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Hi Gang,

Unfortunately my mom was recently in a car accident and her 2011 Subaru Forester with only 70k miles was totalled. Luckily my mom escaped major physical harm.

Now that she is starting to recover a bit mentally we discussed buying her another car. It will most likely be another Forester (helps to have in the Hudson Valley!)

I haven't bought a new car in a bit of time and so i wanted to get your input on a few items. I do understand certain dealerships/brands will have better deals but we are basically set on another Subaru.

1) MSRP Price- I came across a site recently that shows you the dealer invoice price for a car and i believe the rule of thumb is to offer between 3-8% above that.
2) My concern is we negotiate a good price but then get beat up on the back end. Dealer 'prep fees' are one thing i know you can negotiate. What's a reasonable price to pay on these?
3) What other items do i need to be mindful of when looking at the itemized list to ensure a good deal for us doesn't balloon up in costs and become a win for the dealer?

Thank you in advance!

Glad to hear your Mom is OK, accidents are scary but glad to hear she is doing fine.

Right now it's a bit of a sellers market - just like everything else there are supply chain issues, some factories were closed, and in general inventory is lower. You are also at somewhat of a disadvantage as time is not on your side and you need something soon.

Most dealers will immediately discount the buying advice you will find on the internet and many will have their own internet data to counter whatever you may find. I have purchased several vehicles over the past years, and most dealerships have "internet agents" that will give you pricing without ever setting foot in the door. Especially since you don't have a trade, there is ZERO reason for you to set foot on a dealership lot unless you want to test drive things. The strategy is to get you there, get you in the little room and not let you leave until you sign a deal.

As far as extra fees, the only thing you HAVE to pay for is the destination fee, the title and plates, and the tax. Everything else is negotiable and IMHO unnecessary. Be aware that there are generally 2 stages too - the first stage is you agreeing on a price with the regular sales person, and then you get sent into the "pit" to try and sell you all the extras. All of them are optional.

A friend takes the approach of assuming every sale can work like an internet sale, if necessary. He does his research, allows what he considers a fair margin, and walks in with an "Out the door" figure, prepared to walk out. He doesn't put up with the usual sales run-around. He tells the salesman upfront he gets ONE "I'll have to run it by my manager" visit, and if the answer from that visit isn't immediately positive, he will be leaving. Then if necessary he moves on to the next dealership.

As Scott noted, one place where things really go sour is the finance office. They generally consider themselves under no obligation to write the contract per the terms you agreed to. When you go in you need to know the total amount you should be paying, and exactly what that translates to per your interest rate and duration. It seems that an "incorrect" contract is often produced to see if you will fall for it. When you say - "BZZZT, wrong answer" they magically find their error.

Houblues wrote: ↑Tue Feb 23, 2021 5:58 pm As Scott noted, one place where things really go sour is the finance office. They generally consider themselves under no obligation to write the contract per the terms you agreed to. When you go in you need to know the total amount you should be paying, and exactly what that translates to per your interest rate and duration. It seems that an "incorrect" contract is often produced to see if you will fall for it. When you say - "BZZZT, wrong answer" they magically find their error.

Another trick to watch for is that they will give you a list of perhaps 4 options for an extended service agreement from "best" down to "basic". They don't tell you that there is a 5th option which is to not buy a service agreement at all. Another thing to remember about service agreements is that if you do decided to buy one, those prices are negotiable too. So if they tell you that package X is $2500, you can tell them you'll buy it for $1250.

The bottom line though is that the finance people are specifically trained to sell you on things you may or may not need. They do it all day long and are very good at it. They are some of the highest earning salespeople in fact, mostly because they have you captive and know you've already committed to a sale. I'ts not hard to talk someone into spending another couple of grand when they just dropped 30, 40, 50k on a shiny new vehicle, and they know it. Also watch for the trick where they add all the "extras" up and then give you the price as a monthly payment. Tell them to turn the computer around and show you on the screen the total cost of each item.

The last 2 vehicles I purchased I went directly to the sales manager. I got multiple quotes from multiple dealers, then the "best" price from the dealership I wanted to buy it from, and then took that directly to the sales manager. I found his phone number on their website and just called him directly. I simply said this is the vehicle I want, this is how much I will pay, and I will come and buy it today if you will sell it for X price, and he did.

