Car dealer negotiation HELP!

[NewlyCarCrazy]

I just recently got a price for a red 04 mazda3 hatch for about 16500$, 1000$ under MSRP, over the phone. The guy gave me this price without even knowing my name or telephone number. To me this is a good sign. In your experience, does this mean anything? or is this another scheme to get you inside the dealership?

The car itself is in a corner and has not been moved for what looks like a month at least (a lot of rust on brake disks). Red is also an unpopular color for the 3. And to top it off, the car is a manual.

Finally, how low do you think I should go? This is (in his words), "just above invoice(which is almost true)" and "he is dying on this deal(which is ****)". He even mentioned "the sales meeting" in which he made "promises to make profit (BS!)". I plan on bidding 14000 and seeing where it goes. Any suggestions?

[magnus]

I always check Kelly Blue Book before going to a dealer. That way I know what invoice is. The first thing I ask for is their invoice sheet for that car. I can then check against KBB to see if their fudging.

Know what you want to pay, out the door before going in to the dealer. If you let them figure it for you, you most often feel pressured into going with what they want. Know what you want and walk away if they don't give it to you.

I've heard the theory of not making down payments. In reality for every $1000 you put down, it only takes about $5 off the monthly payment. If you are going long term, it really isn't worth the down payment.

Remember that you will be paying tax, license, registration, etc., etc. That all factors in.

KBB says the 2004 Mazda3 Hatchback (Manual trans. is standard) is $16,508.00 for invoice. MSRP is $17,625.00. I would tell them $15,000.00 out the door and nothing more. If they don't take it, walk away.

[Don]

Originally posted by magnus
I would tell them $15,000.00 out the door and nothing more. If they don't take it, walk away.

Take a calculator with you so you can keep better track of the figures he's throwing at you, he'll eventually try to avoid the "bottom line" and start asking about payments and "How much can you afford to pay a month."

Be careful of the time of the loan (24 mo, 36, 60 etc). Taking out a longer loan will reduce the payments, BUT it will increase how long you have a balance to pay interest on (their way of giving with one hand while taking back with the other).

Walking out is a good idea, but without the ultimatum. "I'm sorry. you can't seem to get me what I want." Is a good exit line (especially if a manager hears it too). Make it seem like you're disappointed (won't be hard) that you couldn't come to an agreement, then walk out the door AND LEAVE (will be hard).

They WILL try to stop you from going, but tell them that you just can't seem to agree AND LEAVE...as long as they have your info THEY WILL CALL YOU BACK. Especially if the car you are after has been sitting there collecting dust, and doesn't look like it will sell soon. When they call you back, wait a few days before returning.

If you're looking at an '04 model, you do have a bit of an edge. They need to get rid of it because 1) It's dead money to them, they're going to have to pay taxes on it for the new year which will probably be higher and 2) It's now an older model which might be harder to sell now that the 'new' model is out...particularly if the new models have been 'improved.'

Another thing, as for the loan, I know that if I go through my car insurance agent, I can often get a better interest rate. Plus maybe you could get a discount since you're paying on both insurance and a loan to them.


Good Luck

[NewlyCarCrazy]

I forgot to tell you that this would be a cash purchase. Is that going to lower the price because they would get a chunk of change right away?

[gb387]

Try this site: http://autos.msn.com/research/vip/ov...=11049&src=vip

Click price it with options and it will give you invoice. After shopping for my Lightning I found it to be helpful.

Don is right in all areas! Don't buy it on the monthly payments you NEED to know what you are going to pay for the car. I know I walked out of two dealers when I was not happy they kept calling me back and I kept saying "I told you what I can spend and thats it" It only took two days and finally one gave it to me for what I wanted. Good luck!

[magnus]

Originally posted by NewlyCarCrazy
I forgot to tell you that this would be a cash purchase. Is that going to lower the price because they would get a chunk of change right away?

It makes a big difference. This will get your price even lower. This gives you a big edge. Tell them you have $14,000.00 cash to give them, nothing more, and that is the 'out-the-door' price. If they don't give it to you, take Don's advice and walk out.

Good luck!

[Mosca]

Originally posted by NewlyCarCrazy
I forgot to tell you that this would be a cash purchase. Is that going to lower the price because they would get a chunk of change right away?

No, because even on a finance deal the contract assignee pays the full amount within a day or two.

