I don't get "haggling" new car prices

[jumpjets]

'm 33 years old. I've bought my fair share of cars. Mostly used, but a few new cars. I've haggled and bargained when buying used cars, but I don't understand how to haggle for a new car.

I custom ordered my 2010 Chevy camaro SS in 2008, and took delivery in 2009. It was right in the beginning of the 5th gen camaro craze, when dealers were charging $10,000 markups, and people were paying them. I paid MSRP for my camaro. That seemed fair, since it was a very, very high demand car in the fall of 2009.

I bought a new 2009 ford focus in 09 as well. When I started "negotiations" the salesman threw out a price $3,000 below invoice, and then added on some incentives. I drove out of the dealer with a brand new car that I paid $13,500 for, including tax/tag/title, and the MSRP was $16,800. I didn't haggle. I just said OK. Did I get swindled? IDK.

I'm looking at a new 2016 ford fiesta now as a daily commuter car. The MSRP is $17,700. Once again, the salesman's starting price is low at $14,200. Truecar, KBB, USAA, etc, all say that the "fair market price" for this car is $15,500 with the options it has equipped.

How do I haggle with this guy? He's already cutting me a deal, right?

 

[WIMUSKY]

They're probably starting at their invoice price, which IS NOT what the dealer pay for it. Manufactures give dealers incentives. Their actual dealer cost is below what they show as invoice. They have to make money after-all. They'll get their money one way or another.... There's always more they can come down. You'll never see the "real" invoice. You can also haggle the price of the trade-in, if it applies. There's also a bunch of incentives out there for the buyer. Being a member of Sams Club is one that Chrysler has, if you're not a member they'll sign you up on the spot. Just make sure you ask about all the rebates and incentives to make sure they aren't holding anything back.....

 

[GA_Boater]

It would be a different case if you were buying a truck or SUV. It seems that all sales are down after a block buster summer, but small cars are not selling well.

It's end of year time, you can probably get some more off since a '16 is now last year's model.

This works - Find the car that suits your needs and has been on the lot the longest. The dealer has been paying interest since it arrived and they do like get rid of the ones that aren't selling and costing them.

 

[Scott Danforth]

your looking at a 2016 when 2017's are on the lot.....dicker away

you can find invoice pricing and incentives on the net. find a similarly priced car on the net somewhere in the US. take that price, offer it. if they say no, simply give them your phone number and walk away. you will get a call back in a week.

 

[angus63]

I have found that cars direct dot com is the best source for me to determine the going price for a vehicle in your region. I print out a copy of my research and bring it to multiple dealers before choosing and signing. You can also check dealer inventories and try to buy off the lot for even greater savings. Good luck.

 

[fhhuber]

Go in. offer 30% less than they say they want... Leave your name and phone number. WALK OUT.
They'll call you several times before giving a good price.... but they'll drop 20% to 30% on anything on the lot.

Get your financing from your bank, not the dealer. they make a LOT by talking payments instead of bottom line. They can lower the payment but increase the term and result in you paying 50% more total.

 

[SeaDooSam]

Go in. offer 30% less than they say they want... Leave your name and phone number. WALK OUT

This is THE way. Walk in give your price and your phone number most likely if it isn't insanely low they will take it because they will want the quick commission.

 

[gm280]

You know you've been take if you sign the deal. Regardless the price, if they are willing to let it go, you got taken. That IS their job. Add that "We are not making a penny on this deal" is pure junk. They are pros at selling cars while making you feel and think you got the better end of the deal. I mean think about it, if they make ZERO on any DEAL, as the love to say so may times, then how do they even keep the lights on, let along pay the secretaries, janitors and everybody else that are not out on the lot trying to make deals? So, if you like the deal and the vehicle, buy it. But seriously, don't think you got the better end of any deal when buying any vehicle. I hear a lot of people talk like they put one over on the dealer when they bought their car, but they just honestly don't know what incentives the manufactures gave them behind the scene. JMHO

Oh did I tell you how much a HATE buying any vehicle? Buying a new vehicle is absolute worst product you will ever buy and lose so much money on.

