How go haggle for a new car

[Rainger99]

This is an interesting video of a person negotiating for a new car! It came out 10 days ago and has over 1 million views.

https://youtu.be/BbAKMD8o3iA?si=BMk9ZOZLc8VCPhx_

[BrianL99]

This is an interesting video of a person negotiating for a new car! It came out 10 days ago and has over 1 million views.

https://youtu.be/BbAKMD8o3iA?si=BMk9ZOZLc8VCPhx_

What's the point?

That automobile prices are negotiable, just like homes, repairs and most any big ticket items?

[retiredguy123]

I don't haggle for a new car. Research the value, give them an out-the-door, take it or leave it price offer, and 15 minutes to accept it. If they don't, I give them my phone number and leave. If they try to increase my offer by even a dollar, I leave immediately. I have bought a lot of cars that way.

[tophcfa]

I don't haggle for a new car. Research the value, give them an out-the-door, take it or leave it price offer, and 15 minutes to accept it. If they don't, I give them my phone number and leave. If they try to increase my offer by even a dollar, I leave immediately. I have bought a lot of cars that way.

Totally agree. And the first thing I tell them is that if they even mention cost per month or financing, I’ll walk away as fast as possible. It’s all about the out the door price.

[fdpaq0580]

Totally agree. And the first thing I tell them is that if they even mention cost per month or financing, I’ll walk away as fast as possible. It’s all about the out the door price.

Agree!

[kkingston57]

I don't haggle for a new car. Research the value, give them an out-the-door, take it or leave it price offer, and 15 minutes to accept it. If they don't, I give them my phone number and leave. If they try to increase my offer by even a dollar, I leave immediately. I have bought a lot of cars that way.

Above sounds like strong buyer haggling. Hope your method worked several years ago when car demand was high

[BrianL99]

Above sounds like strong buyer haggling. Hope your method worked several years ago when car demand was high

I love these threads about buying new cars and all the "perfect strategies" that show up.

There were about 16,000,000 new vehicles sold in the USA last year. Almost all sold at retail to consumers, by automobile dealers & salesmen.

These guys are professionals. Any customer who thinks they're smarter or more savvy than the guys who do it for a living, are smokin' really good stuff.

Anyone who been in the automotive sales world for more than a couple of months, has seen it all and can't wait to deal with the "know it all customers" ... they're the easiest in the world to take advantage of.

[Mleeja]

The are several videos on You Tube about car buying. I agree that the most important item is the out-the-door price. It “pays” to do research beforehand and be an informed buyer when walking in a dealership. That is your best buying tactic.

[frayedends]

I watched the video and this is not how to haggle and not how to buy. First off, don't take financial advice from someone that needs to take a 7 year loan and also put a bunch on a credit card.

Second, the invoice he shows does not show MSRP. It shows "Market Value Selling Price". That would presumably already include the market value adjustment. They are trying to tack on $1995 more than that. Plus over $900 in bogus fees.

Tax on this vehicle seems to be about 4.4%. Even if he pays full market price and tax, without a bunch of bogus fees, he's only at like $26,250. He paid them $26,800. Dealer wins.

So, always always always walk out the door. When they stop you from walking there is still room. When they let you go to your car and drive away, you know you hit the lowest price. Call them back and confirm that last price and then go back and make the deal.

[Shipping up to Boston]

I love these threads about buying new cars and all the "perfect strategies" that show up.

There were about 16,000,000 new vehicles sold in the USA last year. Almost all sold at retail to consumers, by automobile dealers & salesmen.

These guys are professionals. Any customer who thinks they're smarter or more savvy than the guys who do it for a living, are smokin' really good stuff.

Anyone who been in the automotive sales world for more than a couple of months, has seen it all and can't wait to deal with the "know it all customers" ... they're the easiest in the world to take advantage of.

Very true..
During and post pandemic, the MSRP was exceeded regularly. Why? Because they can. Supply and demand. Where I’m from, car dealers are flourishing and upgrading and expanding their properties. Much like a casino.....you are always playing with house money.

[CarlR33]

Your loosing your azz on a new car either way so buy used and let others take the hit on a new car, IMO.

[BrianL99]

Where I’m from, car dealers are flourishing and upgrading and expanding their properties. .

I'm building one right now in metro Boston. A touch under $30M. Built the existing facility, about 20 years ago and now tearing it down.


.... moving them in on June 24th, which is why I guess I have to think about going back up north soon, unfortunately.

[frayedends]

Your loosing your azz on a new car either way so buy used and let others take the hit on a new car, IMO.

I agree most of the time. It's been a few years but the only time I'd disagree is with a new or used Toyota. Back when I wanted a Tacoma the used, 2 or 3 years old, were only about 1-2 grand less than brand new. I never did get one but I likely would have gone new in that case.

[Shipping up to Boston]

I'm building one right now in metro Boston. A touch under $30M. Built the existing facility, about 20 years ago and now tearing it down.


.... moving them in on June 24th, which is why I guess I have to think about going back up north soon, unfortunately.

Sounds like a ‘Herb’ dealership

[phylt]

it was so easy for us. We bought a Tesla. Tesla has NO "DEALERS". Solely Direct Tesla owned Sales and Service Centers. Closest to TV is Clermont. You order your car online on the Tesla site. Make your selections. Model type. Color exterior and interior. A very few more choices. New or used. Order or inventory. Our order took less than 10 minutes to enter. No haggling, fixed prices (although they can fluctuate from time to time - supply/demand).

