What are some pointers when buying a car to get the lowest price possible?

Question

I read in an article not to start at the given price and move down, but to find out how much the dealer paid for it and work up from there. How do I start such a conversation? Should I ask right out how much they paid for the car, or is there some sort of strategy to get them to give this information?

B Auto, please do not leave comments that belittle the asker. I am aware that I am not going to get the car AT COST, I was merely asking how I could get the lowest possible price.

Answer 1

OK ... here's the deal:

Research the actual cost of the vehicle the dealer has paid (referred to as "invoice"), including the options on the car(s) you're interested in. There are many resources available on the internet to help you arrive at this number.

Once you have the invoice price, you have a number very close to the dealer's absolute bottom line. I've done it, but it's VERY difficult to purchase a car for less than invoice - the dealer has to REALLY want to move the unit to be willing to sell it for no profit whatsoever.

There are also several items that fall under the term "ADP" (for "additional dealer profit.") Common ploys are "prep charges" and "undercoating" and even "ADP." These are nothing but charges for useless or nonexistent services that the dealer will try to add to help him make his boat payment. The manufacturer has a sticker on the window. Any additional sticker with additional items or charges listed is ADP. If they insist on anything like this, take a hike - they are not honest people and you do not want to do business with them.

That being said, what's a reasonable amount for the dealer to make on the vehicle? Much depends on the dealership - where it is, what its overhead is, how many vehicles they've sold recently - basically, how motivated are they to sell a car and for how little are they willing to sell it. This could be a few hundred or a few thousand dollars, depending on lots of variables. Give all this some thought, and arrive at a reasonable number ... one which allows them a profit, but not a HUGE profit. This is YOUR bottom line.

The rest is negotiation. Armed with your research, make your offer. If they are unwilling to work with you, move on down the street, making sure they understand that you are willing to pay what you've offered, but THEY have chosen to not sell a car today. Don't be afraid to walk if they won't deal. Someone will sell you the car you want for a reasonable price - they just don't want it to be them. Don't be intimidated.

Last, don't be drawn in by the "how much can you afford to pay each month?" game. Agree on the price at which you'll buy the car before you even start to think about financing, or you're likely to get fleeced.

It's best, of course, to pay cash for the car (if you have it), but if not, line up financing with your bank or credit union BEFORE you step into the first dealership. Know what financing is going to cost you. Once you've arrived at the best price for the car, you can listen to their offers for financing. Make sure it beats the one you already have before considering it.

You can save SIGNIFICANT money if you're willing to do the work that most people either don't know or don't bother to do.

Best of luck, and I hope you get the car you want for a price you can live with.

Answer 2

There are plenty of websites that list the dealers cost of each model on the floor. That may not necessarily be the price the dealer paid for the car, but its a beginning. (Many car companies offer dealer incentives on certain models from time to time, that lower the cost. In addition, there are quarterly volume rebates given back to the dealer, based on how many cars he has sold.)
Two negotiating points are critical. Have the dealer cost information, and begin the conversation with you understand the dealers need to make a profit. The dealer neds to know that you are serious as well. Explain that you plan on purchasing a car within the next 3 days. That if you can reach an agreement, that you will buy today. Then they know you are serious. Also remember that dealers are more anguish to sell a car at the end of a quarter (3/31, 6/30, 9/30, 12/31) to qualify for the rebates mentioned before. Negotiate for a cash sale only. Dealer financing is a profit center, and often they will try to entice you by offering a low price with dealer financing. You should get your financing in place before you go to the dealer. (E-loan is a perfect website). The bank will approve you for a $ amount, and mail you a check to be made out to any dealer in any amount up to what they have approved you for. Now that you have the money, begin negotiating at the Dealer cost. Most MSRP on new cars is in the 25% -30% markup. Unless you are buying a very popular car, you should be able to get the car for 10-20% under MSRP. (Toyotas have the lowest margin by the way, so expect less of a discount on Toyotas.
Good luck

Answer 3

You'll never get that price. Kelly bluebook is run by the auto dealerships too, really. I've bought over 10 New and used cars over the last 10 years so I know how to deal with them. Buy or borrow a book for the library called "how to buy a car" there are many ones written by former car salesmen that go into detail and give you all the ins and outs. It's to much to go into here or with an article, the book i read was short ~ 150 pages and funny too. check it out.


btw, all these people telling you that consumer reports this, kelly blue book that don't know the real story. those sites and books are good as a reality check in process with alot of other things but don't rely on them. If you do, they'll just fleece you. Read the book(s).

