ScooterS Posted November 12, 2012 Report Share Posted November 12, 2012 (edited) I posted this in another (buried) post, but thought that I would share things that I've learned about buying cars over the years. I hope that this may help folks who are negotiating on a new C-Max or any car...... Manufatcurers Suggested Retail Price (MSRP) is the one on the Factory Window Sticker. Invoice is supposedly what the dealers pay for the car. However, most manufacturers give the dealers "holdback" or other discounts that drop the dealers cost below invoice. You can find the MSRP and Invoice price for the car by going to a site like NADA Guides www.nadaguides.com or KBB www.kbb.com and pricing out your car with all of the options. Most folks try to get a car at or near invoice. With a hot, new car that is hard to get, some dealers won't budge below MSRP. I think that the difference between MSRP and Invoice on a C-Max is about $1500- $2000. I got mine at about Invoice. Others haven't been so fortunate. Don't forget additional rebates (incentives) that will drop your price further. These include a $1000 rebate for all C-Maxes and $500 if you are a recent College Graduate. I think there is another rebate for current Ford Ranger owners. A few more thoughts..... Don't ever buy a car based on the payment! The dealer can work it so that you can have (almost) any monthly payment...... You will just pay for it over more months. It is easy to get "upside down" in a car where you owe far more on it than it is worth (owning a 4 year car on a 6 year loan). My rule is that I haven't bought a car until I've said "no" to the salesman at least 3 times. Haggle, haggle, haggle... Even if it isn't your nature, your lack of haggling is only hurting your own bankbook. Whether you buy from a local dealer, or online, you can bring your own financing or they will finance it at the dealer. They, of course, make a percentage from the bank on your loan. Avoid the Extended Warranties and Service Contracts they will try to sell you. They are uber high markup items for the dealer. You can get a "Genuine Ford" contract online for much less than the dealer will offer. See other threads here for the details. You may also hear of something called "X-Plan." This is a special program that provides a fixed price to certain Ford affiliates. X-Plan usually is just above Invoice price. Interestingly enough, members of The Experimental Aircraft Association www.eaa.com qualify for this price after they have been a member for a few months. Dealers aren't requred to do an X-Plan, but it may be the way to go for some buyers. Make sure you have a handle on the value of your trade-in before you go to the dealer. You may get a great deal on a new car, but get taken on the trade-in. The same sites for new vehicle pricing will also give you estimates of used car prices. Another good way is to get Carmax to give you a price to sell it to them outright. They do this all of the time (dozens of times a day). Don't hesitate to ask them for a value. It costs you nothing and takes about 30 minutes. We have a local dealer with billboards that claim they will beat any Carmax price by $500. You might find that you can do better if sell your car yourself (don't trade it in). However, you may want to check your State sales tax laws. In some states (not all) you only pay tax on the difference between the trade-in and the new car. If you don't trade it in, you pay sales tax on the entire price of the new car! That can mean a lot if you have an expensive trade-in. It may not matter too much on a lower value car. Example: Sales tax at 5% on a $30,000 car is $1500 on a car without a trade in. If you had a $20,000 trade-in, you would pay only $500 in tax (you'd save $1000 in taxes by trading-in). I hope this isn't overkill, Just a braindump of things that i've learned over many years and many cars. Others, Do you have any other suggestions?? Edited November 12, 2012 by ScooterS MikeB and Ravizza 2 Quote Link to comment Share on other sites More sharing options...
CrystalSC Posted November 12, 2012 Report Share Posted November 12, 2012 Great post Scooter! Quote Link to comment Share on other sites More sharing options...
darrelld Posted November 12, 2012 Report Share Posted November 12, 2012 Good Post Scooter I always get a Carmax offer prior to dealing on a trade. Also some employers will give additional discounts for buying a Hybrid. Through my wifes company we got X Plan plus an additional $3,000 hybrid discount. Our insurance company Travelers also gives an additional Hybrid discount off your auto policy but you have to ask for it. Quote Link to comment Share on other sites More sharing options...
