I'm test driving an S that's loaded, 95% of what I like except color. Thinking about bending on that for the right deal.

I already have a USAA commitment for $1500 over invoice at another dealer, but they don't have this car.

Also taking my 08 in to see what they'd offer in trade. Had a small parking lot ding, so I'm sure that will send down price a little.

If dealer will only go so far in money, what else should I ask for? Deal on extended maintenance? Is there a factory extended warranty? What else?

 

When I bought the wifey's BMW 328i the dealer honored the USAA price even though he wasn't listed as a participating dealer. Make sure you know what your trade is really worth (wholesale) and be prepared to fight for a good deal or sell your car elsewhere. Your only real weapon is your ability to walk away if you don't like the negotiations. Good luck.

 

Don't down-grade your car; present it as a gem.
Clean it deeply; remove all the personal items from it.
You'll be amazed of the reaction of a well-appreciated clean vehicle for trade-in appraisal.

- Erik

 

Okay.. Long response here... Call it "Cary's Car Sales Survivor Guide".

Firstly, trade is a common mistake. First way dealers profit significantly from you. You truly are better off selling on your own so you take advantage. Would actually recommend you wait, sell yours first, and then walk in knowing you have extra money to work with.

Second, what you should do depends on your goal and PATIENCE. If you walk in knowing you have the cash to pay for it all, you really have options. If you plan on financing, you still have some great options. For either scenario, this is where your money from your recent sale comes in. The key to a good finance depends of course on your FICO score, negotiating a low interest rate (some dealerships are hurting enough that close to 0% financing is available... Nothing better than using other people's money!), and negotiating the elimination of an early pay off penalty (this is where your funds come in).

Dealerships are much more willing to negotiate as soon as you use the word "finance". Negotiating the terms allows you to pay off the car more quickly reducing your costs (remember regardless this is a depreciating asset... Don't spend more than you have to.). Easier to convince them to knock some off the price if they think they're going to profit off you. If you negotiated away the early pay off penalty, you can do so more quickly without fear of a financial hit. As far as your question i've never seen anyone negotiate a better price for the car because of buying an extended service package as it is a third party sale. Haven't tried the warranty angle though because that deals with their service department which is where their real profits are.

Third, wait until the end of the month, actually, when they're more motivated to sell rather than lose some of their own money sitting on the car... Better still go in the middle of the week when salesmen are hungry for a commission... Better still, go on a really crummy day, at the end of the month, in the middle of the week. It's amazing how simple a tactic can save you money.

Fourth, have options. Find an alternative at a competing dealership... Pit them againat each other! This is based on the most important rule of all, DON'T purchase emotionally... You do, you lose -like sharks to the blood. Be willing to walk away! There's always another out there with your name on it.

Fifth, salesmen love to "ask their manager". It's a sales tactic. Let's you sit there and get emotionally attached - excited about the prospect of owning your own new toy to turn the tide to their advantage. It's true salesmen have limited authority to deal (to limit a poor salesman's losses), but it's also true some just go back to chat... Ask them to get you some coffee and a donut while they're at it... May as well make themselves useful! ( ok silly, but illustrates the point to stay focused).

Six, EVERYTHING is negotiable. Don't let them tell you otherwise. Goes back to point four: be willing to walk away. If they feed you that line and won't negotiate with you, tell you the cars are walking off the lot so fast "yours" will be gone before the weeks end, fine, tell them to sell it to someone else then... They just may chase you back at which point you just gained the advantage (they want the sale).... Again, if they use words like that, referring to the car as "yours" they're trying to get you emotionally attached

Last, plan on parking it there at the dealership for at least 3 hours... More is better... Sounds silly, but the more time you spend with them, the more they've invested their sales time on you toward making the sale... I've knocked $15k off my wife's car before spending ALL day at the dealer... Took me 8 hours, but i got it using all these tactics... Made them believe i'd finance with them knocked $3,500 off the price alone (because of the negotiated terms, i turned around and paid it off at the end of the month in that case).

A good tactic is to find an aggressive salesman... They're aggressive because they want the sale... Just the salesman you're looking for! Play-dough for you're molding enjoyment... The most challenging salesmen are those who just seemingly hang back, toss in a few well timed compliments, seem to toss in a few drawbacks (suck you in to a false sense of trust), helpful and charming, but not overly so... If you run into that salesperson, leave and come back some other time to choose your own "opponent" unless you're prepared for the challenge and enjoy doing that. Oh yeah, if you get stressed in car sales situations, relax and have fun!

