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Final Sale Price
Final Trade In Value
Dealer Fees, Dealer Doc Fees
Confirmed Financing Interest Rate
Just the sale price alone doesn't mean much, you'll need all these to evaluate each offer.
Talk to a few bank/cred unions BEFORE talking to the dealer financing dept. Find the best rate you can get on your own first.
Be prepared for the dealer to sell add-on warranty in the sell price negotiation or in financing phase. If you plan on keeping the car for a very long time, it might be worth it depending on cost. Most often the mfg new car warranty is completely fine, 100% fine if you'll trade it in 50K or still under the mfg warranty.
Personally I like Honda/Acura, Toyota/Lexus. Acura TSX & TSX wagon are fine Japan imported cars. Acura hit a home run with the new RDX as well, might want to check that model out.
the above is very solid advice.....dealers "make money" on someone when they break them down from an educated buyer to either a price buyer or a payments buyer instead of a smart buyer being BOTH
you negotiate the PRICE of the car first and foremost.....after all how can someone know what your payments will be on a car when they have not even told you what that car cost?
you need to have already shopped with your local credit union and your bank to know what the best interest rate is that you can get.....then you need a small spread sheet (or the ability to do some math in your head which you should have as an ENGINEER) for what a particular price of a car will equal in payments for a particular number of payments (5 years and NEVER go over 5 years) at a particular interest rate (the best interest rate you got from your bank or credit union
then you FIRST negotiate the price of the car PERIOD......do not discuss payments AT ALL until you have settled on a price of the car.....once you have settled on the price of a car make sure all TT&L is included in that price
Tax in Texas in a car sale is 6.25%.......title fees should be about 50-70 dollars depending on your county....Title fees are usually about $30 (yes the dealer should maybe make $10-20 for saving you the time and effort of doing it yourself)
so on a 30K car you would be looking at about 30K X .0625 = $1875 + registration sticker $70 + Title fee $30 + maybe $20 for the dealer providing the "service" of titling and registering your car so TT&L should = about $2,000 max......"dealer prep" = kiss my ass and should be negotiated in the overall price of the car NOT accepted as an add on fee after negotiation of the price of the car......so you settle on the price of the car including all the dealer BS.......say it is $30,000......you add on the legit taxes above, you add on the legit registration (one of the 2 stickers on the windshield along with the inspection sticker) and you add in the legit fee to title the car in your name (you can contact your county to see what the actual registration cost and the title cost are) and the perhaps $20 MAX for the dealer providing that "service".......so you are at $31,995 using the above numbers....subtract your down payment (say it is $1,995) and you are financing $30,000
run this through your spread sheet with the best interest rate you found for a 5 year payment (or 4 or 3 if that is what you prefer) and you will have your monthly payment
THEN once you have the best monthly payment in mind you can start to negotiate monthly payments/interest rates with a dealer.....and ONLY then.....and very often a deal can and will be able to beat an interest rate especially a dealer that is in an area filled with people with good credit because they will have a good rep with their lenders
a 5 year loan on 30K for a car will run from 566 per month at 5% to 795 per month at 20%
so if you can get 6% from your bank or credit union and you are looking at 580 per month and the dealer comes back with 572 per month then they have beat that interest rate of 6%.....MAKE SURE it is still for 5 years (60 months) and they have not changed that number to 72
so you have negotiated the price like you are paying cash.....you KNOW the best interest rate you can get.....and you know what that equals in monthly payments.....so you can then negotiate interest rates/payments
