I buy/sell a car at least 2 times a year but I've never traded one in. I'm willing to take a little hit because of the ease and I originally bought the car for less than trade in value. Any tips? Any dealers around here are known for playingmore?

10/11/2012 7:34:09 PM

negotiate the price of the car you want to purchase first without mentioning a trade-in. when they ask (and they will) tell them no and you have already secured financing. get the price in writing. leave and take trade-in to carmax buying center on capital to get price. leave there, go across capital to hollingsworth to get their price. get both prices in writing.
go back to dealer next day. have them give you a price on your trade-in. show them how the other two are much higher offers. have said dealer match the other prices. profit.

keep in mind much higher profit can be had by selling the trade-in vehicle yourself which you should already know. if you buy and sell 2 cars a year it shouldn't be any hassle at all for you to buy or sell a car since you're so familiar with the process. besides, so what if you paid less than trade-in for it? does that mean it's okay to let a dealer assrape you? take the profit and open a Roth IRA. when you turn 65 you'll really profit.



[Edited on October 11, 2012 at 8:41 PM. Reason : -]

10/11/2012 8:36:20 PM

^ That's not a bad plan.

But.

A) Dealers don't like to give price in writing. They'll think you'll take that price to another dealership who will try to undersell them. If dealers think you are just there to snag a "best price" and walk out the door with no intention to buy that day, chances are you won't get the best price.

B) No harm in telling them about the trade in up front, as long as you understand that your trade in value and the car you intend to purchase are "two separate transactions." (ie; price each item separately instead of looking at the net cost of the deal). It is a good idea to see what other places like Carmax will give you for your trade, but why wait until AFTER you've stopped by the dealership to go to Carmax to price your trade in? Go to Carmax first. If the dealership beats the carmax price, then you are done. If not, bring up the Carmax price and ask to match it, or beat it and you'll have a car deal.

[Edited on October 11, 2012 at 9:58 PM. Reason : .]

10/11/2012 9:56:58 PM

Quote :

"Dealers don't like to give price in writing. They'll think you'll take that price to another dealership who will try to undersell them. If dealers think you are just there to snag a "best price" and walk out the door with no intention to buy that day, chances are you won't get the best price. "

which is why you ask them to put the price in writing after the negotiations are done. of course dealers don't like to put the price in writing. they want to make the most profit as possible. however, when the dealer says they won't put it in writing you tell them your intentions are to go other places to find out who's got the best price. this lets the dealer know you are serious. also inform the dealer that if they have the best price they have nothing to worry about and will get the sale. if they absolutely refuse to put it in writing it's because their price is too high and know it. politely tell them thanks for their time and you'll visit another dealer who is serious about making a sale. they'll reconsider. if not, you don't want to do business with them anyway.

Quote :

"No harm in telling them about the trade in up front, as long as you understand that your trade in value and the car you intend to purchase are "two separate transactions." (ie; price each item separately instead of looking at the net cost of the deal). "

you might consider it as two separate transactions but the dealer won't. they will either give you nothing for the trade-in or take off as much on the price. period. you have to do the negotiating first and come back with the trade later. it's just how it works.

Quote :

"It is a good idea to see what other places like Carmax will give you for your trade, but why wait until AFTER you've stopped by the dealership to go to Carmax to price your trade in? Go to Carmax first. If the dealership beats the carmax price, then you are done. If not, bring up the Carmax price and ask to match it, or beat it and you'll have a car deal."

true. valid point.



and i understand my tactics are difficult because it takes balls to be so forward with a stealership and to not be afraid to walk away. but keep in mind you are the customer and without you they wouldn't be in business. i've also had to remind the sales manager that it's better to make $500 and move overhead than to lose a sale and keep the car on the lot. dealers get incentives from the manufacturer for moving volume which makes up the profit decrease. sometimes they just need to be reminded of this.

10/15/2012 12:23:13 PM

You are preaching to the choir; I've worked in a dealership before and I have insight from both sides of the table. I'm not claiming to be an expert here, but a lot of consumers have got this "evil dealership" complex all wrong when it comes to buying a car.

Your tactics are difficult because they are just that: difficult. You are making extra steps that shouldn't be necessary. I don't get why this process has to be a game. It doesn't need to be difficult. If both parties (customer and dealership) are straight forward, the deal will be smooth. I know this is true because it's how I did business when I sold cars and it's how I do business when I buy them. I personally have never spent more than 10 minutes in negotiations for myself, and I'm 3 for 4. (Johnson Lexus didn't want to be straight forward, so I called Flow Lexus and sealed a deal on the phone in 4 minutes).

