From: wiryaman@riscee.pko.dec.com (Santa Wiryaman)
Newsgroups: rec.autos
Subject: Re: buying a new car
Date: 30 Jul 92 22:05:32 GMT
Organization: Digital Equipment Corporation, Maynard MA

In article <1992Jul30.174003.5648@fid.morgan.com> joec@fid.morgan.com (Joe Collins) writes:
>I am likely buying a new car in the next 30 days.
>I am shooting for an end-of-model-year sale, just before
>the `93s go on sale.
>
>I *hate* overpaying on cars and would like any tips,
>suggestions, etc for when I deal with the car sales
>critters. I will have an 1987 Maxima (70,000 miles, loaded)
>as a trade in. The tradein value is probably $5000-6000 on the
>car.


I recently purchased a new 1992 Mazda MPV and traded in my 1985 Maxima at a
very good deal.  Here are some experience I learnt through the process that can
be useful for you.

Getting a good deal:

Getting a good deal on the new car and the trade in requires a lot of time and
effort on your side.  Depending on your timeframe and how you value your time,
it might not worth getting the absolute low price.  I get the most satisfaction
in getting the best deal around, so I am willing to spend the time, effort and
emotion.

Do your homework:

 0. Read the book by Remar Sutton about buying a car.  The title escapes me, but
    it is available at town libraries or bookstores.
 
 1. Decide what car you want with what options.  Visit dealers to find all the
    features, test drive, etc.  Also ask for the price and how much they will
    discount the list price.  Do not bargain at this point, but use their quote
    to roughly compare which dealer to come back when you are ready to deal.
    At this time, also ask the dealer how much they will buy your car.  Ask for
    the wholesale value of the car rather than trade in allowance.  With
    this you can set your expectation on the value of your car.  Make a note of
    the list price of the cars, each individual option, and destination charge.
 
 2. Get the dealer cost of the new car with all the options you want, and 
    the wholesale price of your car (forget about retail price if you trade in).
    I got the figures for my new car from Edmund's and Consumer Guide, and for
    my old car from Edmund's and NADA.  Use the list price listing to check for
    accuracy of the dealer's list price.  To check the accuracy of the dealer
    cost, Remar Sutton's book has a profit percentage for specific cars.  List
    price minus this profit should be close to the dealer cost.

 3. Do not expect the dealer will sell a car below the dealer cost. They are
    not in the commodity business that are willing to sell at a loss to gain
    market share.  Even worse, customer satisfaction is not very high in their
    priority.  Think about it, after you buy a car, you probably won't come
    back to buy another car in years.  Car manufacturers, however, do lower
    their profit for gaining market share and this is usually reflected in
    lower dealer cost, rebate, factory dealer incentives, etc. 
 
 4. I called Mazda customer relations for information about rebates and dealer
    incentive.  There was $1000 rebate and no other incentives for MPV.
 
 5. You can try services that gives you a listing of good deals on particular
    cars in your area.  I believe AAA has such a service.  In MA. there is Mass
    Buying Power.  I tend to believe I can do better on my own.
 
 6. Do not trust prices listed in newspaper ads.  They are there to lure you to
    come to the dealer.  But I did quote the price and used it for the dealer
    (who had the ad or other dealer) to give me at least the same amount of
    discount on the particular car I want.
 
Battle time:

 7. Go to a dealer you are comfortable with (be it the dealer with the lowest
    quote that you had visited before or a new dealer).  The attitude of the
    salesman is important in getting a good deal, so choose a good salesman.
    This is the time consuming part.  I went to about 6 Mazda dealerships
    before finally being convinced to deal with a salesman at a particular
    dealer.  Also expect the frustration of your offer being rejected (nicely
    or otherwise) and having to find another dealer.

 8. Make an offer that is close or slightly lower than the dealer cost for the
    new car and a slighly higer amount than the wholesale price of your car.
    You most likely have to increase this offer, so make some room to do that
    (If you don't have to, than your offer is probably to high).  The salesman
    will most likely moan about it being too low and there is no way the manager
    will approve it.  This is fine because it is his job to sell the car at a
    figure close to the list price, the closer the better since he is on
    commision.  Chances he doesn't even know how much the dealer cost is.