I worked in auto sales and the finance office for a six months last year. It messed with my head, and I won't be going back. That's the kind of job that makes a guy want more than two drinks when he gets home. The above info is correct, don't be in a rush. take your time and analyze line by line.
watch for hidden items, like "security" or "anti-theft package" If you are going to spend extra, extended warranty is a good deal when purchasing new. The price never gets better. Watch the interest rate. Often a dealer can do better, but present it as possibly the best the banks can do.

The extras offered are usually quality items, like diamond kote paint finish etc... and do add positives to the ownership experience, but do you really need them? They can really add up.

Y'all are convincing me the Mazda dealer here is pretty good.
Every new car they sell goes off the lot with an extended warranty good for as long as you own the vehicle...on their dime!
Before you tell me it is bundled in, maybe so but I can buy from them for less than something comparable from the Toyota or Honda dealers
(without the extended warranty.)

Good points all. What I would add is get mom preaproved at her bank or better a credit union if she can join. Let the dealer assume you'll finance through them to get their best deal and if the price is right call your bank with the vin and save.

Last time I bought from a dealer, I already knew what I wanted to pay. I told the salesman that price and what I wanted for my trade-in. He kept me there a while pretending to negotiate on my behalf with his boss, each time saying he couldn't do it. So I told him "that's too bad, I liked the car" and left. I got a phone call within minutes of getting home saying they would accept my offer. They hate it when you know what you want and leave.

I sold cars for a living for 5 years 1st at a Lincoln/Mercury/Nissan, dealer then at a Ford dealership here are some pitfalls first with the salesman keep your mind on the fact that everything he/she says to you is trying to get info from you also most want how much you are planning to spend so they can point you to their selection and many times it' is a vehicle the dealership has had a hard time selling and will put a "Spiff" or bonus to move it the longer it stays the more they lose because most dealerships are on a floorplan and have to pay interest for every 30 days it sits on their lot . Remember no matter how friendly and caring The salesperson may seem the only thing they are interested in is the biggest commission they can get from every deal and yours is no exception. Also In the F&I office if they are financing anyway other than a special rate on a new vehicle from the manufacturer they make money on the rate they charge so many times you pay a higher rate than you are entitled to. They're is also money made with the extra insurance that is sold and it's substantial. the only insurance I would recommend is GAP INS it covers loss caused by depreciated value when an accident occurs. And although not popular with new car owners, a new vehicle loses 20 to 25% of their value when you drive off the lot. That's why I won't buy new and tell every one who ask don't buy new. There are other ways they make money off of you but I'll stop now.

Not sure if this applies to all states, but if you finance through the dealership they can tack on % to your rate. Say you're approved for 6%, but they might come back and tell you that you were approved at 9%. Some states limit how much more they can tack on.

https://www.washingtonpost.com/opinions ... play-fair/

If you're financing, get approved from a different lender before you go to the dealer. We just bought in Oct-Nov last year and I walked in preapproved by my bank at a lower rate than the dealer was even advertising. As soon as I showed them the prequalification, they offered me .05 points lower than the bank rate if I'd finance with them. I'm not are what they would have tried to sell me for financing, but I figure I saved $50-60/month.

Also, if you don't have to buy new, don't. We ended up with a 2018 SUV that was coming back off a lease with a whopping 22K miles on it (in 2+ years of driving), in excellent condition. That car lists new for 32K, we paid 21K. And it came with a 5 year/70K mile warranty.

I've bought more new cars than I'm proud to admit over the years, and always go in with a max price I'm willing to pay in mind. The first salesman you see is worthless, they're there to keep you busy, and make you think you're getting a good deal - the real salesman is the finance guy, like others have said. I'd suggest going Carvana or at least some other online seller instead of a regular dealer. I think that will be my next buy. They deliver the car to your home and most of the paperwork is done for you before they arrive. Then I think they give you a 30 day return policy (could be less, but still better than any physical dealer will offer).

I have bought extended warranties and service plans in the past, but only if they make sense. I typically stay away from extended warranties, and if your mom had a 2011 with only 70k miles, one probably isn't worth it, as it will probably expire before she gets to the mileage anyway. Like when I bought my Civic, I got the service plan that gave me 10 oil changes and routine maintenance trips for what worked out to be cheaper than going to a 15 minute place anyway.

