Posted: 10/9/2005 10:49:59 AM EDT
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Ok, so I am new to the new car game, and I dont completely understand how everything works. I am looking at getting a car to replace my '90 honda accord that has 200k miles on it. Since I have never bought a car before, I dont understand how pricing works. In the course of my research I have come across three different "prices", MSRP, Dealer Price, and invoice. I know what they are but I dont understand how it works. Why the hell is the dealer asking more than the manufacturer? Usually in the retail world things are worth less than MSRP, not more. Say the car you are looking looking at has an MSRP of 17,300 for the options you want(power windows, locks, and ABS), the dealer is asking like 17,600, and yahoo autos says invoice for that car is like 15,900. If you try to haggle what can you expect to pay? Will they budge? What are the negotiating tactics? What are delivery & handling charges, are they bogus and will the dealer throw them out? Is there anythign I should know in the course of my research? |
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One should normally expect to get approximately 10% off of the window sticker price on a normal buy w/o a trade, IMO. If you get 12-15% off, so much the better for you. NEVER buy a car that has the little side add-on stickers from the dealers, they're pure profit, nothing else. Always buy on the last day of the month. You can shop beforehand, but buy on the last day. Dealers are a lot more flexiable on the last day. Be sure to ask about incentives & get everything in writing, take their word for nothing! Good luck! |
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There's 3 prices; 1. MSRP - the price on the sticker. 2. Dealer invoice - the price the dealer claims the dealer has paid for the vehicle. They have no problem showing you the invoice because it is not the true price they paid. 3. Hold-back - a hidden profit that the dealer makes. www.car-prices-costs.com/dealer-cost.html Formula for calculating dealer cost: Example: Base Invoice + the Invoice price of Options + Destination - Holdback = Total Dealer Cost What is Holdback? A hidden amount that manufacturers give back to a dealer. It is a percentage of the MSRP or the Invoice price. (See formula above for details.) |
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Most of all, keep in mind that there are dozens of car dealerships within an hour drive of whereever you live, and that you have NO OBLIGATION to buy a car from any one dealer, no matter how much they pressure you to do so. Don't be afraid to walk away (give them your cell # so they can call you back). Don't feel bad for them. ALSO, you could also consider buying from someplace like www.carsdirect.com, which is a totally no-haggle, no-hassle way of buying cars. I've bought 4 new vehicles through them for various family members, and it's been 100% pain-free, as well as getting better deals than the local dealers wanted to give me. -Troy |
This wouldn't be a good choice if one plans on keeping the car for a long time, IMO. Not to mention, you don't know how well the maintenance had been kept up? Some folks do an oil change at 3K, some at 30K & some in between. At only two years old, it's not had enough time to develop problems yet, IMO. As I say, this is if you're going to keep it 10 or more years, as I usually do. My .o2 |
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Edmunds will show you a "Total Market Value" for the car you're interested in. This TMV price will include your locale, paint color (can affect pricing), and options. It is respected by reputable dealers as a valid price negotiating tool. Another, similar website is CarPrices.com. Through these folks, you can actually purchase your car, similar to Troy's experiences. Good luck and do your research. 
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I work in the internet sales department at a GM dealership. Absolutely, positively, DO NOT buy a car without sending your information to the dealer online. This could be through the dealer's website, a manufacturer website like www.gmbuypower.com, or another site like Autotrader. This gets you in touch with the dealer's internet department, which is fiercely price competitive. Bring the printed quote with you, and don't buy a car other than the one you've been quoted on. That's the safest way to get a great deal on a new car. Feel free to IM me if you have questions. |
HUGE +1. Learn it, love it, live it. |
Or why the person got rid of the vehicle. For some cars, like soccer mom mini-vans, you can assume that the owner just wanted a new car even though it didn't make economic sense. For other cars, you'll get screwed more often than not. About 20 out of the last 24 trucks and vans I've bought used for work were complete junk. If someone has a good truck with low miles, they're not just going to sale it to buy a new one for no reason. When buying used, you can easily get something that can have dozens of problems. We sold as junk the last two 24-36 month-old Ford trucks we bought. They cost more to fix than they were worth, which is why the original owner got rid of them. Yes you pay a lot more for a new vehicle, but it's a lot less risk. Also, the state lemon laws protect you.z |