An online lesson on how to "Beat the Dealer"

Ok here goes....

I know there will be haters so sorry guys who are still selling cars! Hate the internet, not me.

Lesson One: Bringing together your Weapons

The first thing you should do is realize that cars are a demand-type item. First in line will pay the most. Generally, when a new car comes out, there is a gentleman's agreement among the dealerships. The higher-end marques anyway (ie not Ford). They have pretty much decided to "hold the line" when it comes to negotiating prices. That's why many of you shouldn't be upset with some dealers "not wanting to deal" b/k that is what the General Manager has dictated. Best plan: wait a little while...few months at least after a new car has been introduced. You will see some places faltering on holding the line....that's why i'm not surprised to see that IS300 go for 31k out the door recently (whose car was that?). That seems about right for this stage in the game b/k i remember seeing ES300's in 92' going out the door for about the MSRP. Early on, the most you can expect is getting a few freebies...wheelocks, cargo net...the cheap stuff. But you will still pay MSRP. Why? b/k they can get it from the next guy. They can be polite about it however. Reading about that guy who flat-out said "you don't look like a real-buyer" is unexcusable. Nobody sould be treated that way (at lexus, sure for Ford...espcially if they've made an appointment. If that happens...take off. Back to the lesson.... So you've realized the best time to go...after a few months at least. Now, to narrow down the specific time of the month. Well, that would be a giveaway wouldn't it??? Many of you have always heard that the best time is the "end of the month" right? Well, let me spell it out for you. It isn't the end of the month per se...its the 30th. Period. The 30th. Not the 29th. Not the 31st. Its the 30th. The selling cycle for ALL dealerships ends the 30th of the month. You must remeber that all the dealerships are competeing with each other for incentives and bonuses from the Mother Manufacturer (aka Honda, Toyota, Ford etc). That's why some dealerships can afford to do things with prices that others won't touch. They're making money doing volumve (moving metal as i used to call it) not in the money made per vehicle. So, find the volume dealership in your area and go on the 30th. To be continued.....

Regarding holdback, Edmunds.com has a really good definition of terms and terminology. I learned stuff I didn't know....

Yes, the best time is Winter. Specifically oct-november thru january (you wouldn't know it here in california really) Reason: ppl are doing other things and have money and time problems with the holidays coming. Plus, it's raining. Errr, snowing in some places...

Probably theeeee best time in the whole freaking year is Dec 30th. Although if you need a car, you need a car....

Part II - Fine tuning your weapons

Where we last left off, i was suggesting waiting till the end of the month as a possible weapon. Well, here's another one (before i lose my T-1 connection for a month). Ok, so you've decided to buy. First thing you do beside deciding to go on the thirtieth of the month is scan the newspapers. I don't mean the sports section. I mean the classifieds. Go thru the section were they list used cars for sale and find the lexus area. Look for local dealers advertising a "set price" for new cars. Now go thru the new car section were they list only big display ads for car dealerships. Same thing - scan and pan looking for advertised pricing. Clip these out and put them aside. Now, granted that most lexus dealerships don't DO alot of advertising (here in LA we mostly get Longo Lexus advertising pre-owned terms) but sometimes you might find something interesting (espcially now that it's the holidays). They want to push deals. This is something you'll want to pull out after discussing the terms of the deal...kinda like find their best price then...BAM...show them the best price you found in the newspaper. This really works with honda/toyota/acura...always lots of advertising deals. You want to find the best price and then go to the place that says "we will beat any price". One caution. You Must be sure the model numbers match up for the car your talking about. For example, when i was doing acuras a "415" meant an intergra with a stick and cloth and a "446" meant an integra with leather and an automatic (i might be wrong on the exact numbers....its been awhile). These numbers are almost always printed at the bottom of the ad

In terms of actually barganing with the dealers, many times people think that the dealership will ALways want the customer to pay cash out-the-door today and not finance. This is incorrect. The dealership actually wants you to finance your car becuase this is another source of revenue for the dealership to make money on. Not really a whole lot, but a good enough percent. I LOVED getting people to finance......always made my day. (well, the one's with good credit anyway - comebacks SUCK). To be continued.... Have a nice holiday!

