Dealers... Seriously, guys??

I go new-car shopping on Sunday. The dealers in Nevada are closed, and it's a good way to walk the lot without being bothered.

I pretty much understand the dealer model. They try to make as much profit as they can - I get that. I also get that they are independent businesses that are beyond the control of the manufacturer.

At the Dodge/Ram/Chrysler/Jeep lot, every vehicle has an ADM sticker. They aren't even trying to pass it off as a $1000 window tint job, either - the label simply says "Market Value Adjustment". You want a $17,995 Dart? It comes with a $3,995 "Market Value Adjustment". What market, precisely, values a Dart at 22% OVER MSRP? These "adjustments" range from $1,000 to $6,000 above MSRP.

Let's head across the street to the Toyota dealer, shall we? Did you know the FJ Cruiser is in it's final year of production? This dealer does, so each FJ carries a $2,900 "Last Year of Production" ADM sticker. Everything else on the lot has at least $700 in ADM.

I get that all of this stuff is negotiable. However, any negotiations should be in good faith. I don't have any good faith in any of these ripoff dealers.

I think I'll buy my next new car online.

Just deal with the internet sales manager. It takes ten minutes to send out all the emails and you know who is worth dealing with.

What's "not in good faith" about being upfront about asking for money above MSRP? They bought the cars from the manufacturer, they can ask any price they want when selling them. They may well net out losing money by turning away more buyers than those who actually pay the excessive initial asking price, but that's just a bad business decision -- there's nothing dishonest about it.

I agree about the internet sales manager.

codrus wrote: What's "not in good faith" about being upfront about asking for money above MSRP? They bought the cars from the manufacturer, they can ask any price they want when selling them. They may well net out losing money by turning away more buyers than those who actually pay the excessive initial asking price, but that's just a bad business decision -- there's nothing dishonest about it. I agree about the internet sales manager.

You are correct. "In good faith" was not the right phrase. All I meant to say is that if the dealer wishes to begin the negotiations from such a ridiculous proposition as 22% over sticker, I would be unwilling to even begin negotiations with them.

More power to them for having the stones to try. I just won't be doing business with them.

start at 22% below sticker?

The Kenosha, Wisconsin Honda dealer had an Accord Coupe, 6 cylinder, 6-speed with every Honda option and extra HFP options with a $43,500 sticker on it. I know the game of loading up the price to come down with a "HUGE" discount.

Sweet car but $43,500 for an Accord?

Dealer tactics are only a problem if you let them be a problem.

For me, there are only two factors that matter…what is the average price people are paying for the car and what is the car worth to me.

I use the Edmonds.com site to get the fake average selling price (they’re in collusion with the dealerships to drive up prices but the level of exaggeration is pretty constant so you can easily apply a multiple to approximate a reasonable estimate…I use 0.985).

Next, just apply your multiple to the Edmonds numbers for the cars you’re interested in and determine which one is best for you. Now, you’re ready to deal. You walk in and undercut your number by a few percent to test the possibility that they’re desperate but in no case do you pay one penny over your number.

For example, you determine that Edmonds says $30,000 so you estimate that the real average selling price is $29,550 so you offer $28,700 and go from there but in no case what so ever do you ever, ever, ever, go one penny over $29,550.

RX Reven' wrote: Dealer tactics are only a problem if you let them be a problem.

This!

It's really not that difficult. Once you figure out exactly what you want, and exactly what a reasonable price to pay for it is, print out the details, go to the dealer, and tell them that this is what you want, this is what you want to pay, and you're going to buy from the first dealer that will meet that price. When the dealer comes back and says, "Well... we can't do that, but..." cut them off, thank him/her politely for their time, and walk. You will eventually find a dealer that appreciates that they're about to make a small profit for less than an hour's worth of work, and the deal will be done. Easy peasy.

Box_of_Rocks wrote:

RX Reven' wrote: Dealer tactics are only a problem if you let them be a problem.

This! It's really not that difficult. Once you figure out exactly what you want, and exactly what a reasonable price to pay for it is, print out the details, go to the dealer, and tell them that this is what you want, this is what you want to pay, and you're going to buy from the first dealer that will meet that price. When the dealer comes back and says, "Well... we can't do that, but..." cut them off, thank him/her politely for their time, and walk. You will eventually find a dealer that appreciates that they're about to make a small profit for less than an hour's worth of work, and the deal will be done. Easy peasy.