 

[MTboatguy]

The minimum dealer holdback on any car is 5% and they get a check for that at the beginning of the year from the manufacture for all cars sold in the previous year, that is on their base models, the upper end models can have much larger holdbacks on them depending on how they are equipped.

The best time of the year to buy if you can wait, is the week between Christmas and New Years, you will get your best deal during that time, because they are desperate to sell off their remaining inventory.

 

[aspeck]

WOW ... there is a LOT of misinformation in these answers. Buying a car is an emotional event ... some good emotions, some not so good. No one likes to part with money on something that is only going to go down in value. So, here are some FACTS.

1. Every dealer pays the same price for vehicles. One dealer doesn't get more of a discount than others.
2. There is a "hold-back" on the price of vehicles, but dealers don't like to count that. Why? Well, the dealer pays the invoice price for the vehicle. However, they know the amount of "hold-back" the car company holds and will pay back to the dealership at a later point (depends on the program the dealer is enrolled in whether they get the hold back once a year, quarterly, or monthly).
3. The dealer pays the invoice price for the car the day it is scheduled to be delivered. Most dealers use a finance company to pay the factory. They start paying interest on the car the day of scheduled delivery. However, the factory has different plans for how many "interest days" the dealer gets reimbursed. So if they get a month of "free interest" and sell it in a week, the dealership makes "free money." But if they have the vehicle on the lot for 3 months, that is a lot of interest they are paying and technically ups the cost of the vehicle (not to the consumer, but the dealer ... hold back is nice to cover this).
4. The average mark up on a car used to be 13% for lower priced vehicles and up to 28% for higher priced cars. Accessories were 18%. Dealer add-ons (fabric protectant, mud flaps, etc) are about 100% mark-up.
5. Factory incentives and rebates are confusing. Some are dealer incentives that you don't know about and others are consumer incentives that you should know about. A quick google search should let you know what incentives/type of incentives are available on each vehicle.
6. Sometimes a dealer will sell a car under invoice because they want to quite paying interest on it, they are in a contest, or they just want it off the lot so they are willing to cut into the hold back. Understand when they do this, they are out the money until they get their hold back monies.
7. If you approach a dealer/salesman as an adversary, you will have just that. But if you approach them as a friend with the goal of a win/win, you just might achieve what you are hoping for.

For the record, I grew up in a GM dealership ... 3 generations of ownership. When we sold the business I was sales manager/co-general manager. A lot has changed in the business in the 25 years since we sold the business, but I have continued to help some of our best customers. I have also been on the buyers end. I feel that I win each deal, but that the dealer is going to make some money and keep the doors open as well.

BTW, I have only ever bought 2 new vehicles ... one was a model year left over that I sold 6 years later for $3000 less than I paid for it and the other was one my father ordered and then passed away before it came it ... it was a sentimental purchase. All others purchased have been used. I prefer to let someone else take the new car depreciation.

 

[gm280]

aspeck,I have never sold cars from a dealership, but I have been a salesman in department stores that also sold furniture, appliances and even tires. So I know very well the mark-up of a lot of products. Not so much with vehicles, but certainly with near about any other product. But I also know the games some salespeople play with customers. So when I walk onto a car lot, I know exactly what the salesperson says as truth or crap. And there is nothing that will fire me up quicker than a known lie when purchasing anything from a salesperson. And that was why I am not a salesman ever againl. My early employment days, before I got into a professional STEM field, was varied from bag-boy, store-clerk, cashier, floor scrubber, salesman, lawn care, you name it. I have seen both sides of the selling industry and know the talk too many salespeople use to get customers to sign deals. I couldn't and still can't lie to folks like that and that is why I went to the tech fields for a career. Too many games some people use to sale things. JMHO

 

[aspeck]

gm, I will admit there are a LOT of salepeople who will tell you whatever you want to hear, whether it is true or not. There are a lot of jerks in the field that give others a bad name. But from a salepersons perspective, there are a lot of jerk customers that come in with a chip on their shoulder and get just what they are asking for. It goes both ways.

