How to Negotiate When Buying a New Car

-Chris-

http://www.youtube.com/watch?v=pPor5b7JLLE


Thoughts/Comments?

copacetic

not bad but more applicable to the US or the UK market, not so much here until very recently. All my negotiations with Irish dealers involved discussing exactly how much they were going to shaft me on, no actual value was ever really on the table and Irish dealers always seemed quite happy to have you walk away rather than try and make a deal.

Maybe it's changed now but I don't think so, in my experience dealers here generally see everyone who walks in as a potential 'mark' rather than someone to make a decent deal with.

-Chris-

I think it's fairly interesting, I'd like to see more customers who have a solid understanding of what they want, how much it'll cost and how they're going to go about getting it.

It would make me have to work much harder, true enough, but I'm getting tired of having the same "it doesn't matter what you've seen your car advertised on the internet for, it's not actually worth that much" conversation over and over again.

If I were buying a car today, I'd do the following.
1) go the the bank with a monthly payment in mind, and find out what my max loan is.
2) find out what my trade-in is probably worth online, here for example
{I now have my overall budget}
3) pick my favorite make/model within that budget

I'd then go to three dealers. I'd go to the dealer I wanted to buy from first. I'd spend time with them and let them help me to find the exact car I wanted.
I'd go to two other dealers for competitive pricing, then I'd go back to the first dealer with that pricing. I'd pressurise them to match that pricing and I'd buy the car from them if they got close enough. If they couldn't, I'd go back to my second favorite dealer, safe in the knowledge that I know where the limit of the pricing is.


What frustrates me is when people think they know how much their car is worth, without doing any research on it; when people think I'm giving them crap pricing, but they won't go to a competitor to confirm their suspicions; or when people think I'll give them 10% discount because "the motor industry is on its knees at the moment".

A little research and a solid gameplan would make everything a lot more pleasant and productive for everyone.

copacetic

The big fault with that is that it assumes that there are good deals to be had any other dealers or that dealers of the same marque actually compete properly with each other. They don't. On my last 2 purchases I was offered the same deal in all dealers to within 1%. I did what you lay out there Chris and then gave up after 6-9 months of trying to get a halfway decent deal from dealers here and went to the UK and saved myself a fortune.

I think you are very unfair on people saying they are expecting the price they saw on the internet. These prices are the ones dealers are advertising, not some made up ones. I was offered 7k less for my car than a identical model was on offer on the forecourt of the main dealership for. No matter what way you swing it thats an attempt at sharp practise imo.

-Chris-

copacetic wrote: »

The big fault with that is that it assumes that there are good deals to be had any other dealers or that dealers of the same marque actually compete properly with each other. They don't. On my last 2 purchases I was offered the same deal in all dealers to within 1%. I did what you lay out there Chris

If all 3 dealer offered you roughly the same deal, then that must be the going price for your trade-in/cost of your new car.
There is no collusion between dealerships (afaik, anyway). If someone comes to me and has also been to a competitor, I'd never call that competitor to ask what pricing they discussed. Even if I did (and I wouldn't), I wouldn't expect them to tell me anyway.

If I go to 3 different shops looking for a dozen roses, and they all cost roughly the same, then the conclusion should be that that's what a dozen roses costs, rather that all the flower shops are in collusion and refuse to compete with each other.

Edit: re-reading this, I don't mean to sound patronising here, just trying to make the point.

copacetic wrote: »

and then gave up after 6-9 months of trying to get a halfway decent deal from dealers here and went to the UK and saved myself a fortune.

I don't think anyone should begrudge you of this, but a key component of the pricing advantage is the exchange rate.
I can buy a digital camera or a Nintendo Wii (or an Audi A4) for cheaper in the UK at the moment.

What I'd be interested in (and not specifically from you, from anyone who's gotten a better deal by personally importing) is whether you went through the same process - price with 3 dealers, bounce them off each other etc.
I'd say there's a lot of UK dealers giving ROI customers some pretty crappy discounts at the moment safe in the knowledge that, due to the current exchange rate, the customer feels they're getting a bargain no matter what pricing they're given.

copacetic wrote: »

I think you are very unfair on people saying they are expecting the price they saw on the internet. These prices are the ones dealers are advertising, not some made up ones. I was offered 7k less for my car than a identical model was on offer on the forecourt of the main dealership for. No matter what way you swing it thats an attempt at sharp practise imo.

There's loads of people, private and dealers, with overpriced cars on the internet. I'm not sure if it's delusion or what, I don't understand it personally.

What the cheapest car that's similar to yours is advertised for, or what the most recent car that's similar to yours actually sold for - that's the actual value of your car.