again DO NOT allow any additional dealer prep, finance fees, or the like to be added on in the "business" of F&I office.....the price you have negotiated and the TT&L that you KNOW what it will cost because those are set by the state (tax rate) and county (registration cost and title fee) and the $20 MAX you will allow the dealer to take care of the title and registration for you is SET....along with the PRICE you negotiated and the down payment....so it should be simple straight forward math.....until they try and add on more fees and the like which of course is when you promptly get up and HEAD FOR THE DOOR
or that is when you promptly tell them you are no longer going to give them the option of financing for you and you are prepare to use your pre-approved outside financing and you will be cutting them a check for the price negotiated + the fixed TT&L + the 10-20 dollars you will let them make for filing the title and registration
if you have a trade in then the process starts with setting the price on the trade in.....once that price is set IT IS SET IN STONE......NEVER open that price back up PERIOD.......once you decide on a trade in price if you are new at negotiating on cars then you tell them "this is the trade in value we have agreed upon and now I am treating it like a down payment and I am now going to negotiate the price of the new car NOT INCLUDING THE TRADE IN".....and you negotiate the price of the new car as if you have no trade in.....do not let them start to mix it up.....if things get mixed up or you feel confused....HEAD FOR THE DOOR!........after you have the price of the actual new car......you subtract the value of the trade in from that price.....you subtract the additional cash down payment and add in the TT&L and you have the amount you are financing and you then start to negotiate interest rates and payments
the tax on the car will be the price AFTER any rebated ect.....do not let them ********* on this.....if the price you have agreed upon is 30,000 and that includes a 5,000 rebate then the tax is on 30K NOT 35K.....do not let them tax you on 35K....the car was sold for 30K because the rebate is OFF THE SALES PRICE
so if you have a 5K trade in, a 5k down payment in cash and you negotiate the price of the car to 30K.......you will have 30K + 1995 for TT&L (all set fees except the $20 MAX you are allowing them to make for taking care of the title and registration) so you are at 31,995 and then you subtract 5K for the trade and 5K for cash down payment and you are at 21,995 that you will be financing and then you negotiate interest rates/payments knowing what 22k (21995) will equal in 3, 4, or 5 year payments what ever term you want to go with at the interest rate you have been pre-approved for at your bank or credit union
ONCE TRADE IN VALUE AND CAR PRICE ARE SET AND YOU ARE AT INTEREST AND PAYMENTS NEVER LET THEM BRING TRADE IN OR CAR PRICE BACK INTO THE NEGOTIATIONS OR DOWN PAYMENT....IF THEY DO HEAD FOR THE DOOR
IT IS A STEP BY STEP PROCESS PERIOD....once they mix trade value, down payment, number of years, down payment, or car price back into the mix YOU WILL GET SCREWED PERIOD!!!
I realize the above is LONG WINDED.....and the fact that many Americans can't take the time to read, understand, and follow the above advice is the reason that a huge % of Americans get screwed every single day of the year on buying a car (for most of them the second largest purchase they make)
it is too long of a process for them, their ADD kicks in, their kids get hungry (what idiot brings their kids along for a final negotiation unless their kids are the type that can watch and learn instead of act up and throw off mom and dad to the benefit of the sales team) and at the end of the day they walk out paying 32K for a car they could have payed 30K for, they get 4K for a trade in they could have sold for cash in a day for 5K, they get hooked up with a 7.9% interest rate for 6 years (when they could have gotten 5% from their bank easy) and they are happy because their monthly payments are $550 when they were willing to go to $575......but of course that $575 was for 5 years not 6 and they were screwed on the trade in, the sales price, and the interest rate and oh yea they tossed in $500 more cash at the very end to "get there" and they got chumped on the sales taxes because of how the dealer treated the rebate towards the sales price so they were clipped for another 300+ dollars
