How to buy a new car, PhWF (FWF) style



  • Note: I am not the OP, I found the OP by using the Wayback Machine @ https://web.archive.org/web/20171009055504/http://www.fatwallet.com/forums/finance/1001920/

    This topic comes up a lot, and there are different approaches to accomplish the same goal. I buy a lot of cars, and handle those transactions for my extended family and friends. In doing so, I consider the ROI of the time necessary to do this. So, throughout the years I have streamlined this process. Some deals I have even done without ever going to the dealership, and having the cars delivered straight to my house.

    1. First and foremost is to do your research. You need to know exactly what you want, and what you’re willing to spend. As you all know, the Internet is a very valuable tool. So use it to your advantage, go to Edmunds.com, enthusiast forums of the car(s) you like, and find out the dealers cost (don’t forget hold back, this varies between mfg’s), incentive’s, etc. Many dealers will advertise silly deals when in fact these are mfg incentive’s that you can see just by doing the research. Ie: trade in an older model car of the same mfg and get $2,000 for “loyalty”.

    2. Select the exact car, and model you want. Unlike some advice given elsewhere, PICK the color and features you want, exactly. Let’s face it, if you’re buying a new car… you need to get what you want. Don’t sacrifice unless it’s for financial reasons and you do not want to spend the money on upgraded features.

    3. If you must go to a dealership and test drive car(s), then do so quickly. First look up the dealership, find out who does Internet or fleet sales. If they don’t have these department’s and they’re a small dealership, go straight to the owner, or the owner’s son or family member who would then handle sales. Tell them you have no intention of wasting their time, but you are interested in a certain MODEL (don’t get into details or attachments of a specific car on that lot) and say you’d like to drive that car (don’t worry about every creature comfort, just the model car… hopefully same engine you want, stick/auto, etc) and then ask for their business card and that you will contact them soon. Do NOT discuss competitive cars, features, financing, etc. If he insists on riding with you in the test drive, just change the subject and discuss personal interests of his. Ie: if you saw in his office that he has a bunch or horse pictures, then talk about horses. But after that’s done. Thank him for his time, tell him you will be in contact and leave quickly.

    4. Once you have selected the exact car details, decide on your financial situation. If you are paying cash, know your OUT THE DOOR limit price. If you are financing, then figure this out first. For example, many mfg’s offer great financing incentive’s such as 0% APR for 36-months (or even 60-months nowadays it seems is not all that unusual), but for those regular financing deals then secure your own financing from someone like capital one auto finance so you do your deal as a CASH deal (capital one gives you a blank check, with a preapproved credit limit). If you’re financing through the dealership, know your FICO score and financial ability. You have to know you can afford this car before moving forward.

    5. Now that you have done your homework, you need to compile the list of dealers! This can be quick, or it can be time consuming. The mfg of the car, the dealerships systems/websites, radius, etc will effect this. I never go less than 50 miles, but I have gone as far as 1,000 miles when including people in my list. When I purchased a Corvette I made it a point to include the largest dealership on this side of the country because I knew volume meant discount. They had more room to move on price than my local dealerships who barely ever moved Corvettes. At the end of the deal, the car was delivered to my front door in an enclosed trailer from nearly 1,000 miles away cheaper than any closer dealer could do it without shipping costs. When you’re dealing with specialty or high-end vehicles the cost difference could very well be enough to justify the shipping, or your travel expenses in picking up the car. If a car costs $40K+, you want to take this into consideration. Then you have things like European delivery on European cars. You can go to Europe, flights on the mfg, a hotel room for a night, and a reduced cost on the car, drive your car around Europe for a while, get a tour of the facility in Germany, then they ship your car back home for less then the cost you could buy it new without that option.

