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Dunno what the article pointed out but all car buying services from big banks / companies are setup to make you feel like you got a fair deal when in reality your getting hosed. They get paid by car mfrs and dealers so they are in effect working for dealers/mfrs.
You can negotiate most all new cars down 15-20% off the invoice price if you contact enough dealers and can stand firm on your price. Look at Truecar stats. At least some of the people are getting that 15-20% off the invoice price, while the avg paid is usually about 2% or so off the invoice.
So the link basically says Costco will generally get you within $500 of the best possible deal on a car. Although that is not the best possible deal, I suspect it is better than what most people get when they walk in and negotiate on their own. In that regard, I would say the Costco program is worthwhile for most people.
Of course, individual results will otherwise vary too. Especially when a trade is involved in the deal, allowing the dealer to try and boost their profit by undervaluing the trade in.
Costco is the middleman who introduces you to the dealers to battle for your business. Costco gets paid by the dealers on a contractual basis of a monthly fee. You're a fish, and the dealer is a fisherman. Costco is the bait and the fishing rod.
So the link basically says Costco will generally get you within $500 of the best possible deal on a car. Although that is not the best possible deal, I suspect it is better than what most people get when they walk in and negotiate on their own. In that regard, I would say the Costco program is worthwhile for most people.
Of course, individual results will otherwise vary too. Especially when a trade is involved in the deal, allowing the dealer to try and boost their profit by undervaluing the trade in.
I agree. I'd wager most people (myself included) could not get within $500 of best price.
I agree. I'd wager most people (myself included) could not get within $500 of best price.
What do they do about trade ins?
I disagree. Its simple.
Don't trade a car in. Sell it yourself.
Don't talk to a dealer about payments. Negotiate the total price only.
Unless your going for 0% financing, get your loan in advance from a credit union. Even if the dealer offers 0% its often worth it to take a cash back and apply it to the vehicle and go with a low interest rate loan from a credit union rather than 0% from a dealer.
Take the invoice price and take 20% off. Thats your target for a great deal. 15% is a good deal. 10% is minimum, might be necessary for a select few high demand cars, and its better than what most people pay and its better than what a car buying service is going to get you generally.
Call the dealer and speak to the internet sales desk. Tell them you already have a loan approved and do not intend to trade anything in. Ask them for the best deal on the model your interested in. Insist on the 20% off price and don't budge. Get them as low as possible. If they don't get low enough then call another dealer. Repeat until you find one that will. Its simply a matter of willingness to spend some time calling and perhaps some travel if you can't find a dealer locally.
Its worth it to catch a plane and drive the car back to save several thousand dollars. So expand your search out to large cities within an afternoon or days drive away.
You have to keep trying until you find a dealer that needs the sales. End of month, end of quarter is usually the best times.
Keep an eye on sites like autotrader etc. Look for the dealers that are pricing the new car lower than anyone else. This is the easiest way to quickly locate a dealer needing some sales. Don't restrict your search by color, just look for same year, make, model, trim. Even if the dealer doesn't have the color you want they can usually get it quickly. So ignore color until you are actually talking to the dealer.
Trading a car in is almost always a bad choice. If you don't feel like selling it yourself, you probably have a friend or a family member that loves selling things. Let them do it for a few hundred bucks.
Of course all this takes some time. If you simply have to get a new car immediately then your only going to be able to do so much. If you spend a few months though you can save some real money.
Don't talk to a dealer about payments. Negotiate the total price only.
Unless your going for 0% financing, get your loan in advance from a credit union. Even if the dealer offers 0% its often worth it to take a cash back and apply it to the vehicle and go with a low interest rate loan from a credit union rather than 0% from a dealer.
Take the invoice price and take 20% off. Thats your target for a great deal. 15% is a good deal. 10% is minimum, might be necessary for a select few high demand cars, and its better than what most people pay and its better than what a car buying service is going to get you generally.
Call the dealer and speak to the internet sales desk. Tell them you already have a loan approved and do not intend to trade anything in. Ask them for the best deal on the model your interested in. Insist on the 20% off price and don't budge. Get them as low as possible. If they don't get low enough then call another dealer. Repeat until you find one that will. Its simply a matter of willingness to spend some time calling and perhaps some travel if you can't find a dealer locally.
Its worth it to catch a plane and drive the car back to save several thousand dollars. So expand your search out to large cities within an afternoon or days drive away.
You have to keep trying until you find a dealer that needs the sales. End of month, end of quarter is usually the best times.
Keep an eye on sites like autotrader etc. Look for the dealers that are pricing the new car lower than anyone else. This is the easiest way to quickly locate a dealer needing some sales. Don't restrict your search by color, just look for same year, make, model, trim. Even if the dealer doesn't have the color you want they can usually get it quickly. So ignore color until you are actually talking to the dealer.
Trading a car in is almost always a bad choice. If you don't feel like selling it yourself, you probably have a friend or a family member that loves selling things. Let them do it for a few hundred bucks.
Of course all this takes some time. If you simply have to get a new car immediately then your only going to be able to do so much. If you spend a few months though you can save some real money.
I'd add with the bold statement above to call about five dealerships. Ask them what their best price would be. Whoever has the lowest price, go back and through your list of dealers and ask them to beat that lowest price. Basically, last dealership standing wins.
Don't talk to a dealer about payments. Negotiate the total price only.
Unless your going for 0% financing, get your loan in advance from a credit union. Even if the dealer offers 0% its often worth it to take a cash back and apply it to the vehicle and go with a low interest rate loan from a credit union rather than 0% from a dealer.
Take the invoice price and take 20% off. Thats your target for a great deal. 15% is a good deal. 10% is minimum, might be necessary for a select few high demand cars, and its better than what most people pay and its better than what a car buying service is going to get you generally.
Call the dealer and speak to the internet sales desk. Tell them you already have a loan approved and do not intend to trade anything in. Ask them for the best deal on the model your interested in. Insist on the 20% off price and don't budge. Get them as low as possible. If they don't get low enough then call another dealer. Repeat until you find one that will. Its simply a matter of willingness to spend some time calling and perhaps some travel if you can't find a dealer locally.
Its worth it to catch a plane and drive the car back to save several thousand dollars. So expand your search out to large cities within an afternoon or days drive away.
You have to keep trying until you find a dealer that needs the sales. End of month, end of quarter is usually the best times.
Keep an eye on sites like autotrader etc. Look for the dealers that are pricing the new car lower than anyone else. This is the easiest way to quickly locate a dealer needing some sales. Don't restrict your search by color, just look for same year, make, model, trim. Even if the dealer doesn't have the color you want they can usually get it quickly. So ignore color until you are actually talking to the dealer.
Trading a car in is almost always a bad choice. If you don't feel like selling it yourself, you probably have a friend or a family member that loves selling things. Let them do it for a few hundred bucks.
Of course all this takes some time. If you simply have to get a new car immediately then your only going to be able to do so much. If you spend a few months though you can save some real money.
Do you have a list of car makes that you feel this is possible to achieve? Are you assuming the dealership is being liquidated, or are you including factory rebates in your figure? If you are including rebates, then there is no sense in calling around for months, you just wait for the rebates.
Locally, even a new car from two model years ago won't be sold for 20% off of invoice, without rebates making up the bulk of the discount.
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