If ordered for a new build, Tesla keeps you updated re status on line. Tesla cars are built in the USA. Fremont CA or Texas. USA! The car is delivered to Clermont for pickup. Or if it is stock, just go to pick up. This is all confirmed via the Sales folks at the Center.

NO haggling, no commission, no stress.

NO dealers. NO markup. No worry.

The 'dealer model' is SO 1990's.

And oh BTW, the car is simply FANTASTIC!

[UpNorth]

Tried this years ago on a new car purchase: Wrote down exactly what I wanted on a sheet of paper and made several copies. Went to competing car dealers and had them write their best and final quote on the paper and put it in a envelope. Did not open the envelope or discuss the price while at the dealer, letting them know that I would be doing the same at their competition. When I got all the quotes together, I opened them and went with the low bidder. There was a least a thousand dollar difference between the lowest and highest quote. "Sales skills" never came into play. They had one shot to make the deal.

[retiredguy123]

Tried this years ago on a new car purchase: Wrote down exactly what I wanted on a sheet of paper and made several copies. Went to competing car dealers and had them write their best and final quote on the paper and put it in a envelope. Did not open the envelope or discuss the price while at the dealer, letting them know that I would be doing the same at their competition. When I got all the quotes together, I opened them and went with the low bidder. There was a least a thousand dollar difference between the lowest and highest quote. "Sales skills" never came into play. They had one shot to make the deal.
With all due respect, in my opinion, asking a dealer to write down their best price will never get you their lowest price. They will not compete with other dealers in that way. You need to make the dealer a firm, take it or leave it offer, and convince them that you are leaving forever if they don't accept it. A thousand dollar difference in prices is not enough. Most vehicles can be purchased for $2,000 to $4,000 less than what an uninformed buyer will usually pay.

[OrangeBlossomBaby]

If I'm in the market for a car, it's because - I need a car. They have what I need, they have the House advantage. They don't need MY money - another customer will come along and buy the car, and they don't have to go anywhere to get the customer. If I try playing games too hard with a dealer, they'll just say no, and then I have to waste time and energy and try my patience going to another dealership, and start the process all over again, at my expense.

I'll -probably- end up getting my replacement car in Ocala, because dealerships near The Villages have pretty much a monopoly and can "fee" you to death and there's nothing you can do about it. Except to drive far away to a dealership that doesn't have a monopoly.

[retiredguy123]

If I'm in the market for a car, it's because - I need a car. They have what I need, they have the House advantage. They don't need MY money - another customer will come along and buy the car, and they don't have to go anywhere to get the customer. If I try playing games too hard with a dealer, they'll just say no, and then I have to waste time and energy and try my patience going to another dealership, and start the process all over again, at my expense.

I'll -probably- end up getting my replacement car in Ocala, because dealerships near The Villages have pretty much a monopoly and can "fee" you to death and there's nothing you can do about it. Except to drive far away to a dealership that doesn't have a monopoly.
True. If you need a car, you probably won't get a good deal. It's best to buy a car before you actually need a car, unless you can convince the dealer that you don't need a car. It's easy to deal with the fees, just say no. That is why I set the price, not the dealer. They can take it or leave it. When you do it that way, there are no bogus fees because you don't even discuss them. But, I don't agree that another customer will buy the car. The dealer can always replace the car to sell to another customer.

[frayedends]

True. If you need a car, you probably won't get a good deal. It's best to buy a car before you actually need a car, unless you can convince the dealer that you don't need a car. It's easy to deal with the fees, just say no. That is why I set the price, not the dealer. They can take it or leave it. When you do it that way, there are no bogus fees because you don't even discuss them. But, I don't agree that another customer will buy the car. The dealer can always replace the car to sell to another customer.

I agree with this. The salesman knows that making the deal with someone already in the store is much easier than making a deal with an, as yet, non-existent customer.

Years ago, when internet was fairly new, some dealers started adding online sales reps. These guys sold by volume, not commission. You could go online, get the best price very quickly and be done with it. This model didn't last long. I helped my mom buy a car this way. I was expecting that to be the end of the dealership model. Unfortunately, the next time I went to buy a car, the internet sales model was gone. I did make a deal online, but when I got the the stealership they still tried to pull a bunch of crap and take away discounts I had been offered online.

[BrianL99]

What fascinates me the most about these ridiculous threads about the "techniques" used by TV's all knowing experts on how to buy an automobile, seems to fly right out the window, when it comes to discussing how to buy a golf cart.

Everyone seems so quick to defend the on-campus golf cart sellers, because they're convenient and will provide "after the sale support" and then go on to justify the $4000-$5000 premium you have to pay for that convenience.

Folks will spend weeks, trying to find a way to save $500 when they buy a $50,000 automobile (1%), but they're perfectly willing to "do business locally" and pay $22,000 for a $17,000 golf cart, because of the "convenience factor" of buying on campus.

The next time one you experts needs service on your golf cart or need to buy a new cart, try your "system" at Village Golf Carts and see how it works out for you.

Everyone seems to understand the supply & demand dynamic and the realities of "services" when it comes to golf carts, but common sense flies right out the window when talking about automobiles.

[retiredguy123]

I agree with this. The salesman knows that making the deal with someone already in the store is much easier than making a deal with an, as yet, non-existent customer.

Years ago, when internet was fairly new, some dealers started adding online sales reps. These guys sold by volume, not commission. You could go online, get the best price very quickly and be done with it. This model didn't last long. I helped my mom buy a car this way. I was expecting that to be the end of the dealership model. Unfortunately, the next time I went to buy a car, the internet sales model was gone. I did make a deal online, but when I got the the stealership they still tried to pull a bunch of crap and take away discounts I had been offered online.
I don't know about years ago, but, most dealers have an internet sales department. But, it is mostly a scam. The first thing they want is your phone number so they can call you and ask you to come in to test drive a car. Most of them won't give you an "out-the-door" price over the internet. So, you really cannot close the deal. It is mostly a way to get potential buyers to visit the dealership.

