New Car Buying Strategy

[Mark S.]

Always threaten to walk if anything looks fishy.

This has always worked for me...except during the pandemic. The new car shortages were so bad some dealerships weren't budging on these ridiculous addons even for people who ordered their cars directly from Ford. They were hoping customers would refuse to pay for the addons so they could keep the car and sell it for a markup.

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[Tigger]

I’ll keep short and try to just answer things you questioned/noted, as I have way too many opinions on this as I buy too many cars for myself, family, friends and co-workers:
First, I say there are two stages. In the early stage, you buy only if you get a ridiculously good deal. For example, you check at least two online resources for the value of your car (eg Carmax and Carvana) and you have checked at least one dealership. Then, a dealership has the car you want and they offer you two things: their car at a price better than what Edmunds (or your preferred website but I like this one) says they are selling for and they offer you more for your car than anyone else. This happens usually in one of two situations, end of the month or a quota is needed for the dealership, or a desperate salesperson or manager that must sell a car or else. But, as a general rule, this is getting rarer so I do not buy a car until about the third visit to the dealership.
In the second stage, you have found a dealership or two that you like and trust. Then, when you want to buy the vehicle, simply state the difference in price between your vehicle and their vehicle. For example, if you want $20k for yours and their new vehicle has a Fair Market Value in your area on Edmunds of $40k, then offer $20k difference out the door. Then, see how close they get. If not close, then say thank you and bye. If they get close, say that is close but you are staying with your price and they can contact you when they agree. This works for me often. And I like the stick with only the difference in price as they can do whatever they want in increasing your trade-in or reducing their vehicle, but just get to this number.
Third, if an online place like Carmax is offering you significantly more than a local dealership, then it could be worthwhile to sell to one place and buy in another, which will cost you more in taxes. This often happens when your selling vehicle is more desired nationally than locally.
Lastly, I’ll just say that these dealership visits take time but should never be uncomfortable for you. If they are, that’s not the right dealership or at least not the right salesperson. But if I spend 10 hours I plan to save a thousand dollars or two. I’m comfortable thinking of it as working and getting paid $100-200 per hour.
But my overall thinking is that I don’t do it like 15 years ago. Games, acting and bullshit are not going to be done by me but sure as f$&@ not by someone getting my business. Building a relationship, saves money.

 

[MJE]

I’m not a negotiator so I love using X-plan. It just works. Saved me just a bit more off the BSBL than even the deal I’d gotten from them at first. Sadly though that was through my employer & they no longer offer it.

 

[Bucko]

I don't know how much you need to prep now, but waiting until the end of the year is always a good strategy.

My strategy in car buying is putting myself in the mindset that I don't need a new car. It makes me able to walk easily away from the salesperson or dealership if I'm not getting a deal I want.

Another tip is to arrange financing through your bank or a credit union before you buy a vehicle. You will deal on a price, then deal on the finance rate; I never take the interest rate they present; I make them shop around for a better one. I already know what I can get so if the dealer offers a higher rate, that is of course a deal breaker. They make money on the financing too; a kickback from the financial institution they go through.

And never, never tell them up front where you want your payment value to be at dollar wise. I tell them the lowest possible monthly payment. If you give them a dollar amount for a monthly payment, they will never get it lower then that.

 

[Mark S.]

My strategy in car buying is putting myself in the mindset that I don't need a new car.

This! Most car salesman have sold many, many, many more cars than you have bought. The good ones develop a keen sense--through experience, training, or just an innate talent--of how much you want a car. If you walk in the door gushing about all the rave reviews you've read, spouting off the specs, and generally behaving as if you can't live without this car, well, you're already behind the power curve.

The absolute BEST time to buy a new car is when you don't need one.

 

[gatornek]

The absolute BEST time to buy a new car is when you don't need one.

The controverse is also true for that. The worst time is when you absolutely need one. The desperation screams through.