I'm happy today. My brother followed my advice and the advice of fellow posters here yesterday (the 30th) and got the Honda Accord he wanted $600 under invoice. He even got the a "J" vin...an actual japanese-built accord. They've only imported a few recently. He even got 2.9 financing from american honda. Cool huh?

Did anybody else or anybody you know "make out" yesterday?

Happy New Year!

Interlude: My ally, my enemy

i wouldn't necessarily agree that friends and families of workers automatically get good deals. That is shooting yourself in the foot if you blindly believe that without doing your research. For the Mitsubishi Galant, $200 under invoice is a fair deal but not the deal that $600 under invoice is for a Honda Accord. It really depends on what your buying and how you work it....

When i was an Acura Dealer, one philosophy that i encountered was my General Manager's explantion why some dealers, especially non-high-end marques (ie NOT lexus, MB), hire just about anybody off the street. Basically, those dealers will hire anybody off the street, even if that person has NO potential to sell b/k they not only hire the individual, they hire that persons' network of friends, family and old co-workeres.

A hypothetical example....

You have unemployed "Ed" who starts working for Chevy. Being the bumbling idiot he is (and given the nature of the car business) he sells 7 cars the two months he was working there. He was a wash-out. However if you broke those 7 cars sales down into who bought them...well here it is:

3 to his immediate family (uncle Jeb, uncle Bob and his brother John)

2 to good friends

2 to friends of friends

all these people were under the understanding that they would get a deal. Did they....we'll maybe. But what really happened was that the dealership was paying this guy (essentially) minimum wage to steer 7 people who bought 7 cars from their lot. The dealership made money on the financing, made money on the deal and put 7 cars toward their incentive volume from the mother manufacturer. Not only that, the dealership has the potential to have 7 service-relationships with 7 new owners, 7 new patrons who are probably going to go to that dealership for service (per warranty tom-foolery) for AT LEAST 3 years to come to do oil changes, adjustments, tuneups...you name it.

At the same time, there is a limit as to just what the dealership will do for the employee. Talking hi-marque, my deal as an Acura dealer was $100 over invoice on any Acura (except the 3.2 TL at the time). However, that was much WORSE than i could've gotten had i did the newspaper routine. At the time 15.9k dollar integras were growing on trees over in the volume dealer. I don't remember the exact differential but it was like 1700 dollars for the same car. Big lump of cash.

So you see its very-very-very relative and its all about PERCEPTION. You get a good deal if YOU THINK your getting a good deal.
So my advice....be careful and do the research before you let your friend-dealer, friend-dealership worker convince you that he can "get you a good deal".

[re the new 5spd]
actually, that will be full MSRP PLUS markup. Of course, Lexus will add the optional wheellocks, cargo net, invisible UV paint protection application etc. etc. etc. Yup, get ready to BEND OVER! All that list crap is mostly just hype.

~HOT TIP~
don't take any dealer's word for it. If you REALLY want to see where you are on the waiting list, ask to go see their delivery board in the office-area. It will look like a HUGE dry-erase board and will have the true delivery dates of the cars...when they will flatbed in....AND WHO HAS A DEPOSIT ON WHOSE CAR (it will list their last name next to the car and delivery date). Honestly, when i was at Acura, we only knew in advance exactly what cars were comming in about 1.5 months in advance. Other than that, it was all just rumors and speculation on the part of the general manager. Sometimes we got cars we didn't even expect. If lexus is anything like acura, they don't know either. ASK TO GO SEE THE BOARD and see them write your name next to a blank spot IF YOU REALLY WANT TO PUT A DEPOSIT DOWN...