they probably got chumped for 4k to 5k overall VS what actually taking their meds, doing their homework, sitting down and going through a process, and standing firm on how THEIR negotiations were going to go would have saved them overall
HAVE OUTSIDE FINANCING IN HAND AND BE PREPARED TO USE IT
KNOW WHAT MONTHLY PAYMENTS AT VARIOUS INTEREST RATES EQUAL
NEVER NEGOTIATE NUMBER OF MONTHS OR YEARS FINANCED UNLESS YOU ARE HIGHLY CAPABLE
SET TRADE IN PRICE
NEGOTIATE CAR PRICE WITHOUT TRADE IN INCLUDED UNLESS HIGHLY CAPABLE....THE TRADE IN IS TREATED AS DOWN PAYMENT ONCE VALUE IS SET
NEVER NEGOTIATE CASH DOWN PAYMENT WHILE NEGOTIATING CAR PRICE....YOUR DOWN PAYMENT (AND TRADE IN VALUE) NEED NOT HAVE ANY BEARING ON SALES PRICE OF THE NEW UNIT PERIOD
KNOW STATE TAXES AND KNOW HOW TO CALCULATE THEM.....KNOW WHAT THE SALES PRICE IS VS REBATED ECT
KNOW COUNTY REGISTRATION AND TITLE FEE (for the county you live in or where the car will be titled)
AFTER ALL OF THE ABOVE IT IS MONTHLY PAYMENT AND INTEREST RATE TIME AND NEVER BEFORE
DOUBLE CHECK ALL NUMBERS...SALES PRICE, TRADE IN VALUE, MONTHLY TERM, INTEREST RATE, CASH DOWN PAYMENT, TTL.....IF SOMETHING IS FUNNY HIT THE DOOR
DO NOT GO FOR THE EXTENDED WARRANTY AT TIME OF NEW CAR PURCHASE PERIOD....THESE CAN ALWAYS BE PURCHASED LATER FROM THE DEALER OR FROM A REPUTABLE COMPANY AND ALWAYS DO HOMEWORK ON WHAT AFTER MARKET OR EXTENDED WARRANTY COMPANY IS REPUTABLE...the warranty is just yet another thing you have to negotiate when you have already done 99% of the work.....decline it over and over and get it another day after you have recuperated
NEVER ALLOW FEES TO BE ADDED IN THE F&I OFFICE IF THEY TRY IT HIT THE DOOR PERIOD
if the above is too complex, too long winded, too much info or TL,DNR then good luck paying 3-4K too much for a new car over the life of the car if not more
Quote:
Originally Posted by Texascrude
One more tip to add: Buy it used from a 3rd party. Ever wonder why dealership owners usually have more money than they know what to do with? It's because they're ripping you off. Every. Single. Time. You may know friends who thought they got a good deal, but guess what... they didn't! If it was a good deal for the customer the dealer wouldn't have made it... they will only sell you the car if they're making a good amount of money off you. Yes, this goes for their used cars too. Check Craigslist, find a good car, take it to a mechanic to be checked out and you'll save yourself at least a few thousand bucks.
As a single professional in your 20's you should be saving every dime you can find for some combination of starting a family, buying a house, going back go graduate school, retirement, paying off student loans, etc.
this is actually very incorrect.....new cars have a very very low markup/REAL PROFIT per unit usually about about 150 to 300 per unit on average....sure there are the home runs, but dealers make their real profits on service and on financing.....financing is NOT the same as the sales price of a car or the profit on a car.....the fact that people allow themselves to be either payment or price buyers instead of being BOTH is why dealers can make more than 150 to 300 dollars per new car sale, but the reality is the profit on moving the actual unit is VERY VERY LOW....so low that no other industry would even put up with that profit margin
and many car lot owners have made their real money on the under lying value of their real estate as well VS actually running the dealership....overall even with new sales, financing, and service dealership % profits VS investment is a HORRIBLE return on investment especially today and no investor that is not already in the car business would even consider that return on investment especially since real estate is not inflating like it did before 2008
used car sales are also a large money makes which is why you see so many new car dealers starting used car lots independent of their actual dealerships and located away from their new car dealerships
so you are 100% incorrect that a dealer makes huge money on a new car sale on average....on average they make so little money it is barely worth their time without the financing, service, used sales, body shop, and the like
Do you drive a BMW? 9 years without dealership service? Good job on maintenance! I thought about getting a used BMW or Benz but the maintenance cost scared me away..