    6. Once you have compiled your list, you will probably have some time. Why? You want to wait until the last week of the month, or even the last week of the quarter if possible (no incentive’s expiring, running out of last years models, etc). Now this is where you will get varied results. Some dealerships will NOT run on a month-to-month budget, or may not fun their fiscal calendar on a standard calendar months, but MOST DO. So, use this to your advantage! Business is business, and dealerships need CASH. They have multi-million dollar floor plans, payroll, utilities, and other business expenses and have to make payments to regardless of profit. This is specially helpful if you’re dealing with your own cash, or a blank check financing, as the dealership gets that cash the same day you do the deal.

    7. With your time, compile your Email list of recipients. You want a simple, straight forward Email that will be sent to potentially 30 or more dealerships. I don’t go and just send out Emails to every dealership I come across. I will quickly search for the largest volume dealerships (and if there’s a HUGE one states away, include them too) and try to target their Internet/fleet sales Email address’s.

    8. Write your Email. Keep it short and sweet. Be professional, but not too formal. You’re not addessing a dealership or person by name, this is ONE Email that gets sent to everyone. Write that you know exactly what you want, and tell them exactly what you want, every feature, and color (use option codes, then they know you know what you’re talking about and will assume you know their price on it as well) and that you want to close this deal by the end of the week (will get more into that later). Politely ask them to be sure the deal they offer is already accepted at the dealership, and that they don’t have to go and get approval from the manager, owner, etc later. You want something that the salesman is ready to close on. Remember ROI, don’t waste any more time. If your list is long, tell them they have ONE chance to earn your business and place the bid accordingly. If it’s shorter, then tell them to offer the best price and ASK THEM FOR THEIR DIRECT PHONE NUMBER. Why? They know you’re serious, and you will take this to the phones. But they have to earn your attention first with the starting price.

    9. Back to timing, get ready to fire off that Email. You want to send this just a couple days before the end of the week, and end of the month. So for example, next Wednesday if you’re dealing on a large Email list, or Friday for a LOCAL dealership list only, and you’re available that day. Tell them your zip code, and you want the quote at the OUT THE DOOR PRICE for a CASH deal. If you’re doing a blank check financing, then you just tell them later to add the cost of the lien to the title for the financing. Don’t mention that from the beginning though there’s no need. Salesmen get in a different mindset if you say financing but if you have the blank check in hand then it’s a different type of deal because financing to them is NOT a sure thing, and if they’re working the table to get you your deal that will hurt their chances. Also if you do it on the last day, TELL THEM YOU WANT TO CLOSE TODAY AND WILL GO TO THE DEALERSHIP ONCE AN AGREEMENT IS MADE. AND DON’T LIE. MAKE SURE YOU’RE AVAILABLE TO GO. This can be more effective than larger Email campaigns if you really hit an urgent dealership. I scored an awesome deal on a new Jeep liberty, well under dealer cost (not including incentives) this way as the dealer was literally days from going under and HAD to have cash to stay afloat. It didn’t matter that they lost over $2,000 (after hold back) in the deal, it was another $19K they wouldn’t have had in their bank account otherwise that day.

    10. The day has come, it’s now 8 AM. Send off those Emails… be sure to BCC everyone so no one knows who it’s going to. This is important it’s done early. If you wish, leave your phone number in the Email but this is only recommended for those that can handle it. I’ve exhausted an entire day on the phone doing this before, but I am a business man myself and am very eloquent on the phone so I could keep the salesmen in check, and focused, but it was for a $60K+ vehicle and the savings to me was worth it as phone conversations WILL make the dealerships more comfortable. They like hearing your voice, knowing you’re serious, knowing you’re capable of buying immediately, and of course they like the opportunity to make some money too but if you’re firm but polite, you’ll be fine.

    11. Give it time, don’t make a fast commitment to anyone. Even if you see an offer come in an hour that’s already below invoice… if it’s two days before the end of the week or month, give it the full day. If this is the last day deal, give it till about noon to open the door to take negotiations further. Because if you’re going to deal that day, you need to give the dealership time to clean up the car, draw up the paperwork, for you to get there, etc.

