The new car dance
November 4th, 2008 by KenricWith all this talk about the bad economy and how everyone is hurting, I tried to buy a new car last week. Buying a new car is not as fun as it used to be. I mentally set aside 2-3 hours and prepared myself for the song and dance of the new car negotiations. I casually drove into a Toyota dealer at 1pm on a Thursday afternoon.
As usual, I was met immediately by a sales person and I proceeded with the small talk. I was looking for a 2008 Toyota 4Runner. No matter how bad the economy is, a salesperson would never let you know. He’s not going to tell you that they are desperate or that they haven’t sold any cars. Instead, he will tell you that Toyota’s are great, they can’t keep them on the lot, gas prices dropped from $4.00 to $2.50 so SUV’s are back in style again.
I went for the test drive and sat down in the little office. Let the games begin!
This is MSRP, $35,000. It’s what you can buy the car for. Yes, seriously their first offer was MSRP! Well I certainly wasn’t paying MSRP so the negotiations began. “What would it take to get your business today?” I threw out my first number, $25,000. They said “No.” I love how they ask you to tell them a number and they say that they won’t be insulted, then when you say a number they act like you’re crazy. Truth was that I was ready to buy if they could have come close.
Back to the negotiations, let’s focus on payments. 0% financing for 36 months, 0.9% financing for 48 months, 1.9% financing for 60 months or $339/mo for 36 months lease, $2700 down, ~$15,000 residual. Or $2500 discount if I paid cash. So many numbers!!!
All of the above doesn’t matter if we can’t agree upon that actual price of the car. Car salesman love to talk in terms of monthly payments. The price always stays the same but the monthly payment changes all the time. The monthly payments went from $650 to $567 to $460 to $437 and finally to $339 when they pulled out the lease card. The problem was that the car price was the same for every payment option.
In the end, I asked #1, #3 and #4. That is the $2500 discount below invoice, 0.9% financing for 60 months. I believe that brought it down to around $28,000. I believe that they really tried to make the deal work. But in the end they let me walk away.
Posted in General | 4 Comments »
Stumble it!
I have found cars to be much more expensive in Arizona than in the Bay Area. Here the dealers advertise these at $6,000 off MSRP plus the 0 percent. You can do much better than that with a checkbook and some decent alternative financing in hand. The dealer knows you are there to buy and you will buy somewhere else if they are not reasonable.
I never discuss anything with the salesman except the price of the car. If they start the negotiations with payments or try to confuse the discussion, I politely thank them for their time and leave. I’m in the wrong dealership.
I bought the last car while I was having a major repair done on the old one. I casually walked from the service area into the showroom at 8:30 on a weekday morning. The sales manager had just arrived and was slipping into his office with a cup of coffee. I followed him in and made him an offer for one of the three on the lot that were the color and trim level I wanted. He knew I knew my prices and I had my checkbook. The negotiation took less than two minutes.
By Another Investor on Nov 4, 2008
Forget the 4-Runner. I saw a Sebring Silver NSX that was calling your name….!
By Allan on Nov 7, 2008
I remember those games. That must be the national pitch, “What would it take to get your business today?”. I called a dealership about a car about a week ago. I saw two ads with two different prices for it. I asked the dealer over the phone, “one ad says 7,800 the other says 7,000, which one is it?” He replied, “Are you paying cash or financing?”. Um…you answer first I thought…
By Cole with Low Insurance on Nov 19, 2008
Allan, I am a little shocked, but not suprised at the drop in prices for luxury cars. Just browsing a few forums I see people dropping their prices 10-15k since June 08.
By Kenric on Dec 16, 2008