My dad drove a BMW 530i back in the 90s when warranty expires, his cost was in the 1000s. Granted he was getting excellent service by the GM who was driving his car to shop and driving back to his home which made him keep the car until he totalled it. My boss' pay 1000s for his Benz repairs, except he doesn't care. BMW makes great cars, when you drive 80 mph, it feels like 60 mph, but just not for me. My Nissan is 9 years old (driving an easy commute) and I have never been to the dealership for service for any recalls. I follow the maintenance schedule on the car's manual, do it myself, or let my cousin (a mechanic) do it. One of the best dealer service besides changing oil is pumping tires to the car which a lot of people don't do. The way I drive (too slow), the way I spend (on family) and the way I want to leave the job force at my choice, high-end car isn't for me.
Thank you very much for your long and patient reply. I'll keep on refer to your advice in mind.
I was in a rush to get a new car since the insurance on my old car expired today and my car was in bad condition (front hood changed shape and could not be open) but ran smoothly with no problem, still have 2k to go for next oil change which i think is the time allowance for me to choose the new vehicle.
I renewed the insurance with the cheapest available.
I will carefully get prepared following your advice before my first big purchase (I'm kinda fresh outta of school).
Again, thanks for your advice.
Quote:
Originally Posted by TexasVines
the above is very solid advice.....dealers "make money" on someone when they break them down from an educated buyer to either a price buyer or a payments buyer instead of a smart buyer being BOTH
you negotiate the PRICE of the car first and foremost.....after all how can someone know what your payments will be on a car when they have not even told you what that car cost?
you need to have already shopped with your local credit union and your bank to know what the best interest rate is that you can get.....then you need a small spread sheet (or the ability to do some math in your head which you should have as an ENGINEER) for what a particular price of a car will equal in payments for a particular number of payments (5 years and NEVER go over 5 years) at a particular interest rate (the best interest rate you got from your bank or credit union
then you FIRST negotiate the price of the car PERIOD......do not discuss payments AT ALL until you have settled on a price of the car.....once you have settled on the price of a car make sure all TT&L is included in that price
Tax in Texas in a car sale is 6.25%.......title fees should be about 50-70 dollars depending on your county....Title fees are usually about $30 (yes the dealer should maybe make $10-20 for saving you the time and effort of doing it yourself)
so on a 30K car you would be looking at about 30K X .0625 = $1875 + registration sticker $70 + Title fee $30 + maybe $20 for the dealer providing the "service" of titling and registering your car so TT&L should = about $2,000 max......"dealer prep" = kiss my ass and should be negotiated in the overall price of the car NOT accepted as an add on fee after negotiation of the price of the car......so you settle on the price of the car including all the dealer BS.......say it is $30,000......you add on the legit taxes above, you add on the legit registration (one of the 2 stickers on the windshield along with the inspection sticker) and you add in the legit fee to title the car in your name (you can contact your county to see what the actual registration cost and the title cost are) and the perhaps $20 MAX for the dealer providing that "service".......so you are at $31,995 using the above numbers....subtract your down payment (say it is $1,995) and you are financing $30,000
run this through your spread sheet with the best interest rate you found for a 5 year payment (or 4 or 3 if that is what you prefer) and you will have your monthly payment
THEN once you have the best monthly payment in mind you can start to negotiate monthly payments/interest rates with a dealer.....and ONLY then.....and very often a deal can and will be able to beat an interest rate especially a dealer that is in an area filled with people with good credit because they will have a good rep with their lenders
a 5 year loan on 30K for a car will run from 566 per month at 5% to 795 per month at 20%