[retiredguy123]

What fascinates me the most about these ridiculous threads about the "techniques" used by TV's all knowing experts on how to buy an automobile, seems to fly right out the window, when it comes to discussing how to buy a golf cart.

Everyone seems so quick to defend the on-campus golf cart sellers, because they're convenient and will provide "after the sale support" and then go on to justify the $4000-$5000 premium you have to pay for that convenience.

Folks will spend weeks, trying to find a way to save $500 when they buy a $50,000 automobile (1%), but they're perfectly willing to "do business locally" and pay $22,000 for a $17,000 golf cart, because of the "convenience factor" of buying on campus.

The next time one you experts needs service on your golf cart or need to buy a new cart, try your "system" at Village Golf Carts and see how it works out for you.

Everyone seems to understand the supply & demand dynamic and the realities of "services" when it comes to golf carts, but common sense flies right out the window when talking about automobiles.
I don't know much about buying a golf cart, but when buying an automobile, an uninformed buyer will typically pay about $3,000 to $4,000 more than an informed buyer. I highly recommend researching the vehicle's fair value on KBB.com and Edmunds.com before visiting a dealership. And, be aware of bogus dealer fees and add-ons that all dealers try to con you into paying for.

[Shipping up to Boston]

What fascinates me the most about these ridiculous threads about the "techniques" used by TV's all knowing experts on how to buy an automobile, seems to fly right out the window, when it comes to discussing how to buy a golf cart.

Everyone seems so quick to defend the on-campus golf cart sellers, because they're convenient and will provide "after the sale support" and then go on to justify the $4000-$5000 premium you have to pay for that convenience.

Folks will spend weeks, trying to find a way to save $500 when they buy a $50,000 automobile (1%), but they're perfectly willing to "do business locally" and pay $22,000 for a $17,000 golf cart, because of the "convenience factor" of buying on campus.

The next time one you experts needs service on your golf cart or need to buy a new cart, try your "system" at Village Golf Carts and see how it works out for you.

Everyone seems to understand the supply & demand dynamic and the realities of "services" when it comes to golf carts, but common sense flies right out the window when talking about automobiles.

My guess is those same people you referenced will be the same people attending the Travel Show at Brownwood!

[OrangeBlossomBaby]

True. If you need a car, you probably won't get a good deal. It's best to buy a car before you actually need a car, unless you can convince the dealer that you don't need a car. It's easy to deal with the fees, just say no. That is why I set the price, not the dealer. They can take it or leave it. When you do it that way, there are no bogus fees because you don't even discuss them. But, I don't agree that another customer will buy the car. The dealer can always replace the car to sell to another customer.

If I could afford to get a car before I needed one, I wouldn't waste a moment haggling. I'd pick out the car, tell them "wrap it up, here's the check" and drive on out with it. Time is money. The more time I take in the process of acquiring what I want, the more money I've already spent before ever acquiring it.

I tell them what I'm looking for. I tell them what I have available to spend. They can match me up with a car I want in the budget I set, or they can say they don't have such a thing on their lot. That way no one is wasting anyone's time.

[Shipping up to Boston]

True. If you need a car, you probably won't get a good deal. It's best to buy a car before you actually need a car, unless you can convince the dealer that you don't need a car. It's easy to deal with the fees, just say no. That is why I set the price, not the dealer. They can take it or leave it. When you do it that way, there are no bogus fees because you don't even discuss them. But, I don't agree that another customer will buy the car. The dealer can always replace the car to sell to another customer.

Classic example of one playing chess and the other playing checkers. I can guarantee that any dealer or salesperson that is reading this ......is reacting to it the same way they react to a Sebastian Maniscalco comedy special on Netflix. Please post a YouTube video next time you go to a dealer and.....A. ‘Convince the dealer you’re there...but don’t really need a car’ B. Tell them , ‘that’s the price...take it or leave it’. I guarantee the responses will go viral! Smh

[Ecuadog]

I don't know about years ago, but, most dealers have an internet sales department. But, it is mostly a scam. The first thing they want is your phone number so they can call you and ask you to come in to test drive a car. Most of them won't give you an "out-the-door" price over the internet. So, you really cannot close the deal. It is mostly a way to get potential buyers to visit the dealership.

FWIW, three years ago, I had what I consider a good experience that started with contacting dealers over the internet. In today's world, I don't know what would happen, but I'd try it again. I posted about it here... Talk of The Villages post... click here (https://www.talkofthevillages.com/forums/1942303-post37.html).

P.S. I'm still driving my 2010 Scion.

[BrianL99]

Sounds like a ‘Herb’ dealership

No, Herb is about 25th in the USA. We're Top 100, but not in Herb's world.

[Shipping up to Boston]

No, Herb is about 25th in the USA. We're Top 100, but not in Herb's world.

You’re client is clearly proof that patterns described here of....potential clients walking out or telling their sales team to ‘take it or leave it’....wouldn’t be on the path to 30M upgrades. The days of ‘what’s it gonna take to put you behind the wheel of this car today’ sales people are memorialized in Robin Williams movies

[Michael G.]

So I also watched the complete video and they talked about his car he's presently driving but nothing about trade.:shrug:

He didn't say, but maybe he'll sell it himself.

Another thing to remember.
The price you want to spend for the car you want, you better be dam sure that price is possibly for any dealer to meet.
To do that takes a lot of research on your part.