^ This...it's not rocket science, just leave the emotion at the door and you'l be fine.

Anyone in the industry that can tell me about "invoice" price? This has become all the rage, that you can go in and buy a car below invoice. Now, I'm no financial genius, but I do know that if you routinely sell items below what you pay for those items, you will be out of business quickly. So I have to assume that "invoice" is just a new word for MSRP, it gives dealers some arbitrary number that they can start with to negotiate and make you feel good. I mean, do you really think that the manufacturers would publish what a dealer pays for a car? What other business on earth openly publishes the cost of a product? Their dealers would tar and feather them! Even with incentives, why would a dealer agree to loose money on a car just because the mfg. is giving away some money as well? The whole thing is shady and stupid.

RX Reven' wrote:

Box_of_Rocks wrote:

RX Reven' wrote: Dealer tactics are only a problem if you let them be a problem.

This! It's really not that difficult. Once you figure out exactly what you want, and exactly what a reasonable price to pay for it is, print out the details, go to the dealer, and tell them that this is what you want, this is what you want to pay, and you're going to buy from the first dealer that will meet that price. When the dealer comes back and says, "Well... we can't do that, but..." cut them off, thank him/her politely for their time, and walk. You will eventually find a dealer that appreciates that they're about to make a small profit for less than an hour's worth of work, and the deal will be done. Easy peasy.

^ This...it's not rocket science, just leave the emotion at the door and you'l be fine.

try doing it online, and start a little lower than what you want to pay. it saves time. i used the autotrader chat to get a sales contact at the dealer that had the specific truck that i wanted. i made my offer of X out the door(substantially less than it was listed at, and a grand under what i figured my max would be) and they countered with X + $500. X + $500 is less than X + 1000, so i was happy there.

patgizz wrote:

RX Reven' wrote:

Box_of_Rocks wrote:

RX Reven' wrote: Dealer tactics are only a problem if you let them be a problem.

This! It's really not that difficult. Once you figure out exactly what you want, and exactly what a reasonable price to pay for it is, print out the details, go to the dealer, and tell them that this is what you want, this is what you want to pay, and you're going to buy from the first dealer that will meet that price. When the dealer comes back and says, "Well... we can't do that, but..." cut them off, thank him/her politely for their time, and walk. You will eventually find a dealer that appreciates that they're about to make a small profit for less than an hour's worth of work, and the deal will be done. Easy peasy.

^ This...it's not rocket science, just leave the emotion at the door and you'l be fine.

try doing it online, and start a little lower than what you want to pay. it saves time. i used the autotrader chat to get a sales contact at the dealer that had the specific truck that i wanted. i made my offer of X out the door(substantially less than it was listed at, and a grand under what i figured my max would be) and they countered with X + $500. X + $500 is less than X + 1000, so i was happy there.

I've had less than stellar luck with the online angle. I've had more than one dealer send emails of "Oh yeah, no problem, we can do that deal" and then when you show up in person the vehicle isn't in stock, or was magically sold just hours before I got there, etc.

I've found that showing up in person with my checkbook in hand conveys a bit more seriousness in my willingness to buy. But then again, I don't mind shopping for cars and will spend an afternoon going to 3-4 dealers if needed.

I would imagine that dealers consider cars a loss leader to a certain extent. The parts/service and financing is where the money seems to be. That with the fact they need to move X number of units per month or year or what ever means they can take a loss on a car if the sales goal is worth more to them than the hit on the car.

Heck, even the local Harley dealer seems to (want to) charge a "Market Value Adjustment". They were pretty miffed when I told them that I don't buy vehicles above MSRP.

Same deal with the Evo, the dealer "adjusted" the market value another three grand up, I suggested we take that off and then we start talking, which turned out to work out OK. I probably would have shopped the Evo online if I hadn't wanted to drive one first, though.

I had some dealers try and pull that crap when we were shopping for a new TDi Jetta in '09, none available in the US in '07-'08, so a lot of dealers thought the new Common Rail was worth gouging. I contacted every dealer within a 300 mile radius via phone and email. I did my research, knew what I wanted, what it should cost, and what I was willing to pay. I had a handful of dealers flat out tell me I'd never get a new TDi Jetta for MSRP or less, and that they, "never sell one with less than $2K MVA." One actually laughed at me when I told them what I was willing to pay.

