buying a new car? advice from an ex car salesperson

phillyb

Banned
my name is phil, my email address is pxcbell@gmail.com
if you have any questions about what you're about to read, please pm me or shoot me an email...i will be glad to help.

first off, i would like to say that i sold cars for 18 months at a honda dealership in simi valley, ca. i don't understand EVERYTHING in the car business, but i understand how car deals work and what dealerships try and do to get your $$$.

please take this advice once you have decided on which car to get. these steps won't help much if you haven't decided which car you want. for instance, if you want an ms3, but you are considering the srt4 or a wrx, please figure out which car you want before you take my advice. and don't be afraid to go to a dealership to test drive these vehicles. do it once, do it twice, do it three times...and tell the sales person as many times as he tried to close you, that you are not sold on the vehicle yet.

once you've decided on a car, take 1-3 days to pull off the most important step: negotiating your car deal without sitting at a dealership for hours going back and forth with a salesperson and their manager and then his manager. at this point, you should know exactly which car you want. now you have to find it. go to mazda's website to request a quote. here is the link - http://www.mazdausa.com/MusaWeb/QuoteRequestStart.action - you are going to request quotes from as many dealerships as possible in your area. if you feel like driving 100 miles for your car, request a quote from the dealership that's 100 miles away. this is fine.

within a few hours, these dealerships should send you quotes via email for the car you've specified. some of the dealerships will call you. this is great...they are now competing for your business. there are still two things you need to do: find your car and get the best deal on it.

before you start negotiating price, FIND OUT WHAT THE DEALER HAS ON HIS LOT. i cannot stress this point enough. if he does not have the car you want on his lot, don't go there and don't take that quote as seriously as the ones from dealers with the car in stock. dealers will tell you they can get cars from other dealerships, which is true, but they will feed you tons of lines about price at this point and how much more it's going to cost since they have to go get a car. don't get wrapped up in it, just go find the car yourself, save some grief and only deal with people who have your car on their lot.

once you've found the different dealers with your car in stock, take their quotes and start shopping them against each other. this is where the internet comes into play. since you've requested quotes, you are probably only dealing with the internet department. this makes car buying really easy and allows for the process to take as little time as 45 minutes as opposed to hours going back and forth. through email, or if you want to speak with the internet manager on the phone, tell dealer a that dealer b will give you the car for xxxxx, have dealer a beat the price. then take that price to dealer b, c, d, e, f, etc...

at this point, you MUST be ready to buy a car or else all of your work will be futile because the quotes are generally only good for 72 hours. once you think you have hit rock bottom, tell the person you've been dealing with that you are ready and committed. you can probably opt to fill out a credit application over the telephone or by fax. at this point, the dealer should be able to tell you your apr, selling price of the vehicle, term of loan, and monthly payments based on your down payment.

DO YOU HAVE A TRADE-IN?

if yes, you will have to take an extra step in this process. 99% of dealers will only appraise the car when it is in their possession, meaning, you're at the dealership and their is an appraiser looking at your vehicle. there are some people on here who have got the dealerships to give them an estimated trade-in value over the phone by giving details about the trade-in (year, mileage, condition, accidents?/salvage title?...etc). that value is subject to change. there is nothing you can do about this.

for your trade-in, bring all information you have about it. do you still owe money? find out the payoff (the dealers will have to find out the payoff by calling your bank anyway, but it doesn't hurt to know where you stand before you go in). bring the registration. if the car is paid off, bring the title.

my advice to those with trade-ins, sell the car private party. you will get more money 99 times out of 100. if you're not worried about that and don't want to deal with selling your car private party, then you should expect to see FAIR TRADE-IN VALUE, not much more. not excellent trade-in value, not good trade-in value, but fair. for reference, you can go to http://www.kbb.com/ but you cannot expect a dealership to honor any pricing you print from the internet. kelley blue book DOES NOT BUY cars, so their information are still estimates. getting an actual number for your trade-in requires an actual buyer (dealership or private party) and it's only worth what someone is willing to pay, not what kelley blue book tells you.

at this point, you should have a car deal. you should feel good about yourself. you will now 100% commit to the internet manager and tell him when you can come to the dealership to purchase a vehicle. set up an appointment with this person and don't be late. most likely, you will be in and out in under an hour if the internet department knows what they're doing and you don't get stuck in f&i (finance and insurance). for f&i, these people are also trying to sell you stuff, gap insurance, extended warranty, lo-jack, interior and exterior treatments, etc...get what you want and ask them how much it affects the selling price and your monthly payments. once you get out of f&i, go drive your brand new vehicle and be happy.
 
Trade-in vs Private Sale - one thing you didn't mention was how this affects the sales tax of the car. I don't know what the rules are everywhere, but here the sales tax is calculated on the difference between the trade-in and the new car purchase price. When you're paying 13% tax, this can make a huge difference depending on how much the car is worth.
 
I read some similar guides from other sources before I was shopping. The one thing I wasn't sure about was, how do you compare offers from different dealerships when there are dozens of ways to customize the car? Like if dealer A offers you a car for 20,000, and dealer B offers you the same car with a sunroof for 21,000, who's is better? Should you use the inventory value of the sunroof? The retails value? The average of the two? This is just an example though...
 
I think the whole internet buying thing has made negotiating a lot easier for those who don't wish to spend hours upon hours inside a car dealership. I pitted 3 dealerships against each other and ended up spending only 20 minutes inside an actual dealership. Came out with a hell of a deal too. But like phil said and I can't stress this enough, RESEARCH, RESEARCH, and RESEARCH! I probably spent 2-3 weeks prior to even sending out for quotes researching this car and knew the ins and outs of the thing. good luck to all of you potential new car buyers
 
awesome info I could have used that back in May when I bought my car. It would have come in handy. I'm not good with people and negotiating.
 