I often ask customers to list their trade-in on Carzone or similar, at the price they feel it's worth, to see how many phonecalls they get.
I don't know how many of them have the follow-through to actually do it, or if they just go home saying "I can't believe Chris offered me such a terrible price".

copacetic

AudiChris wrote: »

If all 3 dealer offered you roughly the same deal, then that must be the going price for your trade-in/cost of your new car.
There is no collusion between dealerships (afaik, anyway). If someone comes to me and has also been to a competitor, I'd never call that competitor to ask what pricing they discussed. Even if I did (and I wouldn't), I wouldn't expect them to tell me anyway.

If I go to 3 different shops looking for a dozen roses, and they all cost roughly the same, then the conclusion should be that that's what a dozen roses costs, rather that all the flower shops are in collusion and refuse to compete with each other.

Edit: re-reading this, I don't mean to sound patronising here, just trying to make the point.

I didn't say there was collusion Chris, just that there isn't real competition. None of the dealers want to undercut the others too much, perhaps its an unwritten rule.

On your dozen roses analogy, we all thought that was true then Aldi, Lidl, Tesco etc come along and offer a dozen roses at half the price all the flower shops do. Proper competition means better deals for consumers.

AudiChris wrote: »

I don't think anyone should begrudge you of this, but a key component of the pricing advantage is the exchange rate.
I can buy a digital camera or a Nintendo Wii (or an Audi A4) for cheaper in the UK at the moment.

What I'd be interested in (and not specifically from you, from anyone who's gotten a better deal by personally importing) is whether you went through the same process - price with 3 dealers, bounce them off each other etc.
I'd say there's a lot of UK dealers giving ROI customers some pretty crappy discounts at the moment safe in the knowledge that, due to the current exchange rate, the customer feels they're getting a bargain no matter what pricing they're given.

Of course, you will find some dealers unwilling to move much in the UK also. However the market there is much more fluid, demand slackens off dealers drop prices very quickly and they do it visibly on their websites. They hate to have cars sitting on the forecourts. The attitude here is more, keep the price at what it is for months and hope that eventually someone will stump up for it. The dealers here are always at least 2-3 months behind the market imo.

It took me 3 months to get the deal I wanted in the UK, including waiting for when exchange rate suited best. it was a bit of work but well worth it in the end.

AudiChris wrote: »

There's loads of people, private and dealers, with overpriced cars on the internet. I'm not sure if it's delusion or what, I don't understand it personally.

What the cheapest car that's similar to yours is advertised for, or what the most recent car that's similar to yours actually sold for - that's the actual value of your car.

I often ask customers to list their trade-in on Carzone or similar, at the price they feel it's worth, to see how many phonecalls they get.
I don't know how many of them have the follow-through to actually do it, or if they just go home saying "I can't believe Chris offered me such a terrible price".

I agree about the value of the car, my issue is that you and carzone may tell me that while you have a car out front for 7k more. Now that doesn't givenme confidence that the dealership is an honest one, I figure they are hoping to shaft someone and it may be me.

Not trying to get at you in paticular Chris but imo the car industry here has brought a lot of their troubles on themselves. They just have no credibility.

I mean look at them all importing cars now, 6 months ago every import was apparently a potential mindfield of salted rotten chassis and clocked odometer. Now all of a sudden they are perfectly fine. Nothing the car industry says has any weight imo and thats why consumers don't trust a word any salesman says to them. Everyone feels there is less than a 50/50 chance it is actually true.

paddydriver

AudiChris wrote: »

I think it's fairly interesting, I'd like to see more customers who have a solid understanding of what they want, how much it'll cost and how they're going to go about getting it.

It would make me have to work much harder, true enough, but I'm getting tired of having the same "it doesn't matter what you've seen your car advertised on the internet for, it's not actually worth that much" conversation over and over again.

If I were buying a car today, I'd do the following.
1) go the the bank with a monthly payment in mind, and find out what my max loan is.
2) find out what my trade-in is probably worth online, here for example
{I now have my overall budget}
3) pick my favorite make/model within that budget

I'd then go to three dealers. I'd go to the dealer I wanted to buy from first. I'd spend time with them and let them help me to find the exact car I wanted.
I'd go to two other dealers for competitive pricing, then I'd go back to the first dealer with that pricing. I'd pressurise them to match that pricing and I'd buy the car from them if they got close enough. If they couldn't, I'd go back to my second favorite dealer, safe in the knowledge that I know where the limit of the pricing is.


What frustrates me is when people think they know how much their car is worth, without doing any research on it; when people think I'm giving them crap pricing, but they won't go to a competitor to confirm their suspicions; or when people think I'll give them 10% discount because "the motor industry is on its knees at the moment".

