Monday, April 22, 2013

Car Shopping Part 2.

Last week I wrote about the test drive experiences I had whilst looking around for a new car. This week I'm going to talk a bit about the actual buying process itself.
For our car, we ended up doing a custom build. Our local dealer did an inventory search across the country for us, and all the red and blue cars were too far away to make any economic sense to have them shipped to us. Plus they had extra bits and pieces and packages we didn't want or need. I don't want black, white or grey (or silver) - there's enough monochrome cars over here already. So the best option, realistically was a custom order.
You have to be patient if you're going to do this, especially if you're ordering from overseas. However that doesn't mean there isn't wiggle room on the price. Most dealers will try to tell you that when you do a custom order, you're paying MSRP or you're not getting the car. View this as the opening gambit, not the final price. It can be hard if you're a bad negotiator - I'm not the best in the world by any stretch of the imagination, but hold your ground, be polite and firm, and you will get a better deal.
The best thing to do is research the actual prices before you go near a dealer. In the US we have sites like - it's been a while since I looked in Europe but I suspect the same sort of sites are available there. With a price site like this, you choose the car you're interested in and add on all the options you want - paint colours, interior and exterior options - everything. It will then tell you what the actual dealer invoice is (rather than the one the dealer will show you), as well as any current incentives to the dealers for selling the vehicle. The incentives are typically unpublished bonuses paid to the dealers for selling particular vehicles. In addition, it will tell you what the holdback is (the amount the dealer gets paid by the manufacturer no matter what price you get the car for) and in most cases you will be able to see what other people in your area paid for the car you've specified.
Use this information - print it out and take it to the dealer with you. Don't throw it in their face, but refer to it when you start talking price. Again - be firm and polite. If you're arrogant ("Don't be stupid - I know exactly what this car should cost!") then you will be paying MSRP and that's all there is to it. In most cases, that attitude will get you a hefty add-on too - you might end up paying full sticker price.
What you have to do is find the balance between how much you think the dealer wants to make, and how much they think they want to make. You'll almost never get them to bottom-dollar but 9 times out of 10, you can get the price to come down. In my case, after a little negotiation, our custom build came down to $1,700 below MSRP. That's a nice deal for me, the dealership still makes good money off me, and everyone's happy.
Be cautious of hidden add-ons though. For example my dealer told me there'd be an additional $1,350 for a ClearBra that they "put on every vehicle as standard". I'm having a custom-built vehicle, so I told them that I don't want that put on my car. It's being built for me, not for the dealership, so they can't force that on me. Look out for other things like that - paint protection packages, upholstery protection packages - these are all high profit-margin items that the dealers will use to try to increase their bottom line and don't be fooled into thinking they're worth anything; if you ever try to claim, they'll fight you the whole way and the normal outcome is a lot of angst for no payout.
The same is true for non-factory-backed warranties. They really are not worth the paper they're written on. The aftermarket warranty companies are extremely clever at getting out of claims no matter how small. The only extended warranty that counts is a manufacturer-extended warranty (not a dealer-extended warranty).
Again - be firm and polite when it comes to the upsell, and you will get your way most time. The people you're talking to are humans just like you, with families to go home to. Treat them with respect and they'll remember you. Treat them like an ass and you'll pay for it forever.


Paul said...

There was a really good article I read some time ago about a reporter who went "undercover" to a couple of used car dealerships. One was a small "Mom and Pop" type of outfit, the other was a large franchise from memory.
The outcome was he was surprised that, on the whole, the salesmen were ordinary people trying to make ends meet just like everyone else. And that they could be put under tremendous pressure from management to meet goals, especially at the franchise dealership.

Paul said...

For those that are interested...