Project Mall Runner

[ScottyB]

So much want. Definitely got a good deal there for sure. Was looking at used ones and they all seemed to be old as dirt or still well above $30k. That killed the dream real quick.

thanks and yeah.  i was totally prepared to buy one used until reality hit.  its a very weird market for these trucks.

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Feel free to post about the buying process

i would never claim to be an expert but know a couple things that could help.  if you think this should be a thread just let me know.

back in '05 when i moved to ATL straight out of college for my wife i didn't have any job prospects so i decided to try something involving cars.  took a cheesy clinic that a dealer network was putting on, on how to sell cars and then they'd place you at a dealership as sort of a feeder system.  i didn't last a day, but learned a few things anyway.  this all pertains to buying new only, i don't know much about leasing because we keep cars a long time and the used car market is bizarre and dealer costs on that stuff is impossible to guess.

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• the #1 thing most sales guys want to do is get you in the seat and get you emotionally attached to the car.  easier to manipulate you into paying stupid moneys for it.

• most people are only concerned with the monthly payment...doesn't matter how long it goes on for.  they will try to focus on that, not the actual total, and then they pass you off to the finance guy who then tries to load you up with all the "protection packages" and extended warranties.  some of those add-ons are warranted, most aren't and that's where they stand to make good money.

• you will not get a great deal at the end of the year like most people say.  i've been wrong about that too.  best months to buy are November and January, and late summer right before the model years change over....cars are weird and the model years begin in September instead of January.  on a more macro level, best time to buy is at the end of the month if you can.  dealers receive factory bonuses for meeting sales targets, as well as the sales guys themselves getting bonuses for quotas.  if you're the last guy they need to get a $250,000 monthly or quarterly dealer bonus from the factory before the day runs out, they're going to bend over backwards for you and you're going to make a sales guy a hero.
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good way to think of it...car dealers don't sell "cars" in a way...they sell parking spots.  they have a physical size limit and their new car inventory has to revolve about every month or two to make them money.  beyond that time frame they start taking a bath on the car either because of cash flow, storage space, curb appeal, etc.

as far as money goes, dealers have their invoice price which is a bit of a fakeout - its not the actual price the dealer pays the factory to receive the car, but its also not far off.  probably about 8-10% under invoice is their actual cost to buy from the factory (remember the OEM's customer is the dealer, not us).  then there's MSRP (manuf suggested retail price) which is basically market price minus local markup BS.  closer you can get to invoice the better obviously, but understanding they need some meat on the bone too - everybody's gotta eat - so its wise to negotiate with a bit of breathing room at first vs just coming out of the gate like "i want 5% below invoice".  

some further insight into dealer costs on a car - they have a thing called Triple Net.  that is their invoice minus holdback (the amount paid to the dealer by the manufacturer for each new vehicle sold, built into the invoice price) minus factory credits (advertising, flooring etc) and volume incentives.  in some cases a dealer will take a bath on cars at or below triple net just to get that sweet factory sales bonus for a monthly quota.  i think that was literally the case with our 4runner and why timing is important.  they'll never tell you what their holdback or triple net is so don't ask (although you can make a good guess), especially considering how easy it is to find out invoice pricing now, those are the only cards they have left to hide.  but just know that they have that money tied up in the cost of the car.

in terms of negotiation, ideally you only deal with the online sales guy first and hopefully entirely, and just avoid the actual car dealer circus altogether.  pit the dealers against each other through email with price matching and let them know upfront you're not going to pay a ridiculous destination/freight fee or admin fee.  ask them what their "OTD" price is, i.e. Out The Door.  that's the actual bottom line.  they will want to tell you the price before the add-ons to get you thinking that's what you're paying, when in actuality by the time you show up, drive the car, and then sit down you're going to pay tax + addons and now you're 4 grand over target.  if they're not being responsive or trying to pass you off to other sales guys, walk.

it helps to not be too much of a tire kicker.  straight to the point but don't agree to a test drive (see bullet #1) until they can give you a hardcopy OTD price quote or a very good deal on their best price backed up with your sources that show invoice pricing.  always be willing to walk, be willing to sleep on it.  some dealers will do damn near anything to literally keep you from leaving the dealership because its easier to get someone to agree to a split second decision, albeit poor ones, in the moment.  being able to walk physically or metaphorically keeps the deal on your terms.

a huge deal in dealerships is the CSI or Customer Satisfaction Index ranking which is derived from customer surveys.  OEMs use it to drive certain behavior in the dealerships as well as gauge a franchise's overall standing.  the surveys are based off a 1-10 ranking on questions and for some reason if you give a salesperson anything less than a 10 it could destroy their job as the cumulative rankings actual determine how/if a dealer gets certain inventory.  its a very stupid survey system but that's what it looks like right now.  use that as a negotiating tool, although you may sound a bit like a dick.  

it helps a lot to be very local to the dealer.  they stand to make a pile of money on the backend by servicing your car over the next 3-7 years.  if they know you're local, they know you're going to service with them and it gives them a chance to catch your eye with shiny new cars every time you come in which increases their chances of a trade in for the coming years.  talk that part up and make it clear you intend to be a longtime customer.

2 good sources for bottom line pricing or invoice pricing are TrueCar and the Costco Auto Program.  i used both and TrueCar came through with an awesome price but beware they straight up sell your contact info to every dealer in 100 miles.  you're going to have to up your email spam game after that.  i was willing to pay the price of inconvenience for the savings though.  Cars.com was how i found my civic but it was a dud for finding the 4runner.  that one just took me searching local dealer inventory and then emailing about it.

basically, found the truck i wanted, looked at other dealer inventory over the next few days and confirmed their price was ballpark.  emailed the online sales rep and asked for their OTD price.  got a "special internet" price back which was decent.  checked with Costco to get the invoice price, then registered with TrueCar and a different rep at the same dealer emailed me again with a special TrueCar price which was $1000 above invoice.  went to the dealer to talk with the internet sales guy with that price to test drive, and he was a good guy to work with.  i didn't have to lean on him hard but Jen and i both played the level headed, not impressed game a bit and it helped drive the conversation more towards what they could do to impress us.  negotiated down to $1000 below invoice if we financed through them at a normal rate, not the 0% APR since we had a large downpayment. we considered getting a loan from a credit union (their rates are often better) but their discount off the bottom line worked better long term, we'll be paying it off early, and we can always refi if we need to. anyway the numbers looked good so we agreed.  got punted to the finance guy, he tried to push a bunch of warranty and protection plan garbage on us and we shut that down.  walked out paying 3500 under MSRP including tax.  ALSO - shop mid week...we bought on a tuesday and the place was DEAD. it was so much more relaxing than a Saturday when it turns into a real shitshow.

boy looking back up this wall of text, sure would be easier if we just didn't negotiate car prices right?

heres a great article discussing how dealers operate and make a profit

amazing thread where a dealership general manager just answers questions about how to best buy a car and what its like.  so much knowledge there