 9. Express your seriousness of your offer.  Tell the salesman you are going to
    buy the car now and give him a small deposit (I gave him $50 check) that is
    refundable if you don't get the deal.  Show him your calculation of the
    dealer cost to convince him you are making a reasonable offer.  This step
    is important, because the salesman is your primary contact.  If he feels the
    offer is unreasonable, his manager will humiliate him, and his time can
    be better spent on the next customer who might be more ignorant than you
    are.  Without the salesman going to his manager for approval, no deals can
    be made.  So be firm to the salesman, but in a businesslike and positive
    way.

10. The bargaining starts at this point, either with the salesman going back
    and forth between you and his manager, or you will deal directly with the
    "up" person.  The latter is much easier since this person knows what the
    dealer cost and profit requirement is, so there is an advantage in going
    to a large dealer using this system.  Expect to increase your offer, but
    do it in small increments, and don't do it often to give him the impression
    you have a firm offer.  I find it helpful to do this process at or near
    the closing time, to give him the gamble between getting additional but
    smaller profit for that day or hoping a bigger profit in the future.

I used this technique and got a very good deal on the MPV.  I got it at $2000
less than the lowest price the other 6 dealers offered.  The first time I came
to this dealer, I was impressed with their operation, and the salesman was
honest, quoting the price exactly with the discount they advertised.  I wasn't
going to buy the car then, so I made a very low offer.  His "up" talked to me
and he wasn't willing to lower the price by much.  I went to other dealers to
get my car appraised and check their low price of the MPV.  The first dealer's
appraisal was in the same ballpark and their price quote was still the lowest.
So I came back and was serious to buy.  I went there about one hour before
closing on a Monday night.  I did exactly what step 9 says, with the same
salesman I talked to the first time.  He was reluctant to go further with my
offer at first, but I seemed to be able to convince him my offer was reasonable.
He brought my offer and check to his "up", but this time the owner of the
dealer himself came back to me to bargain.  He took my car for a test drive and
came back in 10 minutes with a reasonable counter offer.  Going back and forth
a few times, I finally agreed with a price that is the dealer cost of the MPV
minus the NADA wholesale value of my car plus $500 profit for them.  This
amounts to $6000 trade in allowance from the MPV sticker price for my car that
is worth less than the $3200 NADA wholesale price.

>  My tactic will be as follows:
>  A-walk in wife and whenever salesman attempts to be overly
>    positive, have her say things like:
>    'Too much money'
>    'I like XXX better'
>    'I don't like this style'
>    'We can't afford it'

No need to become actor and actresses.  Just be firm on your offer.

>  B-Ask to see the wholesale price and discuss their profit.
>    Show them my view of the wholesale price.
>    Ask about incentives between the dealer and the
>    manufacturer.

Why should they reveal their dealer cost and profit to you?  If they do, how
do you know they are accurate?  If you are buying a shirt at Macy's, should
Macy's reveal the cost of the shirt and their markup?

>  D-Discuss financing, leasing options. This should make them
>    more flexible on the car price since they will hope to make
>    it up in the financing/leasing of the car.

If you intent to finance/lease, I would agree on the car price first and
then negotiate the financing/leasing option.  There are just too many variables
to play around such as the term, down payment, interest, etc. that could easily
hide the car price with a lower monthly payment.  I don't know about you, but
I cannot calculate all those variables during the bargaining process.

>    Ignore anything the salesman says like
>      'My manager won't sell the car at that price'

The salesman most likely doesn't know at what price the manager is willing to
sell the car that day, either.  So convince him your offer contains reasonable
profit for them.

>    Ignore anyone else who may try to 'close' the sale
>      at a higher price.

No.  It is to your advantage to deal with somebody that has the authority to
close the deal.  The salesman doesn't have this authority.  However, be pissed
of if you are refered to another "more experienced" salesman.

>Thanks in advance,
>
>Joe
>joec@morgan.com
>

You're welcome, let me know how it turns out.


-- 
Santa Wiryaman

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