I have owned over 40 cars in my life and purchased many of them new. So, I'm no stranger to the "process". When I bought my IS, I had a BMW 330i convertible as a trade. I knew the potential pitfalls of disclosing my intention to trade up front. Based on a couple of months of futility in trying to market the Bimmer on my own, I knew that I was getting sick and tired of the lowballers who never even saw the car, no-shows and broker calls. I had a pretty good feel for what the price would have to be to get the car sold.

So, I went into the dealer knowing what to expect out of my trade and knowing what I was willing to pay for the new (actually CPO) IS. My attitude was: (1) get me out of the Bimmer for a fair amount with no recourse (not always a slam dunk with private sales) and (2) put me in the IS for the amount I had budgeted.

The salesman and I started out almost $10k apart. I told him that was so far out of whack, we were wasting both of our time (and started to leave). He stopped me and assured me we would make a deal. I stayed and, eventually, he did. He worked for it (or at least made me believe he did).

I never knew whether he leveraged the trade to get my price (as Kalvano suggests) or had more room in the CPO IS (assuming they bought it very cheap). Whichever, I ended up getting within $500 of the price I had been asking for my Bimmer and a sale price on the IS for between trade-in and private party KBB price (including CPO warranty).

I must admit I did withhold my intention to finance the deal until I had a price. It so happens that Lexus Finance was running a promo on CPO cars. So, that worked out pretty well.

 

And if you want to do what's really wise, just make a private party sale and not involve a trade with a new car purchase.

 

You're exactly the kinda sucker the dealers love to see!

they whip out the 4 square worksheet, figure out which one you seem to care about, and make that one look really good.

it's a lot easier to hide where they're soaking you for extra profit that way.





Keep each item as simple and separate as possible.


How much new car A costs should have nothing to do with how much used car B is worth.

Then again, if you're -really- doing things right you aren't even going to the dealership before you have a price for the car already agreed on. Via email is best, so everything is in writing.


Then once you have that in hand you can show em your trade and see what they'll offer for it, and see if that number makes sense to you.

Without needing to mix that up with the new car purchase.




When I shopped for my IS350 I initially visited a local dealership in the area and my wife let slip I had a car I was getting rid of... and out came the sheet to "work the numbers" and they wasted an hour of my time... each time moving numbers around so that their profit didn't actually come down to anything close to reasonable, and pissing me off further each time.

First they had a price that was where I wanted, but the trade offer was insulting... then he went to talk to the used car manager and came back saying great news, we can give you what you want... and magically the price of the car on the worksheet had been jacked up, dollar for dollar, by the amount they added to the trade offer.

Luckily I wasn't financing, or they'd have made it even MORE confusing by throwing in "Well, we can get your monthly down to X" while jacking up some other number in the math.




Just think about it folks.

If their best price for the car is X

And their best price for your trade in is Y

There's no way they can change either number without sliding the other one around.

Keep it separate, and simple.

Anything else just gives the dealer a chance to song and dance you out of additional money.


(and yeah, you'll always do better private party with the old car, I certainly did, but some folks would prefer to lose some $ in the interest of speed)

 

Ok--but you are suggesting that a buyer come in and give you his or her "OTD" price right up front. If my OTD price is better than your "best price", you aren't going to correct me, are you? Of course not.
You start high, I start low, and we end up somewhere in the middle.

Buyers shouldn't have to apologize for not making your job easy. If the negotiation "pisses" you off, tell the buyers to take a hike, or go work at a "no hassle no haggle" dealer. And I'm with Kurtz--it it's only "a couple hundred dollars", and it's no big deal, why does the dealer end up with it? No big deal, right?

 

this only works if you have the value of your trade pegged perfectly. If you haven't, then (1) the dealer is going to jump at it because you are way off in the dealer's favor, or (2) the dealer is going to balk because you think your trade is worth way more than it really is.

 

Not if you know your bottom line.

 

it will depend on the area of th dealership. remember the lexus crowd usually has some kind of economic stability (I hope so) so dealreships might give you a discount but if they are located in hollywood or something like that they prally wont. go to the trashiest town near you and you might find better prices

 

You're talking about something entirely different. I am not talking about putting up with stupid BS like lowering one number and raising another.

I'm talking about actually negotiating. If any dealership tries to pull crap like that, immediately get up and walk out. That's BS and I wouldn't stand for it, or expect one of my customers to.

I am talking about looking at deal as a whole. If your ultimate goal is to be at $30K out the door, what does it matter how you get there? That's your goal, what you are ultimately comfortable with, and who cares if the new car is $40K and the trade is $10K, or the new car is $37K and the trade is $7K?