When we bought the car, with more/better features, than we had originally been shopping for at $400 below our goal, I sent the dealer that laughed at me a lovely email. Didn't accomplish anything with that email, but made me feel better.

It took work, I didn't go to any one dealer and say, "this is what I'll pay, give me what I want," and magically walk away with a new car. I had to weed through the dealers and find the ones actually willing to work with us, and basically got a few dealers into a bidding war for our business.

• Lee

In reply to bigdaddylee82:

You sir know how to haggle......unlike the masses of this country.

They're even doing the MVA crap on used vehicles....

yamaha wrote: In reply to bigdaddylee82: You sir know how to haggle......unlike the masses of this country. They're even doing the MVA crap on used vehicles....

MVA on used vehicles? That's pretty funny.

I hate haggling. So I only look at things I'm willing to pay the asking price for.

"Invoice price" is just the wholesale version of MSRP. There is no guarantee at all that the dealer paid "invoice" for the car - they get manufacturer rebates as well, called "holdbacks" to give them room to move, as well as to stimulate wholesale sales.

All of this is truly horse $hit. You don't haggle over rice krispies at the store. Why should you have to haggle with a middle man over the price of a car?

I'm with Keith. I don't like haggling. You can and should expect to be able to buy a car without having to jump through hoops with a dealer.

You don't ever have to haggle. You're always welcome to pay sticker price, no questions asked. Feel free to do so at your convenience.

A car is not Rice Krispies. A supermarket makes an extremely small profit margin on a given box of cereal - a few cents at most. However, a box of cereal represents a very small capital investment for them, and the ROI is high because they will cycle that investment through the order/inventory/sell process dozens if not hundreds of times per week.

A car, on the other hand, represents a very large amount of capital that could potentially be tied up for a very long time. Therefore the ROI is in danger of being quite small.

While I don't condone anything unethical or deliberately misleading, I don't blame car dealerships at all for trying to make as much as they can on each unit sold.

In reply to Xceler8x:

Your viewpoint is a distinctly north american one.......pretty much the rest of the world is opposite.

In reply to Keith Tanner:

And its the local Kia dealership with theused car MVA's......the funniest thing is they buy a bunch of beat up but sub 5yo used cars at auction, slap a massive MVA on them, then use them to make people think they can't afford anything other than a new kia.....they're so bold even that their entire roadside front is filled with other manufacturers used cars. They had a '11 v6 mustang(with 63k miles) there awhile back marked at $23k on the sticker(that's more than this one was new)

I think what irks most of us is the not knowing. If I buy a car and walk away wondering if the dealer is dancing a jig over the shafting he just gave me I feel bad about the whole experience. If they would be more transparent about it and admit that they are making X dollars on me we can negotiate over what we each feel is a reasonable amount for the dealer to make.
I spent a few miserable months back in the '90s selling new cars and HATED it. Sort of like the worst part of buying a car repeated every day.

That's why you do some research and figure out what YOU are willing to pay. Pay that amount or less and then don't look back.

They all need your money more than you need any one particular car. Keep that in mind and your stress level will be cut in half.

The last new car I bought (which was the second new car I bought), I walked in with a big fleet discount and a fixed price. No bargaining, not a very happy dealer because his price was fixed and I didn't want the add-ons. I even arranged for my own Line-X after they didn't get it booked quickly enough, and they lowballed me so hard on my trade-in that I sold it privately instead for about double the amount. Then I took the only 6-speed truck they had on the lot and drove away

I don't know if I could even go into a Ford dealership, where F150s are $10,000 off every day of the week. I mean, how can you take them seriously?

Duke wrote: That's why you do some research and figure out what **YOU are willing to pay. ** Pay that amount or less and then don't look back. They all need your money more than you need any one particular car. Keep that in mind and your stress level will be cut in half.

This is very true. The days of haggling with a dealer are coming to a close imo. The last three cars I bought retail I didn't haggle on. Two were from Carmax and priced below or competitive with other local offerings for the same car. The other was from Bill Britt Mazda where they have a flat price/no haggle environment. Their prices are competitive with other dealerships that force you to negotiate.

No one likes that type of interaction anymore. It will end eventually.