Trade-in vs Private Sale - one thing you didn't mention was how this affects the sales tax of the car. I don't know what the rules are everywhere, but here the sales tax is calculated on the difference between the trade-in and the new car purchase price. When you're paying 13% tax, this can make a huge difference depending on how much the car is worth.

hmmm...this depends on how much your trade is worth and whether or not you owe money on her. let's say you trade in a 2004 honda civic for 8500 dollars on your 24k 2008.5 ms3. let's say you owe 6000 on the civic. you just put 2500 as a down payment toward your 24k ms3.

24k-2500 = 21,500. now you pay tax on 21,500.

let's take the same example and say you owe 10000 on your civic. you just added 1500 to the 24k ms3. this means you have to pay tax on 25,500.

if you sell your car private party, then obviously the buyer pays the tax. did that address the subject?

I read some similar guides from other sources before I was shopping. The one thing I wasn't sure about was, how do you compare offers from different dealerships when there are dozens of ways to customize the car? Like if dealer A offers you a car for 20,000, and dealer B offers you the same car with a sunroof for 21,000, who's is better? Should you use the inventory value of the sunroof? The retails value? The average of the two? This is just an example though...

hmmmm...you should already know whether or not the moonroof comes on the car and whether or not you want it. this is really a personal preference, cause some dealerships will work window tint, wheel locks, sun shades, wheels, etc into your payments. just make sure you are getting everything you want before you start saying yes to things you don't necessarily want. this will keep you out of a car that you didn't really want, but got sold to you.

again, research and pick the car you want, THEN shop the dealers
 
I'd suggest dealing in "out the door" prices. Even if you negotiate a good price for the car, then the dealer starts tacking on stuff like processing fees, advertising fees, or glass etching, you're talking about many hundreds of dollars. The salesman will swear up and down that everyone pays those fees. Not me. The sales contract on last car I bought even had the processing fee ($499 or so) printed in bold ink on the form, suggesting it was not negotiable.

And tax, title, and tags adds a considerable amount too. Bottom line you're looking at at least $1,000-$1,500 over the sales price of the car.

So be sure you know what the out the door price is.
 
I'd suggest dealing in "out the door" prices. Even if you negotiate a good price for the car, then the dealer starts tacking on stuff like processing fees, advertising fees, or glass etching, you're talking about many hundreds of dollars. The salesman will swear up and down that everyone pays those fees. Not me. The sales contract on last car I bought even had the processing fee ($499 or so) printed in bold ink on the form, suggesting it was not negotiable.

And tax, title, and tags adds a considerable amount too. Bottom line you're looking at at least $1,000-$1,500 over the sales price of the car.

So be sure you know what the out the door price is.


truth...a few things to also point out...

you have to pay a doc fee in california of 55 dollars. i don't know if that's in all states. sales tax and fees (including registering the car (again in ca...it might be different in other states)) are roughly 10% of the selling price of the vehicle, so you're out the door price is 22k + 10% = ~24,200.

THIS IS BEFORE INTEREST. if you've taken a loan for 24,200 over 5 years at 7%, you will be paying 28,700 for your 22k car at the end of the loan period.

most out-the-door negotiations are done when paying cash for the car. knowing what fees and taxes you're paying with be shown to you before you sign your contract including price before interest
 
Internet car buying is awesome. I got a great deal on my MS3 through direct and honest internet haggling. Didn't hurt that the internet sales team happened to be the owner of the dealership in question. The two biggest factors for me were:

1. Make sure you don't really /need/ the car when you are looking to buy.
2. Be ready to walk away.
 
hmmm...this depends on how much your trade is worth and whether or not you owe money on her. let's say you trade in a 2004 honda civic for 8500 dollars on your 24k 2008.5 ms3. let's say you owe 6000 on the civic. you just put 2500 as a down payment toward your 24k ms3.

24k-2500 = 21,500. now you pay tax on 21,500.

let's take the same example and say you owe 10000 on your civic. you just added 1500 to the 24k ms3. this means you have to pay tax on 25,500.

if you sell your car private party, then obviously the buyer pays the tax. did that address the subject?



hmmmm...you should already know whether or not the moonroof comes on the car and whether or not you want it. this is really a personal preference, cause some dealerships will work window tint, wheel locks, sun shades, wheels, etc into your payments. just make sure you are getting everything you want before you start saying yes to things you don't necessarily want. this will keep you out of a car that you didn't really want, but got sold to you.

again, research and pick the car you want, THEN shop the dealers

This is why, if you have the cash and you decide you want to still trade-in because you can't sell the car privately, pay the loan off first, get the title and then walk into the dealer free and clear to get the tax benefits. Then you'll only pay tax on $15.5k instead of $24k, which at 7% here in NJ is a savings of $595.
 
hmmmm...you should already know whether or not the moonroof comes on the car and whether or not you want it. this is really a personal preference, cause some dealerships will work window tint, wheel locks, sun shades, wheels, etc into your payments. just make sure you are getting everything you want before you start saying yes to things you don't necessarily want. this will keep you out of a car that you didn't really want, but got sold to you.

again, research and pick the car you want, THEN shop the dealers
This works fine when there are thousands of cars in your area with every available customization. In my experience however, this tends not to be the case (probably because I refuse to buy a car that everyone else is driving). It becomes difficult for me to find cars that I want with the exact same customization at all the nearby dealers...

What I'm talking about is only factory options though. I consider dealer offers to be considered after the main bargaining is done...
 
just curious, but what should you do if a cars.com search yields 19 listings with every pricing "not listed"?
 

New Threads

Back