The customer has a duty to be well informed. Know the value of your vehicle if you are trading something in. Know the value of the vehicle you are buying. If trading in, don't be worried about the price of the vehicle you want to buy or the amount they give you for your vehicle, be worried about the difference ... with your homework you should know the values of both and the difference, plus a profit for the dealer, should be where you are on the final price.

 

[aspeck]

I remember a time when one person was being exceptionally hard nosed with me ... he was a realtor. I final said to him, you charge 6 % for a consignment item. The company gets 3% and the listing and selling agent split the other 3%. Will you let me make 6% even though I have money invested in the car where you don't in the house? He agreed and I showed him the price of the vehicle and the price less hold-back and asked which figure he wanted to go by. He said the invoice price understanding that I would be out the holdback money for at least 3 months. After we did the calculations he was paying me $800 more than my first price to him. He was mortified, but I offered to let him out of our agreement. He refused and paid me the higher price saying he didn't understand how we could pay our employees with profit margins like that. He was a great customer after that and we knew what he was paying each time he came in.

 

[southkogs]

I've not really had an issue haggling over price too often - though, I've only bought from dealerships 3 or 4 times. I typically go in with a general idea of what's a fair price for the car in question, and a specific idea of the deal I want on the table. I may not always get the best price, but I usually wind up with something reasonable and I get the car I want.

What has gotten me at dealerships is how little the salespeople know about cars. I've gotten very frustrated with them not being able to answer specific questions, and then wanting to get me locked into a buy before I know what I want to know. I start feeling like I'm selling them the product!

 

[WIMUSKY]

I've not really had an issue haggling over price too often - though, I've only bought from dealerships 3 or 4 times. I typically go in with a general idea of what's a fair price for the car in question, and a specific idea of the deal I want on the table. I may not always get the best price, but I usually wind up with something reasonable and I get the car I want.

What has gotten me at dealerships is how little the salespeople know about cars. I've gotten very frustrated with them not being able to answer specific questions, and then wanting to get me locked into a buy before I know what I want to know. I start feeling like I'm selling them the product!

x2 on the lack of knowledge of some sales people......

 

[gm280]

Here's a great question that seems so simple to fix. Why doesn't every car dealership, that buy their vehicles at the same price, offer their vehicles for the same one price. And that same price would be everywhere you would go? Then the dealers can compete solely on service after the sell. And every person would get the same vehicle at that same price as everyone else. No need to haggling for anything. The answer is, the dealer see an easy profit with some folks and stick it to them. Every person should get the same vehicle for the exact same price...period! If you really think about it, different prices on the same vehicle to different people could be seen as favoring one group or sex over others. And I think that is against the law if proven. JMHO

 

[bruceb58]

With car buying services that you can get quotes online, it's easy these days. Use a bunch of these to get an idea of what the going price is and then go to a dealer with those prices in mind to use a tool to bargain with.

Not sure how long ago Art's family had that dealership but things have changed since then. My brother is a used car dealer and runs online auctions and has ins with many new car dealers and there are incentives being done all the time for dealers that bring the cars below what the so called "cost" is.

 

[G_Hipster]

Too many fall for the "how much a month" routine with the salesman. Even in the finance office it's still a negotiation. 7 year financing, interest rates, extended warranties, add-ons,Gap insurance, etc. and end up upside down in the vehicle.

 

[WIMUSKY]

My brother is a used car dealer and runs online auctions and has ins with many new car dealers and there are incentives being done all the time for dealers that bring the cars below what the so called "cost" is.

Exactly my point....

 

[aspeck]

With car buying services that you can get quotes online, it's easy these days. Use a bunch of these to get an idea of what the going price is and then go to a dealer with those prices in mind to use a tool to bargain with.

Not sure how long ago Art's family had that dealership but things have changed since then. My brother is a used car dealer and runs online auctions and has ins with many new car dealers and there are incentives being done all the time for dealers that bring the cars below what the so called "cost" is.

See point #5.

Agree with the complaints of salesmen that do not know their product. Hate the finance selling also. One of the biggest laughs is when a customer would come and say, "I am paying cash, give me a better deal." The reality of that is that if the dealer arranges the financing, they get a percentage of your financing charges ... so it is more advantageous for the dealer for you to finance then pay cash ... dealer gets their cash immediately either way.