 

[gatornek]

Edmunds (or your preferred website but I like this one)

Essentially...the best websites for pricing are those that actually tell you what the listed selling price on the vehicle was .... or at least aggregates it in some manner. Truecar used to be AWESOME for this. I feel the dealers quickly learned what a threat it was (I got my best deals using their info way back in the day), took control of it, and obfuscated a lot of the data.

You feel that Edmunds does a good job of letting you know at what price your local dealers sold specific model cars at?

 

[gatornek]

Games, acting and bullshit are not going to be done by me but sure as f$&@ not by someone getting my business. Building a relationship, saves money.

I completely agree. But its tough to build relationships with dealers around here. They are all truly awful and rotate salesmen like produce at the market.

On this last purchase of my BS, I took a train all the way to Palm Beach (2 hour drive), just to find a decent dealer that was only going to add $500 on MSRP, and a decent saleswoman, who was fair and honest with me the whole way compared to the thieves down here. I will try give that dealership and saleswoman another chance if she is still around by the time we go to pull the trigger. But then again, its not like I feel I got a 'great' deal, but I probably got the 'best deal available'.

 

[Mark S.]

You feel that Edmunds does a good job of letting you know at what price your local dealers sold specific model cars at?

I'm also a fan of Edmunds. They list MSRP and what vehicles are selling for in your area (market price). You can get quotes from dealers if you like, or you can simply print out the sheet and take it with you when you're shopping if you think you can negotiate.

 

[Tigger]

Essentially...the best websites for pricing are those that actually tell you what the listed selling price on the vehicle was .... or at least aggregates it in some manner. Truecar used to be AWESOME for this. I feel the dealers quickly learned what a threat it was (I got my best deals using their info way back in the day), took control of it, and obfuscated a lot of the data.

You feel that Edmunds does a good job of letting you know at what price your local dealers sold specific model cars at?

Yes. I like them better than TrueCar for accuracy and I really like their other content such as car reviews and a breakdown of which options and trims they recommend. I just find them as the best overall site when I’m getting close to a purchase.

The only thing i found on Edmunds that has not been helpful for me is the get a quote from the local dealership. But this may be a local thing as I like two local dealerships that I have a great relationship with, except their online sales forces. I find them slimy and manipulative at both dealerships.

 

[Mark S.]

If you have time, this video is a really good primer on what to expect during negotiation for a new car purchase. This person had a number in mind and made it clear he was willing to walk if they didn't meet it.

EDIT: Apparently this YouTube user decided to make the video private after posting.

 

[sajohnson]

Negotiations depend on how I feel that day. Walked out on a deal (they “lost” $36,000) over exactly two cents. Argued with two salesmen and a manager for 15 hours, got the car for exactly what I offered them 30 seconds after I walked on the lot.
In the past I never went shopping ’til I had gotten all the info on the dealer’s costs (vehicle, options, etc), and his current rebates and “spifs” from the manufacturer. I don’t know if the banks will readily give them to you, but my credit union will.
Now I try to go to one place I kinda trust. The guy I deal with is so honest; when I ordered my BS from him in ’20 he sold to me for MSRP plus discounts. Ford raised the the price to the dealer $100 prior to it being delivered and I said, “No problem”. Salesman apologized, and sent me $100 bill after deal was done and BS delivered.

A reminder for those who may order and then have an unscrupulous, lying, fraudster claim you must pay any subsequent price increases -- that is false. Ford has a "Price Protection Program" that insulates buyers who have placed special orders from price increases. The buyer pays the amount they agreed to when they ordered, period.

Prior to ordering our Badlands back in Dec '21, we were told -- several times -- that we would be required to pay any price increases from Ford. That didn't sound right (and there were frequent price increases, some very large) so when we got home I checked -- sure enough, we had been repeatedly lied to. Essentially, if the vehicle is sold to the buyer that ordered it, Ford charges the dealer the price that was in effect at the time of the order. However, if the buyer is unaware of Price Protection, a sleazy salesperson will tell the buyer they must pay any price increases -- it is free money for the dealer.

In your case it was not a lot of money (relatively speaking) but as I mentioned in another thread recently, the increases can be substantial. The top trim of the Mach-E went up by $6,000 in one jump. The longer the time between ordering and delivery, the greater the potential price increase (for new buyers).