This should not be interpreted as pessimism, but as a way to minimize you're costs... It's your money afterall! Hope these tips might help you (or anyone else for that matter). Regardless, happy shopping and best of luck getting your toy.

 

As Cary mentioned, you can most likely get more for your current car somewhere else, but that isn't always a black and white distinction as to what is the best move. If the car is owned outright, then definitely look to sell yourself. This gets to be more difficult if the car is financed as the only way to sell it yourself is to have the title in-hand and then having to pay off the bank and wait for weeks for the title to be sent over to you. Not exactly a quick process. If you go to the dealer knowing the wholesale value of your car, you can use the info in your favor. The upside to trading in is that you usually only pay tax on the difference between your trade and the new car. Obviously if the dealer is low-balling your trade by thousands, then its useless, but another tool to be aware of.

Good luck and hope it works out.

 

The good thing is, you're in Birmingham (guessing from your name) as am I, and they are always looking for used Mini's to resell. Bad thing is, there's no other Mini competition so they will act like they don't owe you any favors. Believe me, I have 2 Mini's from MOB and I know how they are. They will undervalue your car and overvalue theirs. I think James (can't remember last name) is the sales manager, and he's a pretty cool guy. He will work with you only if they have a low # of used Mini's on the lot. The paint color schtick will not work on them I don't think.

 

Actually talking with a dealer in Atlanta. It's probably dumb to even consider a vehicle that's not my preferred color but one thing's for sure, it takes some emotion out of the sale. Mine's paid for so I definitely have options.

Walking comes easy for me. It's committing I can't seem to do...

The hideous sales tax in Birmngham (10% for groceries, is it that for cars too?) also comes into play.

Great tips; I really appreciate them.

I'm already assured of a USAA price with a custom order elsewhere so I have options.

 

You will not pay a 10% sales tax. I can't remember what it is
but it is less than that. They will undervalue your trade. They did with
mine. Good luck and have fun!

 

This is the deal I got on my 2011 justa. 1 free option (premium package)
$1000 credit mini USA and 0.9% for 60 months. I put $2500 down and had a trade that they undervalued by $400. I went at end of month and on a Sunday 30 mins before close. That way I cold leverage the sales quota for both the salesman and the sales manager. I ended up keeping them there till 9pm after they had closed at 6pm. The sales guy was through with me and was ready to go home, but sales manager needed another sale to close out his month. So in the end it was the sales manager that made me my deal. Forget about the finance Guy he just wanted to get home and pretty much went easy on me with no hard sell. It was end of March of last year and was the best time to buy. Mini best offers we're in March. Free Option and .09% for 60 months. I was armed with all my numbers, I calculated the payments using my iPad in front of them and I was very patient. I came and went 3 times earlier that day to get them all worked up for the sale. Now that wasn't the best deal, but I was happy and my price was fair. $20,800 after everything. Good luck. Post up when u pull the trigger would like to hear how it went.

 

Actually, that's not completely accurate in all cases. In some states, like NJ, you save significantly on taxes by trading in. You are only taxed on the difference between the new and old vehicle. When trading in vehicles with less than 100K miles, this advantageous since you'll generally save the same amount as if you sold it outright (and didn't have to deal with the hassle of listing it, showing it to people, etc...). With high mileage vehicles where the dealer completely low ***** you, not so much.

I'll agree with your other points though.

 

Maybe I'll drop by CarMax and see what their offer is beforehand.

I have the patience to sell, but a very busy life. I'd sacrifice $1000 for a trade, but certainly not $3000-4000.

 

If you go to car max...you will be disappointed with the price they offer you. They sell many cars under blue book value, so they buy yours for way...way under blue book value...doesnt hurt to bring it to them, just saying i think you will be shocked at how little they offer.

 

If you want to trade-in your car do not let the dealer know this until you have negotiated the price for the new car. They will asked you about a trade up front, just say no and hit them with it at the end of the deal.

Early pay-off penalties, I have never seen this before....does this really even exist anymore.