so if you can get 6% from your bank or credit union and you are looking at 580 per month and the dealer comes back with 572 per month then they have beat that interest rate of 6%.....MAKE SURE it is still for 5 years (60 months) and they have not changed that number to 72
so you have negotiated the price like you are paying cash.....you KNOW the best interest rate you can get.....and you know what that equals in monthly payments.....so you can then negotiate interest rates/payments
again DO NOT allow any additional dealer prep, finance fees, or the like to be added on in the "business" of F&I office.....the price you have negotiated and the TT&L that you KNOW what it will cost because those are set by the state (tax rate) and county (registration cost and title fee) and the $20 MAX you will allow the dealer to take care of the title and registration for you is SET....along with the PRICE you negotiated and the down payment....so it should be simple straight forward math.....until they try and add on more fees and the like which of course is when you promptly get up and HEAD FOR THE DOOR
or that is when you promptly tell them you are no longer going to give them the option of financing for you and you are prepare to use your pre-approved outside financing and you will be cutting them a check for the price negotiated + the fixed TT&L + the 10-20 dollars you will let them make for filing the title and registration
if you have a trade in then the process starts with setting the price on the trade in.....once that price is set IT IS SET IN STONE......NEVER open that price back up PERIOD.......once you decide on a trade in price if you are new at negotiating on cars then you tell them "this is the trade in value we have agreed upon and now I am treating it like a down payment and I am now going to negotiate the price of the new car NOT INCLUDING THE TRADE IN".....and you negotiate the price of the new car as if you have no trade in.....do not let them start to mix it up.....if things get mixed up or you feel confused....HEAD FOR THE DOOR!........after you have the price of the actual new car......you subtract the value of the trade in from that price.....you subtract the additional cash down payment and add in the TT&L and you have the amount you are financing and you then start to negotiate interest rates and payments
the tax on the car will be the price AFTER any rebated ect.....do not let them ********* on this.....if the price you have agreed upon is 30,000 and that includes a 5,000 rebate then the tax is on 30K NOT 35K.....do not let them tax you on 35K....the car was sold for 30K because the rebate is OFF THE SALES PRICE
so if you have a 5K trade in, a 5k down payment in cash and you negotiate the price of the car to 30K.......you will have 30K + 1995 for TT&L (all set fees except the $20 MAX you are allowing them to make for taking care of the title and registration) so you are at 31,995 and then you subtract 5K for the trade and 5K for cash down payment and you are at 21,995 that you will be financing and then you negotiate interest rates/payments knowing what 22k (21995) will equal in 3, 4, or 5 year payments what ever term you want to go with at the interest rate you have been pre-approved for at your bank or credit union
ONCE TRADE IN VALUE AND CAR PRICE ARE SET AND YOU ARE AT INTEREST AND PAYMENTS NEVER LET THEM BRING TRADE IN OR CAR PRICE BACK INTO THE NEGOTIATIONS OR DOWN PAYMENT....IF THEY DO HEAD FOR THE DOOR
IT IS A STEP BY STEP PROCESS PERIOD....once they mix trade value, down payment, number of years, down payment, or car price back into the mix YOU WILL GET SCREWED PERIOD!!!
I realize the above is LONG WINDED.....and the fact that many Americans can't take the time to read, understand, and follow the above advice is the reason that a huge % of Americans get screwed every single day of the year on buying a car (for most of them the second largest purchase they make)
it is too long of a process for them, their ADD kicks in, their kids get hungry (what idiot brings their kids along for a final negotiation unless their kids are the type that can watch and learn instead of act up and throw off mom and dad to the benefit of the sales team) and at the end of the day they walk out paying 32K for a car they could have payed 30K for, they get 4K for a trade in they could have sold for cash in a day for 5K, they get hooked up with a 7.9% interest rate for 6 years (when they could have gotten 5% from their bank easy) and they are happy because their monthly payments are $550 when they were willing to go to $575......but of course that $575 was for 5 years not 6 and they were screwed on the trade in, the sales price, and the interest rate and oh yea they tossed in $500 more cash at the very end to "get there" and they got chumped on the sales taxes because of how the dealer treated the rebate towards the sales price so they were clipped for another 300+ dollars