Quote :

"it's better to make $500 and move overhead than to lose a sale and keep the car on the lot. dealers get incentives from the manufacturer for moving volume which makes up the profit decrease. sometimes they just need to be reminded of this."

This is true.

Quote :

" they will either give you nothing for the trade-in or take off as much on the price. period. you have to do the negotiating first and come back with the trade later. it's just how it works."

This is not true. They may try to play the four square numbers game with you, but if you make it very clear you aren't there to play a bs numbers games from the very beginning, a deal can be had quickly that both parties can agree on. I haven't actually met a manager that wanted to waste time on a deal. They want to close. The more time the customer is taking the sign the papers, the less money that manager is making. If your first offer is a reasonable offer, there ain't no way they'll decline it.

Again, know what numbers you are comfortable negotiating; one for your trade in and one for the car you want to buy. Make sure these numbers that they present on the "four square" is where you want to be and that the final cost also makes sense. The first pencil in won't be what you want. That's the perfect time to tell them what you are looking for for each. When they come back, if the numbers are there, you are golden. If not, give them one more chance or come to a compromise. If anything is too far off, the deal is no good and tell the dealership that. If they waste more than 10 minutes of your time, tell them you appreciate their time and walk out. This isn't hard at all. Apply some common sense and you'll be fine. There's nothing wrong with being straight forward. If you want to waste your time playing the back and forth, waiting it out until someone taps out, then so be it. But I'm telling you, there's no reason to go that route unless the dealership is just being an asshole and not cooperating by denying you a straight forward negotiation.

Quote :

" also inform the dealer that if they have the best price they have nothing to worry about and will get the sale."

Dude, that's not always going to work. You know what will work? Do your research. Know what your cars trade in is worth. Make sure you get that much from the dealership.

Second; use this formula

Sticker is $X, Invoice is $Y, then...

$Y *0.03 = Dealer holdback. (estimate)

$Y- Holdback = Dealership Cost

[Dealership Cost * (profit)] - rebates = Your Offer for the car

Reasonable profit is between 3-5%.
I'd start at 3% and depending on the car, would be willing to negotiate up to 5% profit.
so..

((Invoice - holdback) *1.03) - rebates = Offer for the car

Add Tax (2.5% iirc), tags, title and you are golden. Don't pay the Doc fee. They can manipulate whatever way makes them happy (ie, take an additional $450 doc fee out of the price of the car to negate the doc fee they add to the end of the negotiations).


Final forumla should be:

(((Invoice - holdback) *1.03) - rebates - trade in)*Tax + Tags + Title - Doc Fee = OTD offer.

[Edited on October 15, 2012 at 1:36 PM. Reason : .]

10/15/2012 1:10:51 PM

^everything you've stated is true if every dealership were identical to the one at which you worked. the problem is they're not. my first offer is the only offer i'm willing to pay. that offer is derived from the research i've already done. most dealerships will laugh at the offer because they absolutely refuse to have that small of a profit margin. however, a few will and those are the ones that make the sale. every new car i've purchased either for me or family member has been a week-long process. should it take that long to purchase a car? absolutely not. the dealerships make it take that long because i have to go face-to-face at each one to get the best deal. you might get a decent deal over the phone but there's no way you'll get the best deal which is what i'm after and what i get. i'm very straight forward when i talk to the salesperson and very rarely is the salesperson straight forward with me even if they tell me they'll do so. the "evil dealership" complex comes from the dealers. and i appreciate your attempt at being an honest salesperson but a salesperson can only be as honest as their sales manager will allow.

10/15/2012 4:48:37 PM

Quote :

"an honest salesperson but a salesperson can only be as honest as their sales manager will allow. "

True.

I've negotiated 4 of my own vehicles. I sealed the deal for 3 of them in less than 10 minutes. One of them required me to go to another dealership and that deal was sealed after 3 minutes of talking on the phone with the sales manager from the second dealership.

If you know what you want, and how much you want it for, then the dealership won't mind making only a few hundred on a sale that took no real effort on their part and consumed the least amount of time. If you invest time in the dealership, sitting down with a sales rep, browsing through inventory, chit chatting, etc, it is harder to use my method. Most managers are after that $texas profit margin, but they'd be a fool to turn away a quick buck.