Answer 4

The dealer paid less than 30% of the advertised price. Start from there and work up. Major factor is Pay Cash. Dealer is gonna make a profit, and makeing the best or biggest profit is the idea of a sale. That is economics 101. The dealer does have a set price that they are allowed by the Manufacture to sell the item for, so it doesnt get any better than that no matter how much haggle and sex you offer.
Best absolute best price, is if you have the car Built for you at the factory, (bypass the dealer) you get a custom car that will have a much higher resale.
offer sex is still best price markup or down one can hope for.

Answer 5

You bargain up from the dealer invoice. Go to the bookstore
and in the magazine section you'll find the Consumer Guide car test magazine. It costs 10 dollars, and is worth every penny. It tells you what the dealer paid for the car, including every option. It reviews the car by breaking it down into 10 categories. Always bargain up from dealer invoice to get the best price.

Answer 6

First of all....

keep in mind the dealership HAS TO MAKE MONEY....or they can not stay in business.
People try to make this process WAY TOO COMPLICATING!!!
Simplify...do some research....see what prices are out there...check various websites...Auto Trader....etc...

People think for some reason if you are agressive you will get a better deal...NONESENSE....be polite...be upfront.

How much the dealer paid for the car in reality is not your business. Number one...if you are looking at a new car the dealer invoice does not usually refelct the actual purchase price anyhow...most cars comes with incentive programs and bonuses for the dealer so really its a fictitous number anyhow.

What you need to do is like I said before...do some research....see what the car is selling for aounnd you...make an offer that YOU ARE HAPPY WITH...and buy it....you will NEVER GET A CAR FOR COST or BELOW COST....they have to make money or they have no need to sell you the vehicle!!

Be reasonable in your offer....dont offer 15000$ for a 25000$ vehicle because they will not even bargain with you. Most places these days will accept any reasonable offer.....JUST BE REASONABLE.

Another thing...are you financing the car?...or are you buying it for cash?....if you are buying it for cash or financing it at YOUR OWN bank...DO NOT TELL THEM THAT!!!....that is NOT (I reapeat) NOT A BARGAINING CHIP!!....Dealers make money on financing as well...and some times you will get a car at or near actual cost because they will be making a reserve or commission from the bank they are financing you at....so BARAGAIN YOUR PRICE and do not use the cash card....because that will hurt your negotiations.....

I should know....I own a dealership!!!

Answer 7

Car salesman major in B.S., so just get right to the point. I'm not sure how to find out what they paid for the car, and I doubt they'd be honest with you, so do your homework first and find out how much the car is worth, and bet that they paid alot less than that.

It's also helpful to know the VIN of the car and get a carfax report. It's only around 25.99 for unlimited access on multiple vehicle info for six months, so if you're car shopping, it's worth it.

There are other little tricks I've learned. Dress very modestly when you go into a car place. Salesman look for women/men who are dressed very nicely and expensively and badger them to buy pricier cars.

Also, and probably most importantly - be willing to walk away. If you have a set amount in mind that you can afford (that is reasonable), and they won't meet that number - I PROMISE you that if you say "Well, thanks for your time" and get up, they will come back with: "Wait, let me go talk to my manager and see what I can do..."

I've tried this over and over and over again, and it has worked time and time again. NEVER EVER be afraid to get up and walk away. They want to make a sale as bad as you want a car.

Answer 8

Before you go buy, decide what kind of car you want to buy. Call your insurance agent to find out the top dollar they will insure the car for and amount of the premiums. Go on line with bluebook.com to find out what the vehicle is worth. Don't pay anymore than the insurance company will insure the car for, because if you wreck and total the car, you would be left owing money on the car after the insurance paid off on the wreck. Offer to buy the car below what bluebook and the insurance company says it's worth and don't go over what it is worth. Good luck!

Answer 9

OK asking for the best deal really isn't helping you at all. You need to ask them for the invoice of the car that you are interested in. They should give this to you. Then offer a fair amount above their purchase price. It is not that hard, But be nice they want to sell to you but they don't have to.

Answer 10

Most dealers will not show you the invioce price, which is what they paid for the car. Figuring that their markup is about is close to the MSRP, deduct about 25% from the MSRP, and use this as a starting figure for bargaining.