[BobnBev]

Sounds like a ‘Herb’ dealership

Definately "HERB". He has to pay for that helicopter somehow.

[Shipping up to Boston]

Definately "HERB". He has to pay for that helicopter somehow.

Great guy. Deserves it. Grew up a city kid (Dorchester) and came up a salesman to where (as previously mentioned) he’s one of the top dealers in the nation. Philanthropist as well to many charitable organizations. Love people that make it in life and never forget their roots!

[Tvflguy]

it was so easy for us. We bought a Tesla. Tesla has NO "DEALERS". Solely Direct Tesla owned Sales and Service Centers. Closest to TV is Clermont. You order your car online on the Tesla site. Make your selections. Model type. Color exterior and interior. A very few more choices. New or used. Order or inventory. Our order took less than 10 minutes to enter. No haggling, fixed prices (although they can fluctuate from time to time - supply/demand).

If ordered for a new build, Tesla keeps you updated re status on line. Tesla cars are built in the USA. Fremont CA or Texas. USA! The car is delivered to Clermont for pickup. Or if it is stock, just go to pick up. This is all confirmed via the Sales folks at the Center.

NO haggling, no commission, no stress.

NO dealers. NO markup. No worry.

The 'dealer model' is SO 1990's.

And oh BTW, the car is simply FANTASTIC!

Totally agree with this. Tesla’s model is so simple and so effective. The old “Dealer” model is entrenched with the “old” standards. And those manufacturers which are not moving, or moving too slowly with EV technology are on the path to extinction. It’s already happening in China.
I will Never deal with car dealers again after experiencing Tesla. I always felt “slimy” leaving a car dealership.

[BrianL99]

Totally agree with this. Tesla’s model is so simple and so effective. The old “Dealer” model is entrenched with the “old” standards. And those manufacturers which are not moving, or moving too slowly with EV technology are on the path to extinction. It’s already happening in China.
I will Never deal with car dealers again after experiencing Tesla. I always felt “slimy” leaving a car dealership.

At the rate Tesla is going this year, they might just turn into an orphan brand.

Profits down 55%. Price cuts every 90 days. Inventory going no where. Government subsidies made Tesla and when that changes and Tesla is on their own, it will be reckoning time.

As for manufacturers who are "not moving fast enough to EV technology"? The CEO of Toyota (a company that know a little about automobiles) recently said Toyota won't buy into the EV world and will continue to focus on Hybrids.

[Shipping up to Boston]

At the rate Tesla is going this year, they might just turn into an orphan brand.

Profits down 55%. Price cuts every 90. Inventory going no where. Government subsidies made Tesla and when that changes and Tesla is on their own, it will be reckoning time.

As for manufacturers who are "not moving fast enough to EV technology"? The CEO of Toyota (a company that know a little about automobiles) recently said Toyota won't buy into the EV world and will continue to focus on Hybrids.

This reminds me of the Polaroid Corp. When everybody else was in R&D....and production on digital cameras, Polaroid dug in on their instant camera model. By the time they figured it out....they were cooked. As were all their employees

[BrianL99]

This reminds me of the Polaroid Corp. When everybody else was in R&D....and production on digital cameras, Polaroid dug in on their instant camera model. By the time they figured it out....they were cooked. As were all their employees

Ken Olson the founder of Digital Equipment, said that "personal computers" were never going to catch on. Back in the 80's in my area of the world, 60% of the people I'd run into on a daily basis, worked for DEC.

Tesla biggest problem, is they still don't employ "car people". They think that what they produce are "transportation devices", not cars Their designs and their quality of fit & finish, is atrocious and the laughing stock of the automotive world. Elon Musk may be a genius, but taking on GM, Toyota, BMW & M-B is no easy task ... which perhaps is why their stock is down 40% this year.

[Shipping up to Boston]

Ken Olson the founder of Digital Equipment, said that "personal computers" were never going to catch on. Back in the 80's in my area of the world, 60% of the people I'd run into on a daily basis, worked for DEC.

Tesla biggest problem, is they still don't employ "car people". They think that what they produce are "transportation devices", not cars Their designs and their quality of fit & finish, is atrocious and the laughing stock of the automotive world. Elon Musk may be a genius, but taking on GM, Toyota, BMW & M-B is no easy task ... which perhaps is why their stock is down 40% this year.

The rest of the remaining 40% were at Wang and Data General! ;)

Agree on Tesla and Musk. This is a hobby for him. He’s on a different level. I’m sure he’s thrilled that BYD is operating on the periphery and no (immediate) threat to him in the US at least

[Rainger99]

Agree on Tesla and Musk. This is a hobby for him. He’s on a different level. I’m sure he’s thrilled that BYD is operating on the periphery and no (immediate) threat to him in the US at least

I am not a big fan of electric vehicles (too expensive and charging is a problem) but BYD cars cost $11,000 to $15,000. If I could get the $7500 tax credit, I would probably buy one.

BYD's new lower-cost EV platform will crush gas-powered car sales (https://electrek.co/2024/03/11/byds-new-lower-cost-ev-platform-crush-gas-powered-car-sales/)

[BrianL99]

The rest of the remaining 40% were at Wang and Data General! ;)


If we ever play golf, I'll tell you the story about how I talked my brother out of doing this deal. $80-Million Wang Complex Sells for $525,000 - Los Angeles Times (https://www.latimes.com/archives/la-xpm-1994-02-17-fi-24177-story.html)

7 years ago, the building was sold for $227M.

[DaytonD]

What's the point?

That automobile prices are negotiable, just like homes, repairs and most any big ticket items?