Gap insurance is a very good idea, and I learned it the hard way. Your auto insurance company sometimes will offer Gap insurance, but you can always count on it either a) costing more than the dealer would have charged b)doesn't cover as high of a % above KBB value, or both. I've told the dealer no only to find out I could have saved money from them in the first place.

Other than Gap, I would suggest not buying any add ons. And be careful with some of the stuff on the window sticker. They will add on crap like etched VIN numbers on the windows and stuff saying its anti-theft. Some dealers will say it's already there, so you have to pay for it. Go to another dealer. Same for the scotch guard on the interior. Find a dealer that doesn't force you into buying that garbage. They'll charge $600 or more for interior protection that is nothing more than a $5 spray can application of same stuff you buy at Walmart.

fatjack wrote: ↑Tue Feb 23, 2021 8:10 pm Good points all. What I would add is get mom preaproved at her bank or better a credit union if she can join. Let the dealer assume you'll finance through them to get their best deal and if the price is right call your bank with the vin and save.

Having pre-approved financing in your pocket is a good idea. Having said that, if you know what you are doing you can sometimes take advantage of a better rate through the dealer as they can also get a kickback.

Bottom line for me is that in today's world, nearly everything you need to know about any particular vehicle can be found online. Inventory, window stickers, right down to the VIN of nearly every single vehicle sitting on every car lot in the USA is online right now. So you don't really need a dealer to help you find exactly what you want..autotrader does that for you. You really don't need the dealer for anything other than processing the final transaction and screwing on the plates.

Another fallacy you will hear is that if you don't buy something off the local lot that you won't get as good of service. That's not true at all, dealerships are reimbursed for any warranty work by the manufacturer regardless of where it came from. Most new cars include some initial maintenance too for a period of time, and same thing - any dealer that sells the brand you own gets reimbursed to do that work whether they sold it or not. And to go even further, most dealerships are reimbursed for their service work by the manufacturer based off the customer satisfaction surveys they send out. So it's very much in their interest to provide good service to anyone who walks in the door.

I used to work in sales too and appreciate that the people who work in the industry are doing their job as they have been trained to do, but as a consumer it's also fair to be just as calculated and informed. Walking out the door if you don't get the deal you want is perfectly acceptable, even after you get to the finance stage. If they will not agree to your terms, do not agree with theirs. Know exactly what you want, and tell them up front. They will then proceed to tell you that "We'll, it's part of my job that I have to at least give you these options" for all the extra stuff - and maybe it is but you don't need to listen. As @redman says, every move they make is calculated and planned to extract as much profit as they can.

@redman says, every move they make is calculated and planned to extract as much profit as they can.

VERY well said....

To add my 2 cents..
I bought my last vehicle from Enterprise rental Used car sales.
It was a positive experience.
I was skeptical about buying from a rental company but then thought...every car I rented was in tip top shape...

They keep up on oil changes and what-not.
If anything is wrong, it gets fixed because they dont want cars breaking down on the road.


The price of the car being purchased was no haggle.

There is wiggle room on the trade in.
They took my trade and gave my what I thought was a very fair deal.

They got me a very competitive finance rate as well..

Overall...a positive experience. Would buy that way again.
https://www.enterprisecarsales.com

Lots of good advice here, but one possible idea is to use an automotive consultant. Figure out what you want and let them deal with the dealer. The dealer can't take your keys and hide them if you aren't there....

Best part is they know all of the dealer tticks, and can point them out to you. Tom McParland, who writes for Jalopnik, runs Automatch consulting. Read a few of his columns (and the comments) to see what some dealers are willing to stoop to.

Last new car I bought, I used USAA car buying service.

Had an agreed upon price before I even walked in the door, already had my own financing. Had no bargaining to do whatsoever and I made out like a bandit because it was a brand new 2012 in 2014...then VW gave me a few loyalty bonuses, they bought back my car, and the AG of AZ sued VW as well so I got even more money from VW.

Basically was like a 2 year lease where I paid about $100/month while owning the car when all was said and done.

Loan was paid off and I put a good bit of money in my pocket to buy my old truck and some guitars.