Oldsguy Posted November 21, 2012 Report Share Posted November 21, 2012 The idea of checking at Carmax for your trade is a good one. I love to haggle, but I found that I could save much more by just going to Consumer Reports. I joined their buying service for about $15 for the year. I chose exactly what I wanted, and submitted it. Three Ford dealers in the area sent me their best price. It was much better than any X-plan or Y-plan stuff. Two of their prices were nearly identical. I paid about 10% off the sticker price, and less than the "dealer invoice". This included the $1000 incentive now being offered. The dealers were great at finding a car with the options and colors I wanted. By trading with the dealer (an $8000 trade, which is what Carmax offered me), I saved an additional $560 (7% of the trade-in) in sales tax I did not have to pay. The dealing was painless, and I felt I got a much better price than that offered by local small dealers (who did not even have a C-Max in stock) and could not tell me when one would arrive. Carwoo offered a similar plan, but required a back and forth a haggling with the dealers. I just got the best price. I paid 26,968 after rebate for an SEL that listed for 28,995. Quote Link to comment Share on other sites More sharing options...
CNCGeek Posted November 21, 2012 Report Share Posted November 21, 2012 (edited) Just to add a couple things - the X-plan pricing is before any incentives (so you get those too), also Ford limits the doc fees to something like $100 so if you live in a state where dealer gouge on those, it will save some more money. The dealer should also show you a print out with the x-plan price (they have to show it to you if you are qualified), but any dealer options are not going to be discounted and should be negotiated separately. They will tell you that they are not making much on the car which is probably true in comparison to the shakedown most of their customers receive, but they will get something, so don't feel like they are doing you a favor when it comes to negotiating the extras. The lowest I have found for the Ford ESP warranty so far is www.andersonandkoch-ford-warranty.com - I passed since I doubt I will keep the car beyond a couple years. If you want to get out of the finance office quicker you could ask them to match the online quote. Edited November 21, 2012 by CNCGeek Quote Link to comment Share on other sites More sharing options...
ScooterS Posted November 21, 2012 Author Report Share Posted November 21, 2012 All good info! Keep it Coming!! Quote Link to comment Share on other sites More sharing options...
RedLdr1 Posted November 22, 2012 Report Share Posted November 22, 2012 (edited) Here are a few thoughts based on my experiences. Your results may vary greatly from mine and this is just my opinion... The Finance Office Always remember that when you are in the Finance Office you are still with a salesman, just a different one. Most Finance and Insurance (F&I) staff are paid commissions on the items the sell. This includes but is not limited to: 1. The Car Loan. The higher interest rate the loan the more "commission" there is in it for the F&I person and the dealership. It pays to know your credit score, and "shop" what rate you can get from your bank or credit union. I walk in with the rates, that I qualify for, from USAA, Pentagon Federal, and SunTrust Bank in my smart phone. I simply tell the F&I person to either "meet or beat" the best rate or they lose the finance. Keep in mind that even if they have to drop down to meet your finance with their source they still get a "finders fee" and some commissions from their sources...even at 0% Manufacture Financing. 2. Manufactures Extended Warranties. Once again it pays to shop around but their is no reason to buy one off the web from a dealership a thousand miles away. The "meet or beat" concept works just as well here as on the loan. Just makes sure you are comparing apples to apples as far as the plans, saving money by dropping time, mileage, or coverage is not saving money, it is playing with the numbers. 3. Manufactures Service Plans. Everything above about the Extended Warranties applies here as well. 4. X-Plan or other Incentives. Tell the salesman up front if you are using X-plan or other incentives like a car buying service. In some dealerships the "fleet manager" handles those customers due to the low commissions. You will not get a better price by waiting and "springing" this on the sales person at the last minute in the negotiations. Your price has already been determined... 