Always and only buy a car on the last sales day of the month. They will make deals that day , that won't make any other day, in order to meet sales quotas!

[Shipping up to Boston]

If we ever play golf, I'll tell you the story about how I talked my brother out of doing this deal. $80-Million Wang Complex Sells for $525,000 - Los Angeles Times (https://www.latimes.com/archives/la-xpm-1994-02-17-fi-24177-story.html)

7 years ago, the building was sold for $227M.

I remember this vividly. For the buyer, one of the greatest real estate transactions in history. Definitely in Lowell history. Every time I drive by it on Route 3...I shake my head

[BrianL99]

Always and only buy a car on the last sales day of the month. They will make deals that day , that won't make any other day, in order to meet sales quotas!

There are (3) situations you're likely to get a good deal, if you're smart about it.

1. The last day of the month (as your said).

2. The last week of the year (between Christmas & New Year's Day).

3. The last week of a Manufacturers Incentive Program (this one is HUGE, but hard to identify, as the information isn't usually public).

[BrianL99]

I remember this vividly. For the buyer, one of the greatest real estate transactions in history. Definitely in Lowell history. Every time I drive by it on Route 3...I shake my head


We were on our way to the Auction, with a Cashier's Check. The snow was blinding. Brian Kelly & Dan Doherty out smarted me, that's for sure..

[BrianL99]

Trending on X today:

[rsmurano]

I bought a new car last summer. I went to 1 dealer to find exactly what I wanted. I then sent out around 25 emails/website inquiries to dealers describing the car, trim level, with the exact items/options I needed on the car, asking for their best out the door price, all while using an email alias. All while sitting at home. All the dealers gave me an out the door price, and some came back with a price and would say something like we won’t lose a deal on price. So I had a few dealers bidding against themselves. After a couple of weeks, I took the lowest offer and drove down to Tampa to look at the car and test drive it, then purchased it. After buying the car, I deleted my email alias so none of the dealers could send me offers or future emails. This was for a brand new car that I was familiar with and knew exactly what model trim, colors, etc that I wanted.
Next year when I want a new car, I would do the same thing

[mrf0151]

Best way to purchase a new vehicle is to know what you are going to pay for a particular vehicle is to have your deal done before you ever walk into the dealership.
Over the years I have only dealt with the dealership's internet manager. You will have to do your homework before you call. Know what exact vehicle you want and know the dealerships price breakdown on that vehicle. Make your deal over the phone and with a set appointment. All you are doing when you walk into the dealership is signing and driving away.

[CosmicTrucker]

This is an interesting video of a person negotiating for a new car! It came out 10 days ago and has over 1 million views.

https://youtu.be/BbAKMD8o3iA?si=BMk9ZOZLc8VCPhx_

This video popped up in my feed a few days ago. I wasn't impressed with his tactic and it was clear he really wasn't in a position to buy this car due to having to put a portion of the cost on a credit card.

[retiredguy123]

To price a new vehicle, start with the MSRP from the window sticker and subtract any recommended discounts from Edmunds.com and KBB.com and any current rebates. Then, add the sales tax, which is 6 percent plus a $50 county fee. Add the title and tag transfer fee, which is about $130 (more if you need a new tag). If you can get that price, you will have a good deal.

Dealer installed add-ons, doc fee, dealer fee, title and tag processing fees, and other fees are all bogus fees that the dealer will try to apply to increase their profit. It's really not that complicated.

[Wondering]

This is an interesting video of a person negotiating for a new car! It came out 10 days ago and has over 1 million views.

https://youtu.be/BbAKMD8o3iA?si=BMk9ZOZLc8VCPhx_
Useless. First of all you don't pay an adjusted Market add-on or any other add-on that the dealer pushes. Secondly, you do some online research before you go to the dealer - Kelly Bluebook, Edmunds, etc. Then you go to the dealer willing to walk away ,if you don't get your price, or what is a reasonable price based on your research. If you are not willing to walk away - the dealer has you by the "you know what"!

[Rainger99]

If every car dealer sold cars at 5% below MSRP (out the door price - the 5% includes taxes, fees, and any additional costs), could the dealer stay in business?

A friend of mine (who worked as a car salesman) told me that the MSRP is worthless. He said that they could do that because they get the car for substantially below MSRP and that the car dealers get bonuses for meeting sales goals. So even if they sell for below MSRP, they would get additional money from the manufacturer on top of the sales price.

Are there any people on Talk of the Villages that worked in auto sales that can confirm whether this is true?

[retiredguy123]

If every car dealer sold cars at 5% below MSRP (out the door price - the 5% includes taxes, fees, and any additional costs), could the dealer stay in business?

A friend of mine (who worked as a car salesman) told me that the MSRP is worthless. He said that they could do that because they get the car for substantially below MSRP and that the car dealers get bonuses for meeting sales goals. So even if they sell for below MSRP, they would get additional money from the manufacturer on top of the sales price.

Are there any people on Talk of the Villages that worked in auto sales that can confirm whether this is true?
The MSRP is worthless to whom? Federal law requires all car manufacturers to establish an MSRP for every vehicle, but the dealers are not required to sell at that price. I think it is a good law that at least provides a starting point for pricing, and allows customers to see and compare the relative value for all vehicles. When people look at new cars, they always focus on the window sticker.

[BrianL99]

If every car dealer sold cars at 5% below MSRP (out the door price - the 5% includes taxes, fees, and any additional costs), could the dealer stay in business?