they probably got chumped for 4k to 5k overall VS what actually taking their meds, doing their homework, sitting down and going through a process, and standing firm on how THEIR negotiations were going to go would have saved them overall
HAVE OUTSIDE FINANCING IN HAND AND BE PREPARED TO USE IT
KNOW WHAT MONTHLY PAYMENTS AT VARIOUS INTEREST RATES EQUAL
NEVER NEGOTIATE NUMBER OF MONTHS OR YEARS FINANCED UNLESS YOU ARE HIGHLY CAPABLE
SET TRADE IN PRICE
NEGOTIATE CAR PRICE WITHOUT TRADE IN INCLUDED UNLESS HIGHLY CAPABLE....THE TRADE IN IS TREATED AS DOWN PAYMENT ONCE VALUE IS SET
NEVER NEGOTIATE CASH DOWN PAYMENT WHILE NEGOTIATING CAR PRICE....YOUR DOWN PAYMENT (AND TRADE IN VALUE) NEED NOT HAVE ANY BEARING ON SALES PRICE OF THE NEW UNIT PERIOD
KNOW STATE TAXES AND KNOW HOW TO CALCULATE THEM.....KNOW WHAT THE SALES PRICE IS VS REBATED ECT
KNOW COUNTY REGISTRATION AND TITLE FEE (for the county you live in or where the car will be titled)
AFTER ALL OF THE ABOVE IT IS MONTHLY PAYMENT AND INTEREST RATE TIME AND NEVER BEFORE
DOUBLE CHECK ALL NUMBERS...SALES PRICE, TRADE IN VALUE, MONTHLY TERM, INTEREST RATE, CASH DOWN PAYMENT, TTL.....IF SOMETHING IS FUNNY HIT THE DOOR
DO NOT GO FOR THE EXTENDED WARRANTY AT TIME OF NEW CAR PURCHASE PERIOD....THESE CAN ALWAYS BE PURCHASED LATER FROM THE DEALER OR FROM A REPUTABLE COMPANY AND ALWAYS DO HOMEWORK ON WHAT AFTER MARKET OR EXTENDED WARRANTY COMPANY IS REPUTABLE...the warranty is just yet another thing you have to negotiate when you have already done 99% of the work.....decline it over and over and get it another day after you have recuperated
NEVER ALLOW FEES TO BE ADDED IN THE F&I OFFICE IF THEY TRY IT HIT THE DOOR PERIOD
if the above is too complex, too long winded, too much info or TL,DNR then good luck paying 3-4K too much for a new car over the life of the car if not more
this is actually very incorrect.....new cars have a very very low markup/REAL PROFIT per unit usually about about 150 to 300 per unit on average....sure there are the home runs, but dealers make their real profits on service and on financing.....financing is NOT the same as the sales price of a car or the profit on a car.....the fact that people allow themselves to be either payment or price buyers instead of being BOTH is why dealers can make more than 150 to 300 dollars per new car sale, but the reality is the profit on moving the actual unit is VERY VERY LOW....so low that no other industry would even put up with that profit margin
and many car lot owners have made their real money on the under lying value of their real estate as well VS actually running the dealership....overall even with new sales, financing, and service dealership % profits VS investment is a HORRIBLE return on investment especially today and no investor that is not already in the car business would even consider that return on investment especially since real estate is not inflating like it did before 2008
used car sales are also a large money makes which is why you see so many new car dealers starting used car lots independent of their actual dealerships and located away from their new car dealerships
so you are 100% incorrect that a dealer makes huge money on a new car sale on average....on average they make so little money it is barely worth their time without the financing, service, used sales, body shop, and the like
I was in a rush to get a new car since the insurance on my old car expired today and my car was in bad condition (front hood changed shape and could not be open) but ran smoothly with no problem, still have 2k to go for next oil change which i think is the time allowance for me to choose the new vehicle.
When buying a car, don't rush. Great choice on going with the cheapest insurance on your 99 Corolla, value too low to buy full coverage. You should start selling your car, if you plan to keep one car because the dealership will not give you much for it. Look for year-end models, or buy around at the end of each months. Dealers usually have to meet quotas. Good Luck!!
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