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Car Buying 101: Volume 3
This is the continuation in the series of the "How to" of car buying.
Okay so now you've chosen the car and the options you want! And you have a
good idea of what the car costs. Now this is what you've all been waiting
for. How do you come up with a fair price for the car? Your not going to get
the car for wholesale, so what is a fair price to pay?
the wholesale price you found on the web pages. Add up all the options you
want on the car, and this is your total wholesale price for the car. Take
that price and add $300.00 to it. This is now your target price! Write this
price in big numbers on your sheet of paper! So you can see it, while you're
talking to the dealer.
This is the price you're shooting for. This is a
damn good deal if you can get it! This price does not include the
documentation fees or registration fees or taxes. This is the price of the
car before taxes. I don't know your state taxes so it will be up to you to
find those numbers out and add them to the price of the car to get the
OTD, or Out The D oor Price.
(In California add
10% to the price of the car this will get you very close to the total cost of
the car (8% sales tax and 2% DMV Department of Motor Vehicles)
(Luxury tax is extra)
Now you have your brief case full,
and you have your target price. Now your ready to go to the dealer! (Ok there's
more than one way to do this, and I'm going to cover two different ways. This
the least stressful way)
- why do you want to go to the dealer?
I'll assume you have the most powerful tool ever invented! The telephone.
Sit back down and get the phone numbers of at least three local dealers (I
like to get more but usually three will be competitive).
Get your list with the car make and model, with all the option codes,
available. On a separate sheet of paper, one for each dealer, put the dealers name
the person you talked withes, names and phone numbers. Leave room for the
price and other add-on costs.
I usually skip the sales department, and go right to the Fleet department.
(Don't do this on a weekend; the fleet people usually don't work weekends)
Tell them what car you're looking for, and ask them for their price.
You want the following:
- The price of the car with all the options and the color you want? (Color is very important)
- Documentation fees
- License and registration fees
- Taxes: sale, luxury and personnel (if applicable)
- Stock number (that way you're always talking about the same car,
dealers like to do what's called Bait and switch, this is
illegal in most states)
What is "Bait and Switch" you ask? The salespeople will show you one car and
give you a price, and sell you another car, the car is usually missing
an option or two, or they have more profit in this car.
- The bottom line OTD (Out The Door) Price.
this with all the dealers on your list; be sure to create a separate page for
each dealership, because your going to hear a lot of different numbers.
Note each number and be sure to ask what each number is, if it's unclear.
Now you have at least three different prices.
Compare the prices to the MSRP (Manufactures Suggested Retail Price) and
your target price.
(It's just nice to see how much you might save, by just doing a little up
Is any dealer close? How far off?
Call each dealer back and tell them the lowest price the other dealer gave
you! (Do Not tell them your target price at this point. This is just a game,
for now play by there rules!)
Ask if they can beat it! They will! But you're going to have to start
working again. There going to want you to come down to the dealership. Don't
go! Give each dealer an opportunity to give you there best price. You may
have to do this a few times.
You will also run across dealers that won't budge on the price. They will
expect you to come down to the dealership to finish the deal! Drop that
dealer like a bad habit; they're not going to negotiate, so why bother! They're
just wasting your time and you'll most likely end up leaving the dealership
I've seen people leave cussing, yelling, and shouting threats back and forth. It's
just not worth it! Let it go and don't deal with people that upset you. They
do this everyday and they're good at it!
Dealerships work on profit, not on making friends. They'd like you to
believe that they are going to be there for many, many years and your repeat
business is what they're looking for. Bull! All the sales staff is told to
go out there, and make friends. They like to play "good guy bad guy". I'll
get into that in the second way to buy cars.
Now you have three prices form three different dealers.
You've called the dealers twice. You have three more different prices.
The dealers now know that you are a serious buyer and they will do anything
to keep you interested!
Now call all the dealers back, a third time and tell them that you will buy
the car today at your price (Your Target Price). Write down their
responses. Most will have to go to the manager to get an approval. If they
give you a price have them fax it to you, if you have a fax machine. If not
note it on your dealer sheet.
Did anybody bite at the price? I'm sure they did! But the deal isn't done
until it's done.
Now remember this was a target price, not a sold price. If you get within
$500.00 of the wholesale price that's a good deal take it!
That's enough for now; stay tuned for at the Dealership in volume four!
This page was last updated on 05/28/2001 by HYPRACTV