A friend of mine (who worked as a car salesman) told me that the MSRP is worthless. He said that they could do that because they get the car for substantially below MSRP and that the car dealers get bonuses for meeting sales goals. So even if they sell for below MSRP, they would get additional money from the manufacturer on top of the sales price.

Are there any people on Talk of the Villages that worked in auto sales that can confirm whether this is true?


I can confirm what you say is partially true.

Here's a brief primer:

There are 2 "sticker" prices (for lack of a better word).

First off, every new vehicle for sale in the USA, must have a Monroney Label (MSRP) affixed to the window. This is required by the Automobile Information Disclosure Act of 1958. (Named after Mike Monroney, who filed the legislation).

The profit margin from Dealer Invoice to MSRP will run about 4% - 13% profit margin. Some less, a few a bit more. There is no standard.

If you were to look at a Dealer Invoice, you would see "adjustments" to the Dealer Invoice Price. They would include things such as "advertising allowance", "floor plan assistance" and "hold back". These are monies which are rebated to the Dealers, under various scenarios and conditions. They could amount to as much as 3% - 4% of the Invoice price.

You might also see "Factory Incentives", which could be any amount of money, depending on the manufacturers need to sell certain vehicles, over a given period of time.

So the answer to your question is, "yes, under some circumstances, Dealers will still make a 'profit' if they sell a vehicle under Factory Invoice". That doesn't mean they make a "net profit", because there's overhead and commissions to consider.

Here's the biggie, the public doesn't understand and is usually not privy to ... but can make a huge difference in what you pay for a new car.

I'll try to explain it, in a (fairly) simple example.

Nissan is having trouble selling their "Leaf" model, so they set up an incentive program for the Dealers and it goes like this:

We (Nissan) will rebate you (the Dealer) $1000 for every Leaf you sell, between May 1 and June 30, provided you sell a minimum of 100 of them.

One June 28th, the Dealership has sold 91 Leafs. Now what? If they don't sell 9 more, than stand to lose the $91,000 they (thought) they'd already earned.

Here's what they do (in simplified terms).

Every salesman gets on the phone and calls every Leaf customer they've had for the last 90 days and offers them the "deal of a lifetime". They offer Leafs at $3000 UNDER Invoice price. (Remember, they have to get to 100 or they lose $91,000.)

They sell the (9) Leafs they need to sell, but "lose" $3000 each.

The math works like this:

(9) vehicles sold for $3000 under cost = $27,000 "loss".

(100) vehicles sold, with a $1000 "incentive" to the dealer = +$100,000.

Net in Dealer Incentives = + $73,000.

This is an over-simplification of the process, but other than a few details, that's the basic premise of how it works.

I also haven't mentioned the "Inventory Allocation System", which is also a critical component, related to how much you have to pay for a specific vehicle.

All the above is why I laugh every time this "how to negotiate for a new car" thread shows up. As ShippingUpToBoston aptly said, the customers are playing checkers and the dealers are playing chess. The average customer has no clue how it all works. Some of us in the business, have trouble figuring all the angles. [Yes, I'm a consultant to a very successful Automotive Group. I mostly do the real estate, but used to be on the other side of curtain.)

Just an added note, to give some perspective on the industry. The EOY profit is likely to be 2% - 3% of total sales volume.

[retiredguy123]

I can confirm what you say is partially true.

Here's a brief primer:

There are 2 "sticker" prices (for lack of a better word).

First off, every new vehicle for sale in the USA, must have a Monroney Label (MSRP) affixed to the window. This is required by the Automobile Information Disclosure Act of 1958. (Named after Mike Monroney, who filed the legislation).

The profit margin from Dealer Invoice to MSRP will run about 4% - 13% profit margin. Some less, a few a bit more. There is no standard.

If you were to look at a Dealer Invoice, you would see "adjustments" to the Dealer Invoice Price. They would include things such as "advertising allowance", "floor plan assistance" and "hold back". These are monies which are rebated to the Dealers, under various scenarios and conditions. They could amount to as much as 3% - 4% of the Invoice price.

You might also see "Factory Incentives", which could be any amount of money, depending on the manufacturers need to sell certain vehicles, over a given period of time.

So the answer to your question is, "yes, under some circumstances, Dealers will still make a 'profit' if they sell a vehicle under Factory Invoice". That doesn't mean they make a "net profit", because there's overhead and commissions to consider.

Here's the biggie, the public doesn't understand and is usually not privy to ... but can make a huge difference in what you pay for a new car.

I'll try to explain it, in a (fairly) simple example.

Nissan is having trouble selling their "Leaf" model, so they set up an incentive program for the Dealers and it goes like this:

We (Nissan) will rebate you (the Dealer) $1000 for every Leaf you sell, between May 1 and June 30, provided you sell a minimum of 100 of them.

One June 28th, the Dealership has sold 91 Leafs. Now what? If they don't sell 9 more, than stand to lose the $91,000 they (thought) they'd already earned.

Here's what they do (in simplified terms).

Every salesman gets on the phone and calls every Leaf customer they've had for the last 90 days and offers them the "deal of a lifetime". They offer Leafs at $3000 UNDER Invoice price. (Remember, they have to get to 100 or they lose $91,000.)

They sell the (9) Leafs they need to sell, but "lose" $3000 each.

The math works like this:

(9) vehicles sold for $3000 under cost = $27,000 "loss".

(100) vehicles sold, with a $1000 "incentive" to the dealer = +$100,000.

Net in Dealer Incentives = + $73,000.

This is an over-simplification of the process, but other than a few details, that's the basic premise of how it works.

I also haven't mentioned the "Inventory Allocation System", which is also a critical component, related to how much you have to pay for a specific vehicle.

