From: wrp@cyclops.micr.Virginia.EDU (Bill Pearson)
Subject: New car bargaining
Originator: wrp@cyclops.micr.Virginia.EDU
Organization: University of Virginia
Distribution: usa
Date: Sat, 2 Jan 1993 18:07:30 GMT

	Like many of us, I have read alot about how one should
negotiate for a new car price but felt very uncomfortable about the
process and wondered how much one could really save.  Several days ago
I purchased a 1992 Nissan Maxima SE for about $1500 less than the
"sales manager" initially asked, (the initial price was about $1000
below "invoice") so I have become a believer.  We ended up with
a car 6K under MSRP (and about 7.5K under the dealer price with
adjusted market value and rust/fabric treatment).

	We wanted a specific car, a 1992 Maxima SE 5-speed pearl-white
with or without antilock brakes.  The local dealer gave me the
impression that he did not have any '92 5-speed's so I called about 6
dealers in the Washington D.C.area.  I was able to find two Maxima SE
5-speeds under 18K - one pearl-white (a $350 list add-on) for 17.8K
and a beige for 17.4K.  Both had been advertised (perhaps as
loss-leaders) in the Washington Post for two weekends.  I also found a
dealer who had 2 ABS SE 5-speed's, one (white) that he thought he
could sell between 18.5 - 19K.  I also talked to several other sales
managers who said that their price on this car was 21K there was no
way that anyone could sell the cars for this price even with the
Nissan 2K rebate, and that those cheaper cars must be "acid rain cars"
or undesirable in some other way (buy backs, etc).

	We drove up and came into the last dealer's showroom about
5:00 on a raining evening, test drove the car, loved it, and began the
negotiation process.  He first explained that the 18.5 - 19K price was
good only on the white car, which we did not want, because it was
bought under a special dealer incentive program that dropped the price
1K.  The pearl-white ABS could not sell for much under 20K because it
did not have the extra rebate (and had better paint). We explained
that there was a pearl-white SE 5spd at another dealer for 17.8K and
that, having never owned a car with ABS, were not certain that we
wanted to pay extra for it, and that we certainly were unwilling to
pay extra and buy the wrong color car.

	We told the sales manager the name of the dealer who was
willing to sell us the car we wanted for 17.8K, and he called that
sales manager (ostensibly to perhaps get the car from him to sell to
us), and found out 1) that the car exists and 2) the dealer was
expecting a customer (us) to come see it, so he would not sell it to
the dealer sitting across from me.

	The sales manager calculated and calculated and calculated but
could not see how to come down below 19.5 for the pearl-white.
However, the price on the white ABS car dropped to 18.2 (it is now
6:30).  Our kids were getting tired of waiting, so we took them out to
the car.  Our sales manager took this as a sign that we were about to
drive to the other dealer and buy the car without ABS for 17.8K, came
out to the parking lot, and decided that it might be possible to
transfer the additional rebate from the car we did not want to the car
we did want and perhaps he could sell us that car for 18.7K.  I
wondered why, once the rebate was transfered, the pearl-white car
should not cost 18.2K, the salesman pleaded some need for something
(money), and offered us the car for 18.5K.  We took it. (7:00 PM)

	We then went down the street for fast food, but not without
reassuring the sales manager that we would in fact, be back to buy the
car.  It would seem that he was not losing so much money on the deal
that he wasn't concerned that we would might not take it.

	We love the car.

What we think we learned:

	1) If you are not in the car business, you have no idea how
much a car costs.  Invoice price is meaningless on a '92 model on
December 29, 1992.

	2) This kind of negotiation only takes place if the car is on
the lot.

	3) Always check with several dealers; it is more effective if
the competing dealer is nearby.

	4) No matter how much they tell you they can't lower the
price, they are lying (or perhaps telling the truth from only one
perspective).

	4) To be successful in the negotiation, the salesman must
believe that you have other viable alternatives, preferably
alternatives that are cheaper.  If we said that we could buy a Taurus
for less, that would not have convinced him - that is a very different
car. But by having exactly the same car (w/o ABS) at a lower price
(and also quoting prices on a V6 Camry LE with ABS at a true low
price), he knew we weren't bluffing.  We weren't.

	I am afraid that I will not have any faith in the initial
"discount" prices offered by dealers in the future, or believe
anything about the "losing money" or "absolute lowest price" claims.
Car salesman cannot tell the truth - it costs them too much money.
But if you want a good deal, you must be ready to leave.

Bill Pearson