Haggling for dummies, non-confrontational style (& get the best price for a NEW car)
Dec 29 '00 (Updated May 21 '02)
The Bottom Line You don't have to have haggle know-how to get a good deal. What you do need to do is a little research!
If you are willing to work just a little, you'll be surprised at the price you can end up paying for your new dream car. My husband & I followed this process recently, and it worked even better than we could have imagined! Hopefully we'll get around to reviewing our 2001 Ford Explorer Sport Trac soon (we love it so far). Just a disclaimer—my husband and I did not originate this method. I read about buying a car this way several years ago in Consumer Reports, and the idea stuck in my mind. This epinion is just about how we implemented it and how well it works!
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Recommended equipment
Fax machine or PC faxing capability, e-mail account, eFax/J2 number (or another similar service that allows you to receive a fax)
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What do you fancy?
First, you need to decide on what new shiny car you want (and of course make sure you can afford it—but that’s another subject altogether). Do some research online (read epinions (of course!) & Consumer Reports, etc) to narrow down your choices. I also recommend visiting www.edmunds.com as well as some of the online buying sites to see what models are out there and to see what options are available for each model that you like. If you are looking at a new model, it also may be very helpful to visit member forums to get feedback on how the new model is performing (this was the case with the Sport Trac-no data at all on it in Consumer Reports-but plenty of mostly positive new owner feedback).
Take a test drive
Once you are at the point where you have narrowed down your selection to a few models, you'll probably want to take a test drive to help you—so go to the local dealerships that have the cars you want, and ask for a test drive for your vehicle of interest. Try to get a feel for the options you want. The salesperson will probably want to try to sell you a car right away—DO NOT GIVE IN TO TEMPTATION—even if you do fall in love! Sure, it would be cool to drive that baby home, but if you wait, you can have her for a whole lot less. Simply tell the salesperson that you are still at the research stage, and you will take their card and call them back if you are interested. Nicer salespeople will respect this, but for those that are really pushy, just keep repeating the above phrase as if you are a robot—and as a robot—just walk away when you are done with your test drive.
Make a decision
OK, so now you must make your final decision. If price is a factor, compare the invoice prices (don’t even worry about MSRP) with the options you want online. You can do this at www.edmunds.com, but be careful—some options may not be available without other options. You might try the manufacturer’s web site or a site like www.carsdirect.com to make sure you are building something that is really available. Have you decided yet? Do you know which options you want? Are you set with your financing? (It’s nice if you can secure your own thru a credit union or one of the online banks such as www.peoplefirst.com or www.e-loan.com (peoplefirst offered us better customer service will match the e-loan rate if it happens to be lower in your area.) Great! You’re ready to wheel & deal now! (Read achoo's slightly bitter epinion to see why you *don't* need to order the Consumer Reports New Car Price Report: http://www.epinions.com/mags-review-61B-E6FCD3B-39AB3545-prod6.)
Get ready to wheel & deal—the modern way
Now prepare a brief letter. Address your letter to Internet/E-commerce New Car Sales. If any of the sales folks at the dealers you visited were nice, you can give them a shot at the sale by addressing your fax to them instead. The body of your letter should state that you are ready to purchase a new "insert year car here" with the following options (make sure you list exactly what options you want—even include the color you want) in a couple of days, and that you are looking for the best deal available to you. Request that they fax/e-mail you with their best offer. Check your letter for accuracy, and make sure you have noted your e-mail/fax #.
Look up the fax numbers for all the dealers in your area—and extend your search to include a large radius around you. Find out the dealer info from the main dealer page (i.e. www.ford.com) or use one of the online yellow pages to look them up. Remember, the more you dealerships you send your document to, the better your chances to make a super deal. My husband and I sent out faxes to over 20 dealers.