    12. Now is the time to negotiate further. Let’s say you have three great deals all within a couple hundred dollars from close dealerships. Get on the phone with all of them, get them to compete for your business. First ask them if the car is there, or do they need to do a dealer trade. If it’s there, then they are ready to move quick. If it’s a dealer trade, they very well could be trading at one of your other best bidding dealerships, but in that case they have to lose a car of their own (and it’s usually a better car) and drive to the other dealership and do that deal with them first. This will DOUBTFULLY result in a better deal for you, but if they are really the lowest bidder already… then you may want to consider taking a hit on a feature or color as they will go lower for a car they have on their lot if they have a close match to what you want. Maybe $300-1000, sometimes even more if it’s a specialty vehicle.

    Remember, we’re playing the odds that you’ll find a dealership that NEEDS the cash, so a very small number of dealerships will fit into this category and that is your opportunity to score the best deal. This can also happen if you find a dealership that purchased some cars that they are having a very tough time selling locally because no one wanted them. For example, I bought a mercedes-benz 4matic a state away because they had a few in stock they could not sell. No one wanted 4matic’s as they don’t get enough snow but thought they would sell, they’ve been sitting on the lot for ~6 months so they just wanted to move them.

    Be honest, polite, and professional, and have fun. Remember, even if the dealer is losing money it doesn’t mean they don’t need the deal or the salesman won’t make a commission. To many dealers, sometimes any deal is better than none when they’re in a bind. And don’t forget the old rule, cash is king. If possible you’re much better off bringing your own cash, or blank check financing to the table.

    This is optional, but recommended. Because I give dealers a hard time, I bring two $50 gift cards (or a $100 mortons gift card! courtesy AMEX rewards points) when I close, and give it to who I deal with, or half to the manager/owner if I know they were highly involved in the deal and the one really making the concessions for me. There’s no doubt they are working for you deal and making sacrifices so you should be thankful, polite, and precise with the information you give them. This is just a final thank you as I never want to burn a bridge with anyone I deal with, and otherwise they may have a bitter taste in their mouth of the deal.

    DISCLAIMER: This will not always achieve under cost results. On the highest demand, new model, and limited vehicles many dealers simply cannot bring in more cars as they have reached their allocation limits. If they’re moving every car they come in with good profit, they will not sell it to you at a loss, no matter how quick and simple your deal is. They may knock a few hundred off but don’t expect the world.



  • Very interesting and informative.
    I just did a cash deal by first doing a test drive and as I was walking out the door the sales manager offered a deeper discount. I told him I would consider it and left. The next day I was at the dealer to make the deal but things got slow like three hours slow. Involved another test drive of the exact vehicle. I knew this was to wear me down on the trade-in value and sure enough the trade-in value was low. As I was walking out the door over the trade in value the salesman relented and gave me my price. I knew he wanted me to give, in due to the time already invested in the deal, but since I was willing to walk I think the time the salesman invested worked against him. I thought I did good but your plan probably will produce a better speeder result.



  • We may not be like the rest but we pay for our vehicles in cash; the last one we bought brand new from the dealership was in Q4 of 2015. Our style is tell the salesman we’re paying in cash, this is all I’m willing to pay for X vehicle in your lot. We have no trade in and this is the car we want; the color of the car is the only factor negotiable. If you’re not going to lower the MSRP to meet our price, let’s not waste each other’s time. We usually cut the back n forth negotiations to 45 minutes and then I stand up ready to go when the boss comes up and say we have a deal.

    We’ve done this twice now and paid no more than what we were willing to part with. For those asking why we buy brand new, the price difference of the certified used were just a few hundreds so I’d rather buy brand new but according to my price which I’ve researched prior to making an offer. We’re well aware that vehicles depreciate as soon as they roll out of the parking lot but we still stick to brand new ones.



  • @Ma-Barker I did the same last time I bought a new car, only I wanted to get some airline miles out of it too.

    Me: I’ll be using my credit card.

    Them: For the downpayment? Great!

    Me: No, for the out the door total cost. Any problem with that?

    Them: Uh…we can only take a maximum of $2500 on a credit card.