 

[sajohnson]

This post is specific to ordering a vehicle.

Generally there is no need to deal with a floor salesman or to go into a dealership when ordering a new Ford vehicle assuming you don’t mind waiting for the vehicle to be built to your needs.

This post is not for those people that use Ford plans like Ford X Plan etc. as specific rules apply to those plans.

My suggestions:
Do your own homework to determine the new vehicle you want, the specific model and options. The Ford website Build tool is a good choice here.

Use various online resources to determine:
Vehicle cost for the model and options you selected
MSRP for the specific vehicle and options (good to know that)
Use various websites such as:
http://markups.org/,
And determine the Destination and Delivery fee and other fees for the vehicle.
You want to arm yourself as much as possible with pricing information.

Use various car buying services (Costco, AAA Car Buying, etc.) so you armed with pricing information available for the specific vehicle you want

Search out all Ford rebates, coupons, etc. that apply to your desired vehicle. Take screenshots and make note of the applicable restrictions.

Do your own homework to check out reviews of dealerships (Google maps often shows reviews), use websites such as https://www.dealerrater.com/ etc.
Read reviews thoroughly to chose 2-3 dealerships you want to order from. Note that service departments often have separate reviews so the dealership you buy from may not be the dealership you use for service in the future. Note: A better price for ordering a vehicle might be available at a dealership in another state if that works for you.

For your chosen 2-3 dealerships you want to order from, call each of them and find out if they have a Fleet Manager (the exact title may vary by Dealership) and obtain the Fleet Manager name, email and phone number.. There’s no need to talk to the Fleet Manager yet. I would not use a Dealership’s Internet buying manager or team (those are often staffed with entry level salespeople).

Now you are armed with the information you need. Email the Fleet Manager and provide your exact list of vehicle, model and options. Ask for their best price to order the vehicle and if a deposit is needed. Ask for prices of the options to be broken out separately but some Fleet Managers will not want to do that. Also ask how to obtain a refund of any deposit if you decide to cancel the purchase. In this email state you want no dealer add-ons, nothing not even the dealerships sticker placed on the vehicle.

Email goes to the Fleet Manager at each of the 2-3 dealerships you selected. And a variation of the email goes to AAA Car Buying service and/or other car buying services that can order a vehicle for you.

Some of your emails likely will be ignored so at this point you might have to call the Fleet Manager and ask them to respond to your email.

Most likely one Fleet Manager (or car buying service) will stand out and you proceed to work with that one - other emails might be needed to confirm Ford rebates or other applicable offers. Keep all this correspondence including screen shots of these offers because you might need them later as very often the specific rebate will not be in place when your vehicle arrives. As long as you follow the restrictions for the offer it will be valid because it was valid at the time the order was placed.

The above also works for high demand vehicles which you may be able to buy from a Fleet Manager without incurring markups (a Fleet Manager may or may not be able to do this based on how the dealership operates).

Most likely the only time you need to go into the dealership and speak with the fleet manager is when going in to pick up the vehicle.

Will the above get you the lowest price vs buying a vehicle off the lot? Maybe not (probably not) because buying off the lot may get you access to other incentives a dealership has to make a sale.

Perhaps some of the above info will help someone that doesn’t want to order but buys off the lot. And note that I did not cover trade ins or financing or Ford extended warranties as each of those topics deserves their own separate post.

Great post, very helpful!

One part that caught my eye was:

"Note that service departments often have separate reviews so the dealership you buy from may not be the dealership you use for service in the future. Note: A better price for ordering a vehicle might be available at a dealership in another state if that works for you."

Good point about separate reviews for sales and service. In my experience, our 2 closest Ford dealers had generally positive reviews for sales, but poor reviews for service.

Over the decades (I'm 62) I've had numerous bad/stressful interactions with service departments when trying to get warranty service done at a dealer that did not sell us the car. The OWNER of one dealership told me that my wife should, quote, "Drive the car until it blows up!" It had a transaxle problem. It sounded like a bad bearing. I pointed out that if one/both front wheels locked up on the highway it could cause an accident and she and/or others might be injured or killed. His response? "That's what insurance is for." That's some next level dealer evil right there.