Part III: Go in Prepared

It's amazing but today (03/19/01) marks the first day we all can see our exact credit score that determines how much credit costs us and what kind of APR we can command. THis just came out in the latimes over the weekend...check it out!!!!! Truely amazing....
http://www.latimes.com/business/20010317/t000023226.html

How this applies:
Many times when you are financing a car, the dealer will try to put the idea of doubt in your mind about your credit-worthiness. Take for example my brother's experience at the first dealership we went to. Although my brother has a credit score of 806, the car-saleman (i say carsalesman in this instance with disgust) we were working with, after he ran my brother's credit, tried acting as if my brother had poor credit. Literally, a punk-ass snake (who obviously did not know who he was dealing with). We got disgusted with the BS and left to the next volume dealer down the road.

How this applies 2x: Many times special incentive APR's offered by Honda/Toyota/Lexus etc. will availible to people with a certain credit score of 700+. If you go into the dealer with a copy of this in hand (don't reveal that you know what you know) and see what they say about your score, you get an idea of how honestly they are treating you. Like saying you don't qualify for the special APR when in fact you do. (remember, they make money on financing)


[This message has been edited by RotaryBzzz (edited March 19, 2001).]

La Times will start charging for this article in two weeks so might as well post it here...

For a Fee, Consumers Will Be Able to View Credit Scores Online
Web: Leading firms will make the once-secret 3-digit rating available for $12.95. Critics say it should be free.


Starting Monday, consumers can get a glimpse of the three-digit number that often determines whether they can get a car loan, a home mortgage or even a job.
A Web site launched by credit bureau Equifax and credit scorer Fair, Isaac & Co. will charge consumers $12.95 to view their once-secret credit scores, which increasingly determine whether people get credit and how much it costs. Links to the credit score site can be found at both companies' Web sites (http://www.equifax.com and http://www.myfico.com) and at http://www.scorepower.com.
Fair, Isaac says its scores are used in 90% of all the credit extended to U.S. consumers. Credit scores also are used by employers, landlords and insurers to evaluate applicants.
After fighting for years to keep the scores under wraps, Fair, Isaac gave in to mounting pressure by consumers, lawmakers and companies offering rival versions of credit scores.
But some critics say Fair, Isaac and Equifax, one of the nation's three largest collectors of credit information, should have done more for consumers than create another fee-based service.
"It should be free," said Betsy Imholtz, director of Consumers Union's West Coast office in San Francisco. "For years we have been trying to get credit reports for free. . . . They're charging us for access to our own information."
All three credit bureaus charge $8 to $8.50 for a credit report, which details a consumer's borrowing and payment history; consumers who have been denied credit are entitled to a free copy.
Mike Cummins, Equifax's general manager for consumer business, said the $12.95 price includes the company's $8.50 charge for the report, plus $4.45 for the credit score and accompanying explanations, which include personalized interpretations of what factors influenced the score and tips for improving credit.
Credit scores are derived from information in a person's credit report; they can be hurt by late payments, bankruptcies, collection actions and liens. They also can be damaged by credit card balances that are too high or an excessive number of credit accounts--although Fair, Isaac doesn't reveal its specific criteria for how much credit is too much.
"We took a lot of care not to be super-specific," said Cheri St. John, Fair, Isaac's general manager for global alliances. "The formulas and models are very complex, and there really isn't one or two things consumers can do to raise their scores."
Instead, the company hopes to encourage a pattern of behavior--making payments on time, maintaining low balances on credit cards and not applying for too many credit accounts--to improve scores.
Consumers who use Fair, Isaac's Score Power system will get four pages of charts, details and analysis of the four main factors that determined their scores.
Imholtz of Consumers Union said the company's refusal to be more specific, and the densely worded analysis of the scores, will make the site too difficult to understand for many consumers.
"It's a complicated subject, and I give [the companies] credit for trying, but it's tough to get through all that text," Imholtz said.
Fair, Isaac originally fought efforts for more disclosure by arguing that consumers wouldn't be able to understand the significance of their scores without detailed explanations.
Consumer activists responded that people have a right to know more about their scores, and California passed a law that requires mortgage lenders to disclose the scores to loan shoppers starting July 1.
In addition, several competitors

And...of course....My favorite thread. Enjoy it... and use it wisely.... Young Jedi...