    Me: Okay, bye! I’ll find another dealership that wants to work with me.

    Them: Let me ask manager. <leaves, returns> Manager says we can go up to $5000 but that’s it.

    Me: Do people pay with credit cards in your Service department? I’ll bet you take in more than $5K in a day in Service?

    Them: Uhhh…gotta see manager. <leaves, returns with manager>

    Manager: You sure you want to do this? We can get you great financing!

    Me: I’m sure and tired of playing. Yes or no?

    Manager: <sigh> take his card

    Me: <thinks to self: Win!>


  • Global Moderator

    Great thread OP.
    This is very similar to how I did it years ago and bought a brand new car $2000 below sticker price.
    One thing though, I would advise against is giving them your phone number. You will not have any peace of mind once they have your phone number.
    The only time I gave them my phone number was when the deal was already finalized via emails and just before going to dealership to sign the papers and pay by cash.
    I think they gave me that price just to see and talk to me after being frustrated for so long !😄


  • 500 Club

    What do you do when there’s only one car in 4 states that meets your criteria?
    I feel like I don’t have much bargaining power since they’re going to have to bring the car to me from out of state.



  • Few things I didn’t read & could’ve missed.

    Is the specific car made in small quantities or flying off lots? Then your bargaining is limited.

    Otherwise if your car model is widely available. Some tips if the 2019 roll in 09.01.2018 then buying a 2018 in late late August is best. Confident your 2018 will be around longer then wait even longer.

    If it’s a common car & you’re in a major city. It’s not necessary to travel more than a couple hours away.

    Last time I didn’t call for some brands cause it took longer than 30 seconds to describe the specific model. Yes do the web research. Know the exact T,T & Licensing in your locale. Pay cash, have financing arranged, or know your numbers so as not to get screwed by dealer financing.

    Have a list of dealerships you’re willing to deal with. Ask for Fleet Sales an antiquated term I’m told now some call it Web sales. Call talk to the afore mentioned head cheese: I’m buying a … within a week my zip code is xxxxx. What’s the OTD price. Don’t discuss anything but the OTD price.

    That’s it. I’ve saved thousands this way.



  • I first read that post in 2011, and I’ve used those steps for the last two vehicles that I tried to purchase. I missed reading the disclaimer, though as it would have helped on my second attempt.

    The first time, I was purchasing a very common car - Honda Accord. Because we were not in a major city, I hit every dealer within a 2 hour drive. Am I glad. The best two offers, by over $700 difference, were each two hours away. I know, $700 for four hours doesn’t seem like much, but my wife and I combined don’t make anywhere near $175 hour. The salesman was the best I’ve ever dealt with. Friendly, but efficient. He made no attempt to upsell us anything. I had the check, and he had the car prepped. He said that Honda insisted he go over basic operation of the car, but he went through it at a comically high speed, taking less that 5 minutes. This was my best car purchase experience ever.

    The second attempt was an absolute failure, as I was trying to purchase a vehicle which I later learned only had 3 in the whole region. I got one excellent price, but the dealership couldn’t do a dealer trade because I had also emailed the dealers with the vehicle, and they wouldn’t give it up. 😞

    As others have already said, don’t give your phone number until you’re confident of where you will buy the vehicle. I highly recommend creating a temporary yahoo or google email address so that you don’t get bombarded with spam.



  • @marcopolomle this is why I use Google Voice. I can “block” them if the “annoying” starts 🙂



  • @ma-barker said in How to buy a new car, PhWF (FWF) style:

    We may not be like the rest but we pay for our vehicles in cash; the last one we bought brand new from the dealership was in Q4 of 2015. Our style is tell the salesman we’re paying in cash, this is all I’m willing to pay for X vehicle in your lot. We have no trade in and this is the car we want; the color of the car is the only factor negotiable. If you’re not going to lower the MSRP to meet our price, let’s not waste each other’s time. We usually cut the back n forth negotiations to 45 minutes and then I stand up ready to go when the boss comes up and say we have a deal.