Is there any benefit to paying cash outright versus saying you will take dealer offered financing, and then paying it off a month later?

My wife ordered a new vehicle back in December and it should be delivered this weekend. Since it was ordered we know the cost of the new vehicle,but the price of her trade is up in the air. I am going to take it to Carmax tomorrow to get their estimate so I have a baseline. Will the dealer give us more for the trade if we agree to their financing, or is it a mute point and it is what it is?

Thanks

Trading in a car is like trading in a guitar to GC or selling to them. You make more selling it yourself but you have to deal with the flakes, low ballers clowns and asshats yourself. Look up Bluebook best sell is low to mid retail trade you'll get maybe mid wholesale. Is the extra cash worth the hassle?

Floridian FX wrote: ↑Thu Feb 25, 2021 8:20 am Is there any benefit to paying cash outright versus saying you will take dealer offered financing, and then paying it off a month later?

My wife ordered a new vehicle back in December and it should be delivered this weekend. Since it was ordered we know the cost of the new vehicle,but the price of her trade is up in the air. I am going to take it to Carmax tomorrow to get their estimate so I have a baseline. Will the dealer give us more for the trade if we agree to their financing, or is it a mute point and it is what it is?

Thanks

You would have to check the terms and conditions of the contract. Some may specify a penalty if you do that. It is in their best interest (heh) for you to finance through them. Go in with your own financing secured before you look consider theirs.

As well, (with the caveat that I don't know your situation), if the rate you pay is low enough compared to what you could earn on that money via an investment, it is better in the long run to finance.

As fot the trade, depending on ehat kind of shape it is in, and what they offer, it may be better to sell privately. They will give you a wholesale price, minus whatever they can. Case in point: when my wife traded her 02 Sentra, she got $200. I sold her winter wheels and tire for $250. We could have got $1000 for the car easy, but didn't want the hassle.

fatjack wrote: ↑Thu Feb 25, 2021 2:55 pm Trading in a car is like trading in a guitar to GC or selling to them. You make more selling it yourself but you have to deal with the flakes, low ballers clowns and asshats yourself. Look up Bluebook best sell is low to mid retail trade you'll get maybe mid wholesale. Is the extra cash worth the hassle?

And in South Florida there is no shortage of flakes, low ballers clowns and asshats, which is why I have avoided buying used cars down here for the last 22 years. Usually I err on the side of less hassle, but it's her money so we will see how it goes.

You would have to check the terms and conditions of the contract. Some may specify a penalty if you do that. It is in their best interest (heh) for you to finance through them. Go in with your own financing secured before you look consider theirs.

As well, (with the caveat that I don't know your situation), if the rate you pay is low enough compared to what you could earn on that money via an investment, it is better in the long run to finance.

As fot the trade, depending on ehat kind of shape it is in, and what they offer, it may be better to sell privately. They will give you a wholesale price, minus whatever they can. Case in point: when my wife traded her 02 Sentra, she got $200. I sold her winter wheels and tire for $250. We could have got $1000 for the car easy, but didn't want the hassle.

Agreed. Every loan I have taken out on a vehicle I always made sure that I could pay it off early, because I really do not like making payments. Good point on the investing, I think they are offering pretty good rates for incentives right now, and I am sure she would qualify.

As for the trade, Carmax offered her $28k to buy, she was kinda hoping for $30k on the trade, which hopefully the dealer can match. Although, once that new vehicle is off the hauler and staring her in the face it might be a different story, lol. I know I may or may not have paid more than my set price on a couple guitars once I had them in my hands!

I found that offering offer online worked better than in person since its a internet sales person will take less comish than an actual salesman, took me 13 dealers all online before i bought a new toyota tundra and it was an all cash deal. my local dealers were a rip off and they didnt care about the price i got 2 hours away for less money with more options which i bought. You can beat up the internet salesman all you want and get a better deal imo since they work on less comish than an actual floor salesman.
My local toyota dealer was good till the end last moment to sigh paperwork to sign off to buy truck and they said we have a 1500.00 new car fee, which no other dealer anywhere had . I laughed and said bye and they said bye on a 40k cash deal, there loss but like all total bs car salesman its there job to rip you off as much as possible lol. Theres always a cheaper deal out there maybe 2-3 hours away but worth it to save 1000's.