That's not playing with numbers to cheat someone, that's using all the resources to make a deal. I may not be able to sell the car for $37K, $40K may be the lowest price I can go on that, and the trade may only really be worth $8500, but if I can sell the car for $40K and talk the pre-owned manager into another $1500 on the trade, then that accomplishes your goal of $30K and still let's the dealership make whatever their minimum is on the new car. Hopefully, the pre-owned manager will be able to get his money and some profit out of the trade-in.

That's not cheating anyone, or moving numbers around to confuse anyone.

But now, if you have gotten your trade appraised at CarMax or something, and you think it's only worth, say, $9K, then you come into the dealership not willing to take anything less than $39K for the new car. You don't tell me you have a trade, and we get stuck at the price on the new car and you walk out. I never knew there was a trade, and I never had a chance to try and get $10K for it and put the deal together.

That's why it's bad advice. Tell the salesperson you have a trade, let them work the whole deal, and if they start trying to cheat the numbers, then get up and walk out.

 

I think too many of you are more concerned with trying to stick it to a dealer than buy a car.

Even before I started doing this job, I would research the car I wanted, research my trade, figure out what I think a fair price is and go to a dealership.

If they can meet my price and still make some money, good for them. Driving all over and sending emails and stressing over $250 simply was not and is not worth it to me.

But after doing this job, I can say with absolute certainty that not a single person has ever offered me a number that made the dealership a huge profit. Ever.

 

Here's where the basic disagreements are coming from. If, as a buyer, you walk in saying "once I hit $30,000 OTD" I'm done negotiating, then this strategy can work for you.

But--if you want to push for the best deal you can get, then it doesn't work so well. there are all different types of buyers and negotiators out there.

 

But, isn't that the nature of the beast??

And what is the greater % of buyers--those like you described above, who know all the facts when they walk in the door, or those that really are clueless about the process, and what they can get if they really try and negotiate (or just are so frutstrated or intimidated with it, that they'll take the first offer that sounds pretty good)? My money would be on the latter.

 

The only way there can be a basic disagreement like that is by thinking in advance that $30,000 is NOT the best deal you can get.

That says two things about you:

1.) You don't know your own bottom line going in. Your bottom line should be the price if you don't get, you don't buy.

2.) You're afraid to make an offer because if the dealer accepts it, it means you are paying too much.

Bottom line, you're not prepared.

 

I didn't drive all over the place. Apart from the one unpleasant visit I describe, which happened because I wanted to test drive the vehicle, I didn't set foot inside a dealership until I'd done all my emails and gotten a final price on the car.

I only stepped foot in the dealership at that point to pick the car up and give them a check for it.

Then again, I've never paid a significant amount over invoice for any car I've owned in 20 years of driving... so I'm probably not the customer you're really hoping to deal with.


I'm really a dream customer to a smart dealership though, I know exactly what I'm willing to pay, and I know exactly what I want, so they make a few hundred bucks profit for what is maybe an hour or two of paperwork for them tops.


Most dealerships seem to prefer the uninformed customer however who they can wear down with the worksheet, moving around numbers until the confused customer ends up paying considerably more than he should be.

And giving them more numbers to play with at a time makes that a lot easier for them.

YOU might not try to slide the numbers around- but nearly everyone else selling cars does. Apart from the many cars I've bought I've also gone with a lot of friends to help them on car purchases. In all that time and all those dealerships the only time I did NOT see a dealer try that worksheet BS was at a Saturn dealer, where they don't haggle at all, and no trade was involved. Even there they tried to sneak some extra $ in on the financing.


That's the -point- of the four square worksheet though. To be as confusing as possible about what you're actually paying.

Here's a good description of what they typically try, from a guy who went to work as a dealer just to find this kinda stuff out-

http://www.edmunds.com/advice/buying...2/page003.html

Here's another guy also explaining how he (a dealer) games the worksheet and why eliminating items from it benefits only the buyer. (hence have your financing already DONE before you talk to a dealer, even better ONLY negotiate the price of the new car)

http://consumerist.com/consumer/four...-it-248445.php

 

I know my bottom line, but why should I give money away if my bottom line is richer than it needs to be to make the deal happen?? The dealer isn't in the biz to give cars away for no profit, and I'm not here to overpay the dealer more profit than they should expect to receive.

I just don't see that logic to walking into the dealership with the mindset that I'm going to drop $30,000 as soon as the dealer hits that number.