It's been so bad (having to threaten arbitration, etc.) that I reluctantly passed on the great deal Granger was offering here, back when we ordered our BS BL. IIRC, it was significantly under the invoice price. That was tempting, but the thought of fighting with the local dealer just to get warranty work led me to skip it.

Of course, that all but guarantees no warranty work will be required...

When I've mentioned this before people have said they have had no problems at all when taking their car to a dealer that they did not buy from. I don't doubt those experiences -- I only know what I've had to deal with, and it wasn't pleasant. One commonality is that the reasonable, friendly dealers tend to be in more rural areas, and the nasty ones are often in/near major cities.

Anyway, I just wanted to mention that. It may be a consideration for some buyers.

 

[sajohnson]

<Puffing out chest, thumbs in suspenders...> "I'll tell you what *I* do when buying a car. First I knock $5,000 off the MSRP. If they don't like it, I WALK! You've got to show 'em who's BOSS! Make 'em beg for your business..." Blah, blah...

As with stories about gambling and extended warranties, when it comes to car buying it seems we only hear from the people who are "winners" -- or were fooled into thinking they were.

There is a LOT of good advice in this thread. Some should be "stickies".

One thing I've noticed though is that there is a lot of focus on MSRP. MSRP can be very misleading. Some people treat it as if it were an 'average selling price', when in reality It can be high or low, almost meaningless.

Evidence of this is ADM. If a vehicle is in high demand and/or limited supply, dealers may slap on $5,000 to $20,000+ ADM. I've been in that situation more than once. I told myself that I'd pay MSRP but not a dollar more, only to be faced with $5,000 ADM. I walked, and they didn't try to stop me. As one salesman told me, "You're right, $5,000 extra is crazy, but people are paying it."

It comes down to supply and demand. When we bought the Badlands in Dec '21, they were in short supply and high demand. Our '97 RAV was going to need some work if we were going to keep it on the road, and my wife really liked the 'boxy' look of the BS. So we weren't absolutely forced to buy then, but it was a good time (for us).

As I explained in post #28, we ultimately decided to buy locally to (hopefully) avoid warranty work hassles. It seemed that with few exceptions (like Granger) every Ford dealer was selling special order Bronco Sports for MSRP, and dealer inventory for whatever they could get -- typically $4,000 to $5,000+ over MSRP. So we ordered the Badlands from our closest Ford/Subaru dealer for MSRP -- minus $1,000 order credit from Ford.

That was a reasonable deal for a Bronco Sport, at that time.

23 years ago, I walked into that same dealer to order my WRX. It had been written about extensively in the car mags, but they were not at the dealers yet. The salesman I talked with told me I was in the wrong dealership -- that they did not sell a "WRX"(!) I assured him that they soon would, and showed him an article about it.

I told them I would order one sight unseen, and suggested we split the difference between invoice and MSRP. They agreed, and few weeks later I took delivery. A little while later I was on NASIOC (Subaru forum) and came across an offer like Granger's -- out of state (NY) and according to the forum posts, the best price in the nation. It turned out to be almost exactly what I had paid. I'm a WINNER!

Bottom line -- MSRP can be a rough reference point, but buyers should not get too hung up on paying $X under MSRP. A really nice car that you like might have a low MSRP, relative to market value. So you might have to pay MSRP or even more, but that might still be a better deal than a lower quality car for under its MSRP.

Market value is what is important. A mfr can slap an insanely high MSRP on a vehicle, and the dealer can sell it for (say) a $3,000 discount, and it might still be overpriced.

A buyer could pay $10,000 ovre MSRP, but if they can flip the car and come away with (say) $5,000, they got an excellent deal.

 

[Bucko]

If you have time, this video is a really good primer on what to expect during negotiation for a new car purchase. This person had a number in mind and made it clear he was willing to walk if they didn't meet it.

Video is shown as private, and unavailable

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