Will this give you the absolute best deal? Chances are probably not. Everyone values time and money differently and I can respect that. Playing the game for up to a week to save ~$200 isn't worth it to me. Managers also tend to remember the "easy" deals vs the "difficult" ones, and are more apt to help you out in the future if you were an "easy" fella.


[Edited on October 15, 2012 at 7:36 PM. Reason : .]

10/15/2012 7:32:07 PM

Quote :

" Playing the game for up to a week to save ~$200 isn't worth it to me."

agreed. Opportunity cost is important as well. how much is your time worth to you? I don't have much free time, so time tends to trump money in most situations, accounting for my pay per unit time.

10/15/2012 7:50:04 PM

i don't play the game to save $200. i usually end up saving $4000. ex: last car i bought was in '10 for my dad. '10 nissan versa. sticker price was $16,200. i ended up with an otd price of $11,900. dad rode the train down. i picked him up from the station and dropped him off at the dealership. they handed him the keys and he drove away in his new car. that was well worth a weeks worth of negotiations. granted the time came from dealing with other dealers during the week who all said the deal couldn't be done since there was no profit from it. i guess they don't move as many cars as crossroads. i will say crossroads was easy to deal with and were the most honest about the deal.

10/17/2012 9:41:46 AM

Cool story... But oyu missed my point... I spend no more than 10 min overall and get the car at a great price, vs you spending a week or more go and back and forth across several dealerships just to save a couple hundred compared to my method. You play the game to squeeze the extra $200 or so. Nothing wrong with that. Some people just choose time efficiency over a slightly better deal.

[Edited on October 17, 2012 at 3:20 PM. Reason : .]

10/17/2012 3:00:18 PM

i didn't miss your point. you missed mine. you wouldn't have gotten that deal in 10 minutes. a dealer is going to make you work for it.

10/17/2012 8:18:44 PM

Quote :

"i didn't miss your point"

Haha. Okay buddy. If you say so.

Quote :

"wouldn't have gotten that deal in 10 minutes."

There's a lot of information left out on how that deal was structured because I highly doubt you paid $11.9k OTD for just the Versa; you had to have a trade as a dealer isn't going to lose a few grand just to push one car. I digress, I don't care to know the specifics. Good for you. Congrats.

10/17/2012 8:35:04 PM

don't you know that every tww garager pays 75% what everyone else pays for any car and always makes at least $5k every time they sell a vehicle.

really makes me wonder why they aren't all just flipping cars full time

10/17/2012 8:38:32 PM

Oh. I thought that was just Ahmet

10/17/2012 8:49:46 PM

^^^like you said, it's important to do your research first. i knew what they were paying for the car. honest truth: it was a cash deal (i actually told them i'd bring them cash but they requested a personal check since it was easier to deal with. they simply made a call to my bank for fund verification.) there was no trade-in. the vehicle my dad had previously i own now (90 jeep cherokee). sales manager said the price was $500 below invoice but all the research i did showed it to be $500 above invoice. who knows? sales manager did say i should start my own car buying service. lol.

having worked at a dealership you should know what kind of markup that comes with new cars and should know this deal is doable. i think the big factor was the fact i came in knowing exactly what i wanted and what i was going to pay. they asked what other dealerships had quoted but i wouldn't tell them. instead, i told them whoever comes in lowest gets the sale. the sales manager said no one would be able to sell me the car for what i was willing to pay, and he was correct, but also said that he could if i'd be willing to take a car off his lot. i said sure as long as it's grey, has power windows and doors, 1.6l w/ auto, and a sedan. sure enough they had it. deal was done.

10/17/2012 9:14:32 PM

You know that much about buying cars and you still let your dad drive off in a Versa?

10/18/2012 7:56:47 PM

hell yeah. why not? car's been great.

10/18/2012 9:28:10 PM

i think NRR won the thread.

10/19/2012 8:10:47 AM

lol @ NRR

I do think a lot of us obsess over cars enough to wait till we find a fantastic deal to pull the trigger. And the other half just likes to spend money on german shit so they get CPO everything thus can't negotiate much.

I actually am thinking about getting a dealers license and flipping cars on the side. I'm not saying i'd be good at it but i shop for deals on cars like my wife does with clothing so i think i'd be aight with it...

I would have flipped my roo if i wasn't in desperate need of a ride when i got it and i have the other issue where i personify cars... and it kinda breaks my heart to sell them when they're in good working order.

10/19/2012 8:27:05 AM