by xyst | 2025-06-30 13:50:21+00:00
In this modern age, the new vehicle markup at dealerships is completely unnecessary in the USA. Besides inflation, I would say this is a top contributor to the loss of <$25K vehicle.

The crappy experience I had with my last vehicle (~8 years ago):

1. Shop for rates on auto loans

2. Shop for particular brand/model of vehicle (online)

3. Once decided on brand/model, go to local "{{ random entity }} of {{ manufacture }}" dealership

4. Test drive the model you are interested in

5. Once decided you will continue with purchase, then you "start talking numbers"

6. Initial sales guy will always say something like "oh, this is the lowest we can go" (it was something like $5000 over MSRP for the model + options)

7. Then counter with some offer ("$500 + MSRP")

8. Sales guy does some pitch and tries to get you to budge. If you stand your ground here, he/she will "begrudgingly" go back to their manager to get approval

9. You may get approved, or not. But occasionally they will counter. Repeat 6-8 until settled on sales price (including tax, title fees). Known as the "out the door" price. One time I did have to "walk out" when sales person wouldn’t agree on price. Also they will employ as many high pressure sales tactics here as possible. Also best to keep your cards close to your chest, they will try to get you to use their in-house finance (big kickbacks for them). Have had success getting near MSRP by leading them on to thinking I would use their in-house financing.

10. They will now refer you to their finance guy to finish and finalize the paperwork. But it doesn’t stop there. That finance guy will try to load you up on as many unneeded services to pump the sales price. I’m talking extended warranty, gap insurance, paint protectors at significant dealership markup. Usually the GAP insurance isn’t too bad but have to go through process of hearing the pitch and declining each service. Then there is the junk fees such as "document fees" that range from $100-300.

11. Finally, after declining and accepting additional services. You come to the actual payment decision : in house or external financing? Usually, the sales guy would have already run your information through their financing backend to determine creditworthiness prior to financing guy so they have an idea where they can lose out on initial purchase price and recoup on kickback. Occasionally, the rates are better than what you can secure from your bank or credit union. But it’s very rare. It’s in their interest to get you to agree to an higher APR than what you really deserve. At this point, pop out the preapproval letter and compare the offers.

12. On rare occasion, they will try to pull back the deal but at this point it’s better to close and increase sales for month rather than dwell about one barely profitable transaction. Finally, the paperwork is signed.

All of this unnecessary back and forth when it can just be boiled down to a few steps at most.

1. Go to showroom (or online)

2. Browse basic models

3. Decide on options and put downpayment on car

4. (In 3-4 weeks) Deliver vehicle to home or preferred destination. Have it quickly inspected for any defects in transportation. Then deliver final payment and get your new car