All the above is why I laugh every time this "how to negotiate for a new car" thread shows up. As ShippingUpToBoston aptly said, the customers are playing checkers and the dealers are playing chess. The average customer has no clue how it all works. Some of us in the business, have trouble figuring all the angles. [Yes, I'm a consultant to a very successful Automotive Group. I mostly do the real estate, but used to be on the other side of curtain.)
To me, when buying a vehicle, the invoice is a totally worthless document. If a saleperson hands me the invoice, I just hand it right back because I don't trust any information on it.

[Michael G.]

I can confirm what you say is partially true.

Here's a brief primer:

There are 2 "sticker" prices (for lack of a better word).

First off, every new vehicle for sale in the USA, must have a Monroney Label (MSRP) affixed to the window. This is required by the Automobile Information Disclosure Act of 1958. (Named after Mike Monroney, who filed the legislation).

The profit margin from Dealer Invoice to MSRP will run about 4% - 13% profit margin. Some less, a few a bit more. There is no standard.

If you were to look at a Dealer Invoice, you would see "adjustments" to the Dealer Invoice Price. They would include things such as "advertising allowance", "floor plan assistance" and "hold back". These are monies which are rebated to the Dealers, under various scenarios and conditions. They could amount to as much as 3% - 4% of the Invoice price.

You might also see "Factory Incentives", which could be any amount of money, depending on the manufacturers need to sell certain vehicles, over a given period of time.

So the answer to your question is, "yes, under some circumstances, Dealers will still make a 'profit' if they sell a vehicle under Factory Invoice". That doesn't mean they make a "net profit", because there's overhead and commissions to consider.

Here's the biggie, the public doesn't understand and is usually not privy to ... but can make a huge difference in what you pay for a new car.

I'll try to explain it, in a (fairly) simple example.

Nissan is having trouble selling their "Leaf" model, so they set up an incentive program for the Dealers and it goes like this:

We (Nissan) will rebate you (the Dealer) $1000 for every Leaf you sell, between May 1 and June 30, provided you sell a minimum of 100 of them.

One June 28th, the Dealership has sold 91 Leafs. Now what? If they don't sell 9 more, than stand to lose the $91,000 they (thought) they'd already earned.

Here's what they do (in simplified terms).

Every salesman gets on the phone and calls every Leaf customer they've had for the last 90 days and offers them the "deal of a lifetime". They offer Leafs at $3000 UNDER Invoice price. (Remember, they have to get to 100 or they lose $91,000.)

They sell the (9) Leafs they need to sell, but "lose" $3000 each.

The math works like this:

(9) vehicles sold for $3000 under cost = $27,000 "loss".

(100) vehicles sold, with a $1000 "incentive" to the dealer = +$100,000.

Net in Dealer Incentives = + $73,000.

This is an over-simplification of the process, but other than a few details, that's the basic premise of how it works.

I also haven't mentioned the "Inventory Allocation System", which is also a critical component, related to how much you have to pay for a specific vehicle.

All the above is why I laugh every time this "how to negotiate for a new car" thread shows up. As ShippingUpToBoston aptly said, the customers are playing checkers and the dealers are playing chess. The average customer has no clue how it all works. Some of us in the business, have trouble figuring all the angles. [Yes, I'm a consultant to a very successful Automotive Group. I mostly do the real estate, but used to be on the other side of curtain.)

This makes sense and sounds like "the timing" element here is important and what
are the chances?
The last day of the month or last month of the year sounds good time.

Also, isn't there a website posted somewhere that listed the price under MSRP paid by dealerships for each new model car/truck?

[retiredguy123]

This makes sense and sounds like "the timing" element here is important and what
are the chances?
The last day of the month or last month of the year sounds good time.

Also, isn't there a website posted somewhere that listed the price under MSRP paid by dealerships for each new model car/truck?
If dealers are paid a bonus based on how many vehicles they sell, how can an invoice for an individual vehicle possibly be accurate?

[Tyson]

Cant see the video. What happened?

[retiredguy123]

Why would car sellers use the last day of the calendar month to give the best deals, when they can define the selling month to end on any day of the month they choose? To me, this sounds like another sales gimmick.

[Shipping up to Boston]

Why would car sellers use the last day of the calendar month to give the best deals, when they can define the selling month to end on any day of the month they choose? To me, this sounds like another sales gimmick.

They do..
Just like they release new models around September for the following calendar years vehicles. It’s fluid. Just like municipalities fiscal year ends on June 30....private businesses, some end on April 30 and some run a calendar year.

[Rainger99]

Cant see the video. What happened?

I have no idea what happened to the video. It has been taken down but there is no explanation. I assume that the auto dealer may have complained about it.

I think it had well over a million views when I posted it.

[BrianL99]

They do..
Just like they release new models around September for the following calendar years vehicles. It’s fluid. Just like municipalities fiscal year ends on June 30....private businesses, some end on April 30 and some run a calendar year.

The post you quoted is 100% wrong. It is not fluid, in any way, shape or form.

The "month" for auto dealers ends on the "Last Reporting Day" of the month, per the manufacturers calendar. For internal accounting purposes, a dealer can do whatever he wants, but new car sales have always run on a monthly reporting cycle and are required to be reported that way.

All manufacturers in the US, require "monthly reporting" and they see monthly statements.

For internal purposes, *could* a dealer change his "accounting month"? Sort of, but it wouldn't really change the manufacturers' requirements regarding monthly reporting days (which is usually the first week day, after the end of the month).

Manufacturers will sometimes play with their "reporting month", internally.

