A trip to the dentist, a colonoscopy, or a car dealer walletectomy? These can be unpleasant ordeals, but every once and a while, the food hole needs to be cleaned and examined, the drain pipe needs to get checked, and the four-wheeled carcas in the driveway needs to get replaced. No one enjoys feeling exposed and defenseless, gripping the armrests of the dental chair, your head tilted back, your mouth opened wide; or on your side, naked, with your knees up to your chest, hoping for an extra milligram of Propofol. For many, the discomfort of dental work and the anxiety associated with prepping for the bio-roto-rooter pale in comparison to the agony of stepping onto a car dealer’s lot. Let's face it, few sensations are as universally displeasing as the feeling that someone has taken advantage of you. I can’t help with your dental distress or phospho-soda percolation, but the car deal is another story.
I love buying cars—researching the possibilities, narrowing down the choices, selecting the right model, and making the deal. Although I’ve bought and sold hundreds of cars, new car purchases are easier to discuss than used, so today we’ll stick with the shiny, perfect chariots, with window stickers and warranties and the satisfying (but potentially lethal) smells of fresh leather and plastics.
Don’t let the airbag recalls and ignition switch defects fool you, cars are built better today than ever before. Much better. They’re more dependable, more efficient, faster, and safer. So rest assured, even after ten years and 150,000 miles, there’s a good chance your next car’s airbags will still pop and save you when you crash. And you’ll get decent mileage right up to the airbag-popping event.
Want a good deal on a new car? Be honest; knowledgable; ready to commit; and, shop three days before the end of a month.
First thing, don’t lie. It makes you look silly and unprepared, and may invite the dealer to not take you seriously. The sales rep already knows if you can go to a different dealer and pay $1,000 less, just like your dentist knows if you floss regularly and your proctologist knows if you prepped as promised—stinky stuff being the obvious contra-indicator to all three. Until the late 50s, cars didn’t have window stickers (Monroney labels) and nearly every model had dozens of individual options, so a consumer couldn’t easily compare prices from dealer to dealer, even on the same model. Dealers could, and did, charge whatever price they wanted. Those days are long gone. Most cars today come in only a few trim levels, with just a handful of individual options, so you can compare exactly equipped vehicles, with exactly the same suggested retail price, from dealers all over your state or the entire country. But keep in mind, just like you know the suggested retail price, the sales rep knows the true cost. There is no reason to lie.
Research. Spend an hour or two on the internet before you step on a dealer’s lot. Dozens of internet sites and price guides reveal dealer invoice, providing good starting points, but don’t rely too much on these published figures. Regional add-on advertising charges and holdback rebates are not reflected in the guides, so the dealer may pay more or less than what the guides indicate. On common models, with heavy regional or national inventories (measured in days), manufacturers quietly provide cash incentives to dealers, so those models can sometimes be purchased under invoice (still allowing the consumer to receive rebates or discounted financing offers). On the other hand, high demand for limited-availability models can drive the price above the manufacturer’s suggested retail price.
Rather than focus on a published invoice figure that may not reflect the true dealer cost, just search broadly for how much dealers are asking. Look in your weekend paper and on eBay.com, autotrader.com, cars.com, and other auto buying sites. If an out-of-town dealer is advertising what you’re looking for at a discounted price, call to confirm availability and the details of the offer, then let your closest dealer match the discount on a similarly equipped vehicle. If they won't match it, make the deal on the phone with the first dealer and go for a ride.
Be ready to commit. A sales rep only gets paid if you buy. Spending two hours talking about a car and showing you a car doesn’t pay the mortgage. Just say, “I’ve seen every ad from Seattle to Atlanta. I’m ready to buy, but you have to sweeten the deal a little more than those other guys.” How can you expect to get a deal better than the best advertised prices you’ve seen? Unit based cash incentives directly to dealers.
Think of yourself as the straw that breaks the camel’s back. The ordinary profit or loss on your deal is not relevant if your transaction is the one that lets the dealer reach a threshold for a significant bonus directly from a manufacturer. By example, on top of all other bonuses and incentives, a manufacturer might tell a dealer that if they sell and deliver 200 units in a single month, they’ll get a $50,000 bonus. If your dealer is close to that 200 unit threshold, they really, really want to sell you a car, even if doing so results in a loss on your particular deal. The feeling is akin to counting cards at blackjack and realizing that the odds have just turned in your favor.
This brings us to the last tip. Wear good sneakers and be ready to leave. The dealer needs to sell the particular car that’s sitting there. You don’t need to buy it. You can take your money and move on. Despite the dealer’s overwhelming advantage of experience, the power of the deal is with your money. So, shop a few days before the end of the month, hammer as best you can, and either get your deal or go home. Don’t be surprised if your phone rings a day or two later. If it doesn’t, the dealer still needs to sell that car, and you still have your money. There's always next month.