Trade in is total bs worse than guitar center really! offered me 500 on a mitsubishi endeavor suv with 125k miles in dam near perfect shape ,i sold it for 4000 weeks later, dealer is worse than pawn shops on trade in usually.

Speaking of getting a deal at a distance - Don't be afraid to ship or travel. Sometimes there are dealers who routinely make good enough deals that it pays to have the vehicle shipped to you, or to travel to pick it up.

When I was looking to buy an '03 Tacoma, I found the regional distributor did not bring in the option combinations I wanted, and I couldn't get any dealers to order one (or perhaps the region wouldn't cooperate). At any rate, the vehicle I wanted couldn't be obtained locally. On the forum I was using to pre-educate myself, there was a saleswoman at a dealer near the Fremont plant who was well known for making good deals, and would order any configuration you could dream up. I had given a credit card deposit to a local dealer, but when he wasn't cooperating I contacted her. She said - Sure, I can do that. A week later she told me she had ordered two to my specs, which would be delivered in a couple of weeks. Two weeks later she sent me pictures and VIN numbers and asked if I wanted one. They had a favorite shipper, which would run me about $700. The total would still be less than I would pay locally for a truck I didn't want. I went for it, and it was an easy transaction.

My last purchase was a Chevy Colorado. I again learned on a message board of a dealer in St. Louis who specialized in high volume, low margin, no haggle sales on the GMC version of the vehicle. Although I was set on the Chevy version, people raved over the prices and regularly flew in from all over the country. They came in, were picked up at the airport, spent an hour doing paperwork, and were on the road.

Floridian FX wrote: ↑Thu Feb 25, 2021 8:20 am Is there any benefit to paying cash outright versus saying you will take dealer offered financing, and then paying it off a month later?

My wife ordered a new vehicle back in December and it should be delivered this weekend. Since it was ordered we know the cost of the new vehicle,but the price of her trade is up in the air. I am going to take it to Carmax tomorrow to get their estimate so I have a baseline. Will the dealer give us more for the trade if we agree to their financing, or is it a mute point and it is what it is?

Thanks

Trading in offers the benefit of reducing the tax you pay on the car and lowers the financed amount at the same time. Sometimes they will increase the amount of the trade to sweeten the deal, or at least make it seem that way. Instead of giving you more off the price of the car they give you more on the trade at least the couple new cars I have gone through buying with my wife.

Sometimes selling is better like if you have a car that is worth more than blue book like when I sold my Mustang after buying my Golf. I got $4500 for it when the dealer wouldn't give me over $2k for it. the difference even when accounting for the financed money/tax savings wasn't enough to scare me off from selling private party. I sold my car in less than 2 days to the 1st guy who called, but most people looking at a 14 year old Mustang with some performance upgrades are a certain type of person unlike when selling a regular car.

Buying a new car with a trade in is 2 car deals. The problem is most folks treat it as one. They get tripped up. Also don't get in to an argument over whether the price came off Kelly Blue Book, Edwards or their Uncle's A**. And most importantly...this is key. Don't be in a hurry. Be flexible and don't sit and wait for a deal. Have them email it to you. They hate doing that but just tell them "nicely" you don't have time unfortunately but you are looking forward to them meeting your price to close the deal.

The last deal I did, I set the terms in my mind, what I would take for my trade in and what I would give for the new (barely used) truck. I did not dicker around. When I found the right truck, I gave them the terms I would do and said take it or leave it. I have given myself a $1000 cushion. The guy came back within a counter within $500 or what I offered and I shook his hand. That is the short version of the story. I had to visit many Toyota dealers in the bay area before the aforementioned experience occurred and they all were nightmares to deal with. Several could not even tell me how much the truck cost, even if I wanted to write a check. One sales guy told me he did not know the price of a truck I was looking at and if other sales person there told me a price they would be lying. Several trucks were listed on line for $X.XX and it was the right price but when I got there it was not the price. One would think that is some type of shadiness but I was actually told that somewhere on that website ad there would be some "small print" relieving them from that advertised price. It was an unbelievable experience. I month earlier my wife and walked into a Lexus dealer to buy her a car and it was fantastic. Not BS just straight up negotiations like adults. Night and day between dealerships. Find a normal one, seems to be about 1 in 10.