Let's say the predicted #'s show that Honda is going to outsell Toyota for the month of October (because Toyota had a vehicle shortage). Toyota might finagle their October #'s because they already know they'll be #2 and move those sales into November, to show a huge "win".

None of that affects the dealer, because they are required to report all sales at the end of a calendar month (there are some nuances that have to do with the reporting [RDR cards]), but it's too esoteric for this discussion and not relevant.

[retiredguy123]

The post you quoted is 100% wrong. It is not fluid, in any way, shape or form.

The "month" for auto dealers ends on the "Last Reporting Day" of the month, per the manufacturers calendar. For internal accounting purposes, a dealer can do whatever he wants, but new car sales have always run on a monthly reporting cycle and are required to be reported that way.

All manufacturers in the US, require "monthly reporting" and they see monthly statements.

For internal purposes, *could* a dealer change his "accounting month"? Sort of, but it wouldn't really change the manufacturers' requirements regarding monthly reporting days (which is usually the first week day, after the end of the month).

Manufacturers will sometimes play with their "reporting month", internally.

Let's say the predicted #'s show that Honda is going to outsell Toyota for the month of October (because Toyota had a vehicle shortage). Toyota might finagle their October #'s because they already know they'll be #2 and move those sales into November, to show a huge "win".

None of that affects the dealer, because they are required to report all sales at the end of a calendar month (there are some nuances that have to do with the reporting [RDR cards]), but it's too esoteric for this discussion and not relevant.
I didn't say anything was fluid. I just said that, if the manufacturer wanted to define the month to end on a day other than the last day of the calendar month, they could.

[sowilts]

Your loosing your azz on a new car either way so buy used and let others take the hit on a new car, IMO.
That’s the best advice. Agree and some extend the warranty.

[Topspinmo]

What's the point?

That automobile prices are negotiable, just like homes, repairs and most any big ticket items?

Not really they’re not going deal unless they get what they want.

[Rainger99]

Article on how to haggle.

How Much Can You Negotiate On a New Car - CarEdge (https://caredge.com/guides/how-much-can-you-negotiate-on-a-new-car)

[Two Bills]

I have never purchased a new car, always looked for low mileage pristine used.
Refuse to take the tax hit on new.
The only new cars I drove were leased when working.
My present car was ridiculously low mileage, and in as new condition.
The price was absolutely right for the condition, so I never even tried to get anything off.
Did ask and get extras though. Had car ceramic coated, new winter floor mats, half a year's road tax, full tank of gas, and a limited edition model car for my grandson who was with me.
Dealer and I were both more than happy with the deal.
He got his price, and I got more in extras than I would have ever got off the car.

[spd2918]

I am a car geek. I have helped several non-automotive friends buy new cars. I help them find the right car for them (lots of test drives) and then i research current prices. When it come time to negotiate, they wait in the lounge.

I should offer my services for a modest fee. I bet for $250 I could save people thousands.

[Lindawc]

Can’t view it. Says the video is private.

[BrianL99]

I am a car geek. I have helped several non-automotive friends buy new cars. I help them find the right car for them (lots of test drives) and then i research current prices. When it come time to negotiate, they wait in the lounge.

I should offer my services for a modest fee. I bet for $250 I could save people thousands.

Dealers LOVE "car geeks". To steal a line from someone else's post, "the car geeks are playing checkers and the automobile dealers are playing chess".

[Rainger99]

Can’t view it. Says the video is private.

See post 59. It was public when I posted it.

[spd2918]

Dealers LOVE "car geeks". To steal a line from someone else's post, "the car geeks are playing checkers and the automobile dealers are playing chess".

Could you explain your insult? I have been very sucessful negotiating deals for myself and others. If one believes TruCar stats, I paid the least of any reported buyer of a 2017 Ford F150 King Ranch.

[BrianL99]

Could you explain your insult? I have been very sucessful negotiating deals for myself and others. If one believes TruCar stats, I paid the least of any reported buyer of a 2017 Ford F150 King Ranch.

Sorry you felt insulted. After 50 years in the auto industry, I was merely pointing out the fact, that customers who identify themselves as "car geeks" are one of the industries favorite customers and generally, very easy to sell to.

Congratulations on your 2017 Ford Pickup!

As for TrueCar (I assume that's what you meant, as "TruCar" is a company in India, that doesn't really exist yet), I wouldn't recommend their stock. Their IPO went off at about $9/share if I remember correct and their business model fizzled and never caught on. Their stock has been under $3 for while.

[spd2918]

Sorry you felt insulted. After 50 years in the auto industry, I was merely pointing out the fact, that customers who identify themselves as "car geeks" are one of the industries favorite customers and generally, very easy to sell to.

Congratulations on your 2017 Ford Pickup!

As for TrueCar (I assume that's what you meant, as "TruCar" is a company in India, that doesn't really exist yet), I wouldn't recommend their stock. Their IPO went off at about $9/share if I remember correct and their business model fizzled and never caught on. Their stock has been under $3 for while.

You have a different idea of what a car geek is. TrueCar was a good company to show what people have actually paid for cars. I have never purchased thru them as I could always beat their best deals.

[keepsake]

Some dealers have monthly quotas. Go in on the 29th or 30th.

[ThirdOfFive]

Your loosing your azz on a new car either way so buy used and let others take the hit on a new car, IMO.
Bingo.

I've bought two new cars in my life; in 1972 and again in 1975 (well three actually: I bought the wife a new Toyota Rav4 for her retirement gift). Lightly used is always the best; they don't depreciate as fast (some actually appreciate in value), insurance is usually less and cash paid is always better than a loan. Just know what you want and what you want to pay, and know something about the vehicle you're looking at.