley Dealer (contacted via autobytel) is now aware that I would like him to better that deal if he wants me as a customer. My actual goal is invoice price and $500 more on my trade in. I've got two more dealerships in the area to hit to try for this goal. I was told by the local dealer that if it were a Maxima I was after they'd make me a really sweet offer...they're trying to unload them as fast as possible due to next years model upgrade. However on the Altima, since it's already won one car of the year award and is getting such great reviews in the auto press, they're not being as flexible. Well, we'll see, one good thing about doing this with a few weeks to spare before the purchasing funds are available, is you are free to negotiate without being tempted by an offer that is less that what you really want. Trouble is though, they are having a hard time finding the options package and interior color I want. A direct order from the factory could take months he said, so if an options/interior match does become available from the current area stock, well, you snooze you lose, or so the dealer will say...errrr

 

[Kirk Gunn]

And remember, if they do let you walk out... The deal is not gone. You may get a call the next day saying "we may be able to work with your figures".

Happened to me 2x.

brian a - how close are Edmunds figures ? Always wondered if they were accurate.

Thanks

 

[Philip Hamm]

There is a a fantastic essay about how to buy a car at www.edmunds.com. I used the techniques described there to get my Audi A4 in 2000 and I paid 3.9% over invoice for it, which is a good price for a hot car (and Audi was offering no dealer holdbacks or incentives on this car when I bought).
You're going to pay a premium on a brand new 2002 Altima. They are a brand new design and extremely popular, market demands are a large part of the negotiating process. If you don't buy it at a premium price the dealership knows full well that the next guy coming in will. If you want a good deal on a new car avoid "hot" cars.
If you really want the Altima be prepared to pay dearly for it or buy it in about 8 months. Personally I'd buy a Maxima instead.
Also, rent the movie "Suckers" for a really insightful look into the car dealership game.

 

[Scott Merryfield]

John,

Please post here how everything turns out. We are looking at both the Altima 3.5SE and a Maxima, too, and will be doing our shopping in another week or so, once my wife gets back in town. Fortunately, she knows the owner of a local dealership, so we are hoping that will make the negotiating process a little easier. If not, I will be hanging onto my '93 Camry V6 XLE for another year.

 

[Greg D]

As others have said, know in advance how much you are willing to spend on the car. You certainly don't want to pay any more than dealer invoice (which really isn't their cost in the first place). Bring a cell phone with you, and a good book. Be prepaired to spend a long day negotiating.
After haggling at one dealer, getting to their best offer, let them know you're headed up the road to another dealer. Also hand him your cell phone number and tell him to give you a call if he can come up with a better deal. Then head to the other dealer's showroom.
Chances are you'll hear from the first salesman before you've exhausted the other salesman's patience. The second guy won't like it, but you can step out of his show room and haggle with the first guy by phone. My brother actually did this, using the desktop phone of the second dealer (the first saleman called him there).
Remember, the salesman is going to try to wear you down. You just need to do the same to him, it just takes a lot of time.
And by far the best time to buy a car is bewteen Christmas and New Year's. But I don't suppose you want to wait that long.
Oh yeah, I own a Maxima and love it. I think it's the best car in it's class. It's cheaper than an equivalent Honda or Toyota, and it blows both of them away in terms of performance. As far as I know, that's true for the Altima as well.

 

[Bill Balcziak]

And by far the best time to buy a car is bewteen Christmas and New Year's.

That's conventional wisdom, but it's based on outdated thinking about dealership sales cycles. There is no "best time" to buy a car anymore since the dealership's books and sales goals are reviewed on a daily basis, not a monthly or yearly basis. The dealer will sell you a car for $500 under invoice on January 1 as quickly as he will on December 31 if you know how to negotiate a car deal.

Simply walking into a dealership on the last day of the month or the last day of the year might have made a difference 20 or 30 years ago, but not anymore. Spend your time learning how to defeat system selling and you've got it made.

 

[Bill Balcziak]

Also, rent the movie "Suckers" for a really insightful look into the car dealership game.

Or make friends with a dealer or salesperson and let them tell you some stories about how things really work. It's an amazing business, and not one for the weak of heart.

 

[Patrick Sun]

Am I the only one that finds this "wearing down the dealer" bit: one of the singularly most distasteful buying activities one can get involved in? I last bought a car in 1996, and I hated the haggling, but I did employ the walk out the door trick after a half hour of dickering and they finally got within $200 of my price, so I went ahead and did the deal, but the whole process made me want to take long hot shower afterwards because it felt like I was playing with the swine all afternoon long.

 

[Kelley_B]

I talked to the local Mits dealer last night about getting a Lancer Evolution VII and he told me that they are going to mark them up $7-10,000 over MSRP! So that makes them about $40,000 for a $28-30,000 car! They claim they are only getting six this year, yeah right! I am now really thinking its WRX time.

 

[Ken_McAlinden]

I am an automotive engineer, so get pre-determined employee discount prices and thankfully don't have to negotiate anything. One tip if you lease is to do so as close to the beginning of the model year as possible and get the newest model available due to the "residual value game". If you plan to buy, deals are usually found towards the end of a model year to make room for the next model year's stuff. These vehicles will often carry inventory-clearing manufacturer incentives as well.

Regards,