Kevin

 

Keep in mind these are not ironclad rules that work in all situations or in any specific order, but are rather points to consider when shopping. I personally like to sucker punch them with financing in the end, but it varies from salesperson to salesperson. I let them set the tone to discover what their dealership's financial (i.e. Profit-making) priorities are, and react accordingly.... If they immediately ask about trade ins chances are they make a lot of profit there and therefore (if i were to trade) i would consider holding that card to later to "sweeten" the deal (i usually hint we'll get back to that later, to let me "think about it")... In other words making them feel you're going to, from their viewpoint, hold the best for last just before the sale when what you're really doing is planning the main event

As far as early payoff penalties, yes, they most definitely still exist. Unfortunately, the sad reality is many folks don't read the contracts thoroughly, and get caught by clauses like that; or perhaps glossing over it thinking "that really doesn't apply to me". Of course, this gets into contract law which varies from state-to-state (in some states early payoff clauses may be allowed, in others not), but think of it this way, if you're a dealer offering financing, but your interest rates a REALLY low, how fantastic and easy a way you guarantee a little profit than by simply requiring a fixed minimum loan time period? I'm mad as hell at my parents for just having entered into such a contract last month after warning them about it beforehand.. The moral of the story is consider the financial implications of all contract clauses and then negotiate them.

"loan processing fees" are another way to add profit in the end... In this day and age, how hard is it really to press the "return" key?? Honestly???

 

My be a regional type scenario never had one in my contracts and I always pay the note off early but good advice to keep an eye out for.

As for as trade in's dealers always want them, selling used cars is where they make all their money from a sales perspective.

Kevin

 

Atlanta MINI dealerships are asking for used 08-10 MINIs because they have such a low used inventory. They were proposing very good trade deals if I was to purchase a new MINI. I got an email from them last week.

FYI, they were offering me the exact same price that I purchased my MINI at if I bought a 2012 MINI.

 

WOW!!!!!!! That is amazing - quite a deal there! In that case if you were in the market for a '12, I wouldn't hesitate with a trade on that one... Wish i could get a deal like that!

 

Have to admit...this is some of the best advice on the subject I've seen in many a year.. Well thought out and chimp easy to understand..

Kinda the Chris Christie approach.. Well done.

 

Well? Did you go yesterday? How did it go if you did?

 

It's unfortunate that you choose to go to war in this process, I have no idea why you revel in this madness. USAA pricing is a solid deal, be happy with it and move on with your life.

What's wrong with a dealership making a profit?

 

Well after all that, they told me the car had a wiring harness defect and was a lemon and cancelled the test drive. No car in stock w/ my options - no need to negotiate. But I will sure use these tips in the next few weeks!

 

Not to argue, but 99% of present day car loans are simple interest with no early payoff penalties. I've never been offered one in my 30+ years of buying cars.
I do agree with your basic tenets. Agree on the price of the new car first. Then negotiate the trade-in if there is one. Lastly how you're going to pay for it. The old adage of "I'm paying cash so the dealer should charge me less" simply isn't true, their first preference would be for you to let them arrange financing for you.

 

Agree 100%. Even if MINI is offering finance incentives as low as .9%, the dealership makes some extra coin by directing you to MINI / BMW Finance as opposed to you simply paying CASH.

Cash centers for dealerships are "pre-owned" sales, extended service and warranty contracts, new vehicle add-on sales (such as "paint sealants" scotch guard-like interior treatments, rustproofing, pinstriping, etc.) and parts and service Departments. New car sales drive the other profit centers. Without those profit centers, dealerships couldn't survive. The lesson on saving money in any new vehicle purchase is to ovoid contributing to any applicable profit center.

 

I don't mind if the dealership makes a profit,just not all from me...

 

My dealer came right out up front with we won't take your trade at all, (unless it is a later model MINI or BMW). They did offer to have their buyer come and make an offer on my Civic. The buyer was buying to auction so I did not even bother and sold it on CL in one day.

Also it was MSRP + $295 or walk. (Dec '09)
Only one dealer in my state and 230+ miles away.

I had a loan in the 80's that was I think rule of '78 or some such. With this type of loan you pay most of the interest up front so it does not help you much to pay off early. So it was effectively an early payoff penalty. To this day I always ask if the loan will be a simple interest loan.

BMW/MINI finance does do one trick. They make the first payment 45 days so you end up paying the extra interest on those 15 extra days. Amounted to an extra $40 or something. I noted the discrepancy at delivery cause I had spreadsheets all worked out. They offered to redo the loan but it was too much hassle. Would have had to make another 230 mile trip just to sign papers.