A little research and a solid gameplan would make everything a lot more pleasant and productive for everyone.

Chris, I passed (what I think is) your place of work today when out for a cycle with the kids - wanted to check out the Ferrari graveyard too:D - and there are some nice prices on the Audi's out front but all are cloth interiors and I gotta have leather, even on the one's topping €40k!

I got a GTI from yourselves in 2006 and used the exact tactic as above and it worked. Have been back for all servicing since and in general I have been happy.

Have decided now though to broaden my shopping to UK and are collecting an S-Max next Friday. GTI is being kept though - and I am getting to have it full time now and wife is getting S-Max, so its happy days;)

mumblin deaf ro

copacetic wrote: »

On your dozen roses analogy, we all thought that was true then Aldi, Lidl, Tesco etc come along and offer a dozen roses at half the price all the flower shops do. Proper competition means better deals for consumers.

From years of buying flowers for mrs Ro, the supermarket ones die within a week; the florist ones can last up to a month.

Chris - it seems dealers are very coy about declaring the actual price for their cars and it makes the whole business of buying a car an antiquated pantomime. I'm not surprised when people buy ten Golfs in a row from the same dealer because they can't face the hassle. I'm nearly surprised that we don't have car brokers in this country to help people get rid of their cars and get them an upgrade at the best price. Things needn't be that complicated surely?

-Chris-

copacetic wrote: »

I didn't say there was collusion Chris, just that there isn't real competition. None of the dealers want to undercut the others too much, perhaps its an unwritten rule.

On your dozen roses analogy, we all thought that was true then Aldi, Lidl, Tesco etc come along and offer a dozen roses at half the price all the flower shops do. Proper competition means better deals for consumers.

Maybe we'll start to see more car supermarkets here as people become more price conscious. Can't be a bad thing...

copacetic wrote: »

Of course, you will find some dealers unwilling to move much in the UK also. However the market there is much more fluid, demand slackens off dealers drop prices very quickly and they do it visibly on their websites. They hate to have cars sitting on the forecourts. The attitude here is more, keep the price at what it is for months and hope that eventually someone will stump up for it. The dealers here are always at least 2-3 months behind the market imo.

copacetic wrote: »

I agree about the value of the car, my issue is that you and carzone may tell me that while you have a car out front for 7k more. Now that doesn't givenme confidence that the dealership is an honest one, I figure they are hoping to shaft someone and it may be me.

I'd think you were more correct with the first comment than the second one.
The UK market may be more prepared to move their pricing quickly to reflect the market, the Irish market is more afraid to change quickly.
I think it's more down to fear of change than opportunistic price-gouging though...

copacetic wrote: »

It took me 3 months to get the deal I wanted in the UK, including waiting for when exchange rate suited best. it was a bit of work but well worth it in the end.

Glad you got something you were happy with in the end.

copacetic wrote: »

Not trying to get at you in paticular Chris but imo the car industry here has brought a lot of their troubles on themselves. They just have no credibility.

I'm not taking any of this personally, most of us have never met each other, and I don't think any of the discussions here should become personal.

I know you and I have had dealings in the past, and while we may not have been able to agree on pricing, I hope that you felt you were dealt with fairly and with respect.
Pricing isn't my department, but product knowledge and general civility is well within my control.

copacetic wrote: »

I mean look at them all importing cars now, 6 months ago every import was apparently a potential mindfield of salted rotten chassis and clocked odometer. Now all of a sudden they are perfectly fine. Nothing the car industry says has any weight imo and thats why consumers don't trust a word any salesman says to them. Everyone feels there is less than a 50/50 chance it is actually true.

I personally have issues with this too - it's a big deal to flip-flop without going on record with a detailed reasoning for the change in heart. This is true whether you're a politician or a business.

paddydriver wrote: »

Chris, I passed (what I think is) your place of work today when out for a cycle with the kids - wanted to check out the Ferrari graveyard too:D - and there are some nice prices on the Audi's out front but all are cloth interiors and I gotta have leather, even on the one's topping €40k!

(Where I probably work) tends to put leather in A6 & above - A3 and A4 drivers don't always need leather, and those who do want leather in those cars want to customise the cars and get them as fresh orders rather than stock vehicles.

paddydriver wrote: »

I got a GTI from yourselves in 2006 and used the exact tactic as above and it worked...
...GTI is being kept though - and I am getting to have it full time now and wife is getting S-Max, so its happy days;)

Happy days indeed - I love the Mk5 GTI!

pcardin

Watch the wheler dealers on youtube. thats the way how to buy a car.