There are as many negotiating strategies as there are people. The best advice I can give:

1) Be nice. It's always easier to give a good deal to someone you like, rather than someone you just wish would leave.

2) Knowledge is power. The more you know, the more confident you are in your offer. Confidence is victory in negotiations. With confidence, you have more options; you don't have to leave not knowing if you walked out on a good deal or a bad deal, but just walked "because you're supposed to." If you know you have the nuts, you can take delivery right there with confidence.

3) The #1 mistake that I see people make is forgetting all their research as soon as they shake hands. It's called "hitting your head on the bumper". Be nice, be polite, but keep control. If you get emotional, you lose. If you get mad, you lose. It's called "bouncing the customer off the ceiling". It makes YOU look like the irrational one.


Practice these words: "Thank you for your generous offer, but it's not quite what I would have liked." The next thing back will be, "What did you expect?" Reply with your number. The response will be "And how did you arrive at that number?" Justify it. The response will be, "If I can get that will you buy the car?" ANSWER TRUTHFULLY. If the answer is "no", say no. If it's yes, say "yes".

If you say "yes" and the negotiations continue, they will either hit your number or make a counter offer. If they make a counteroffer, ASK THEM TO JUSTIFY IT; after all, they asked you, right? Whatever they say, reply that you appreciate the generous offer, but you see it differently, and if they get to your number you'll buy the car now.

At some point, if your number is realistic they'll get close enough that you'll consider accepting. Use your best judgement. If you want the car and the number is OK, then buy it. If you feel that there's a little more out there, and that you left enough room in your number, pass, or ask them to throw in something at the end, oil changes or a couple inspections or something. THe rationale is, the dealer will always try to get a little more than your last offer, and you'll always try to get a little more than his last offer, and that's a good thing. It lets both parties feel like they've hammered out a fair deal. Think about it; if you make an offer and he comes right back with "OK, you got it!", what's the first thing you think? Tht your offer was too high!

Have fun, and don't take anything in negotiations personally; after all, you have to protect your wallet, and the other guy has to protect his, and that's the American way.


Tom
(Car sales and management since 1986)

[NewlyCarCrazy]

I just contacted two different fleet departments. They both gave me similar numbers for a match to the car I want, about 16700. They also gave a quotes for a comparable 05 for 16900. Now, who in there right mind would buy a year old car when in a year it will be worth 1000 less than the 05? That can't be right.

Do fleet departments give the best deals? Or do they only do "non-negotiable" ones. I find it very hard to accept their price when I could get an 05 for the same price. Something has got to give. They said (of course) that these were the best prices for the entire dealership. Is that true? Would haggling with a salesman with your techniques work better?

[alanceperson]

Car Crazy. I Worked recently for a dealership. Used cars were more money for sales person when they sold a car. Salespersons would always show persons buying used cars in the back that where not detailed and with no price tag. I asked one why they did this. He said for new cars they only got $90 for each sold. For a used car sold that saleperson would get 20% of the profit made for the dealership. For Example , a car was bought from a trade in for cost 16000 . The dealership wants to make 1000 for that car.Puts a price on it for 17,000. Once they price tag the car the people buy the car Know the price and the salesperson can only make 20% of that 1000. So if the salesman beat the dealership at putting a price on the car . Lets say he put 18,000 on it he made 2000 for the dealership and would get 20% of 2000. Thats why most year old cars are priced almost to the new ones. Not sure if all Dealerships are this way . If it was I I'd talk them down on the new 05 for longer warranty. Just watch out for back lot deals.

[Mosca]

alance, I think he's comparing new 04s and new 05s.

Sometimes that price stuff happens. There could be any number of reasons. I couldn't speculate on this particular instance.

All dealerships are different. If you think you'd get a better deal by haggling, try it. If you did your research and the deal seems fair and you appreciate the no-hassle approach, buy the car. In MY dealership, those deals are the lowest profit, but they're also usually "found money", in that they capture customers that are from out of our area of responsibility usually, and we don't have to tie up the manpower for half a day haggling. Haggling takes up time, time that has to be paid for somehow. The fleet department works on the competitiveness of the price. IMO, it's a little unreasonable to take the "best price right now" channel and then want to haggle further, but if you like doing it, go ahead. It never hurts to ask.


Tom