Now for the fun part! Look for the offers to start streaming in. It can be pretty exciting to think you will soon be driving a new car! However, don't let the excitement distract you from your purpose. You need to go over very carefully what options are on each vehicle as many dealers may not have the exact model you requested. I recommend making a spreadsheet so you can calculate the invoice price for the cars they are offering, and calculate the amount over invoice that they want. After you have given everyone a full business day to respond, look over all your offers. Now is the time to start letting the sharks compete with each other for your business! E-mail/fax/call the dealers offering the 2nd & 3rd lowest price relative to invoice (for vehicles with options that you want), and ask if they can beat the price of your lowest offer (again, relative to invoice). Most likely, they will. (Meanwhile, still be on the lookout for more offers) Then go back to the original dealer with the lowest price, and ask if he/she can beat your new lowest price. That dealer may go lower… if so, repeat the process with dealers 2 & 3. If dealer 1 won’t go any lower, see if dealer 2 or 3 will underbid each other any more. Even if you feel that you are getting a good deal, keep getting them to lower their prices until 1 dealer has a price that no one will match. You can let the other 2 dealers know that you are buying elsewhere, but if you change your mind, you will be sure to contact them.
Also, as a side note, a couple of dealers may call you if you have included a phone number. Make sure that they do still e-mail/fax you the offers so you can see that all the options you think are there are really there. If they start pressuring you that a deal is only available "today" or some other nonsense (we got the excuse “the other manager won’t let this deal go through), don’t cave in. That deal will be there later, rest assured!
Oh, did you have a trade-in (again, it is completely another topic whether you should trade-in or sell your used car yourself)? If so, while you are in the research stage, make sure you learn the trade-in value of your car, but keep that out of your price negotiation. Don’t even mention it until you have a firm offer from the lowest priced dealer. Make sure to ask for the itemized drive-off price so you can see the price after all the taxes & fees have been added. Now you can mention you have a trade-in (they probably won’t give you a price until they see it), and arrange for a time to meet your salesperson.
Once you get to the dealership, they will look at your trade-in. Make sure they offer you a fair price for your car. If you are comfortable negotiating in person, do give them a counter-offer a time or 2 to see if you can better your price. Then, wrap up the deal! It of course will take a bit as they will have to process all your title paperwork, tags, etc, but you will know that you have paid the lowest price your market will allow!
Speed up your time at the dealer - Update: May 21, 2001
If you are interested in speeding up your time at the dealership, check out the comments. One person gave some excellent suggestions to minimize all the processing time.
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So, how did this work for us?
Well, during our research we found out that no rebates (local or national) were available for the Sport Trac. This meant that we really were working around invoice pricing (if there are rebates you can easily go under invoice). Although dealers still make money on holdback (usually 2-3%; you should discover the amount for your vehicle of interest during your research), the holdback is a sacred profit that most dealers are not willing to sacrifice for a sale. We picked out the options we wanted, faxed the letter out as I mentioned above, and did our negotiation. No dealer had the exact same options we wanted, but quite a few dealers had Sport Tracs with options that were very, very close to our ideal. We ended up buying our Sport Trac for $375 under invoice—actually cutting into the dealer holdback profit! How did we do that—especially on a higher demand vehicle? Well, we wanted to know, too, since everything we had read pretty much said we wouldn't be able to cut into the holdback profit. We asked our sales guy, and he told us his internet sales dept really needed some sales—so basically he made us a deal so sweet that he knew his competition wouldn't match it! (In fact, we were told by the other low offer dealers that they weren't that desperate for a sale!)
Lessons we learned:
1. If you fax to enough dealers, you'll probably find someone who is desperate for a sale. Don't feel bad about this—not everyone is going to do the research involved to get a good deal—and the dealers will make their profits on those people.
2. You will be offered a better price than you will see through the online buying sites because you do actually add a bit of negotiation to the process.
3. You can minimize the the stress of haggling by using fax/e-mail
4. By using the fax/e-mail method, you will be automatically directed to the e-commerce dept or internet sales dept. You will most likely be treated a little better because they know you have done your research!
5. Once you get your lowest offer, ask for a drive-off price (in writing, of course), just to make sure they aren't any unwelcome hidden fees.
Good luck with your next new car purchase!
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Epinions.com ID:
pipet
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Location: San Diego, CA
Reviews written: 17
Trusted by: 35 members
About Me:
A baby, school, and a new house; lots to write about but no time.
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