5. Third Party Warranties or Service Plans. I highly advise you to avoid these like the plague as they can be full of problems. Finding a dealership who will accept them, or having to pay first and seek re-reimbursement, and the companies going out of business all together are common complaints. 6. Protection Plans. These are generally pure margin for the dealership. A can of "Scotchguard" Fabric protector and a semi-annual wax at the local car wash will usually be just as effective...and cheaper. But do the math! My dealer offers "Auto Butler" which is basically a full detail service and wax job for $100 a year which covers a visit once every six months. I pay more than that to have my car detailed at the local Mr. Clean car wash chain and they don't do it while my car is in for a regular service. The math made good sense so I bought the plan... Selling or Trading your Car 1. Car Max or others. When buying my C-Max I was offered $1,000 less at Car Max than I was given as a Trade-In value at my dealer. When you add in the sales tax penalty you can really lose money selling your car when buying a new car. I pay a 6% Sales Tax on the difference between my old cars Trade In value and the Selling Price of the new car. If I sell my car outright I'll will pay sales tax on the entire Selling Price of the new car. As an example a car being Traded In for $20,000 is really worth $21,200 as I saved $1,200 in taxes, ($20,000*6% = $1,200) That is real dollars saved. If Car Max had offered me $20,500 to buy my car, and I took it instead of the $20,000 Trade In value I would have lost $700!!! Do the math! I have never been offered more at Car Max than I was offered in Trade In, your experiences may vary... 2. Trade In Value. This is a rough one... We all know about Kelly Blue Book, the NADA Guide, Black Book, etc... Well take them as a "data point" and move on...you might as well be throwing darts. Dealers base their Trade In value on a several sources you cannot access, the most common is the Mannheim report. It is a national database of what cars are selling for at wholesale auction across the nation. 99% of the time It will be significantly lower than any other value you will find published. To establish a "rough" value of your cars value I suggest Car Max's value and looking in Auto Trader or other publications. The prices you see posted on cars for sale in Auto Trader are Retail, generally Trade In value is $2,000 to $4,000 less than that value depending on the model and how popular it is... Note: If you own an "orphan" car, like Oldsmobile, Pontiac, Hummer, Mercury, or especially a true orphan like Saab, your Trade In value will be lower then you may expect... General Research: Do your research! Research the car, the dealer, the financing options, the Service / Warranty plans, before sitting down in the dealership! Research now saves you money later... Summary: DO THE MATH! Don't fall in love with a car, don't have to have it today and you will get a better deal. If you have to take a disinterested friend or family member who can keep the emotion out of the deal. Yes, it is fun and exciting buying a new car, but you have to live with what you agreed to for a long time.... Buying "pieces and parts" of the deal, such as a Extended Warranty, on line might save you some money. But now you cannot finance it as part of the overall deal, at that good rate you negotiated, so you get to pay for it, right now...does the Math still work? Disclaimer: I am not in the "industry", but I "flip" cars every two years, in most cases, and do the negotiating for most of my family members. I have a lot of experience in trading vehicles and I have several friends in the "industry", that I do trust, who have filled me in on the details, like the Mannheim Report, over the years. Your best bet, in the long run, is to establish a relationship with a local dealer you can trust. That still pays off in Customer Service and other less tangible values over time.... Edited November 22, 2012 by RedLdr1 Quote Link to comment Share on other sites More sharing options...
Jus-A-CMax Posted December 1, 2012 Report Share Posted December 1, 2012 Excellent post! I concur with the thoughts here. Quote Link to comment Share on other sites More sharing options...
ScooterS Posted February 11, 2013 Author Report Share Posted February 11, 2013 Since we have some newcomers on the board, I'm shamelessly bumping this post. Quote Link to comment Share on other sites More sharing options...
C-MaxSea Posted March 4, 2013 Report Share Posted March 4, 2013 Another bump for new buyers. Nick Quote Link to comment Share on other sites More sharing options...
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