    We’ve done this twice now and paid no more than what we were willing to part with. For those asking why we buy brand new, the price difference of the certified used were just a few hundreds so I’d rather buy brand new but according to my price which I’ve researched prior to making an offer. We’re well aware that vehicles depreciate as soon as they roll out of the parking lot but we still stick to brand new ones.

    I agree the difference between a good deal on a new car and a deal on a used car is not that great if your buying a vehicle with a high trade in value. ie Honda, Toyota
    Plus you get a manufacture backed warranty.



  • @ma-barker said in How to buy a new car, PhWF (FWF) style:

    We may not be like the rest but we pay for our vehicles in cash;

    We used to do this also, but I’ve changed my thinking to…It depends.

    We were prepared to pay cash during one transaction, but they had a deal going where if you financed at least $5000, they reduced the price by $1500. It would have cost us more to pay cash. We financed the $5000 minimum and paid it off right away.

    Then we paid cash for the next car.

    Our newest purchase from last month, we financed nearly the whole purchase price. (Thanks to all the FWF discussions on financing a purchase as long as your investments are earning more than your loan rate. 😀)

    We usually put the maximum the dealer will allow on the credit card. I’m not sure I’d have the courage to strong-arm more out of them. Maybe that’s a mistake I’ll be looking into in future.



  • @gwraigty I don’t know if it’s called strong-arm approach but for us, we just lay our cards on the table. If the dealership will not accept my offer, I leave and go to the next dealership. Since the offers we make are based on careful research which I know is reasonable, the boss has not turned it down. We have no plans of buying another vehicle in the coming years so I’m not paying attention to vehicle offers right now. We still do a few test drive offers that come in the mail; most salesmen just fill out the forms and don’t even let us do the test drive (they don’t know how much we appreciate this!).

    I’m with you in trying to find the best deal in everything. Go for it!



  • RE: #7 creating the list and deciding how near/far to go.

    If you live in a competitive market with lots of dealers (technically lots of separately owned dealers since some dealer groups own multiple dealers), you may not have to expand your list as far as you would if you live in a market with few dealers or groups.

    The other thing to take into account is the popularity of the model. If it is a hot seller, expand your search farther. In that case, even if there are many local dealers, they may not be offering much of a deal on a popular model, but you may get lucky and have a dealer further out facing some situation where they need the revenue more.


  • Global Moderator

    @alexsj said in How to buy a new car, PhWF (FWF) style:

    @marcopolomle this is why I use Google Voice. I can “block” them if the “annoying” starts 🙂

    Yeah but I just don’t have the patience or time to listen to their “sale” talk.
    They still try to upsell you on the phone but they don’t have that option with email since I ask specific point by point questions.



  • In our experience, the best time to buy a car is the last quarter of the year when the newest models are starting to roll out. If they still have a lot of stock of the cars you’re looking at, there’s a good chance they’ll give you a good deal on it. When you come at the right time and they’re trying to meet a quota, they’ll likely accept any reasonable offer just to meet their quota and possibly accompanied by a bonus.



  • @gwraigty If you think of it as strong-arming, you’re going in with the wrong mindset - you have something they definitely want (piles of money), they have something you MIGHT want – but only if the conditions are right. It’s on them to make you happy!



  • @mikk1 said in How to buy a new car, PhWF (FWF) style:

    If you think of it as strong-arming, you’re going in with the wrong mindset

    Point taken. 🙂 Always trying to learn.

    Hmmmm, not enough characters???



  • @marcopolomle trust me, they will not answer questions - instead they will ask you to come to the dealer to have the questions answered… (fml, kill me)


  • Global Moderator

    @alexsj said in How to buy a new car, PhWF (FWF) style:

    @marcopolomle trust me, they will not answer questions - instead they will ask you to come to the dealer to have the questions answered… (fml, kill me)

    I make it clear to them in my first email that I don’t have the time to visit dealership until the deal is finalized and till then I will only communicate via emails.
    Most do if they want my business.


 

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