Now that I’ve given you the details of our most recent car crash, I wanted to share with you the results of our new car purchase.
I’ve posted my tried and true formula for saving a fortune when buying a new car, but I understand some of you may be skeptical of my results.
So by sharing actual details of this latest purchase, I hope to erase all skepticism.
Picking the Car
Since this would be my wife’s car, she needed to decide what she wanted.
We lived in Michigan for 14 years, then a couple years in Oklahoma before moving to Colorado.
In Michigan, she drove a Toyota Corolla and got around fine even in the winter because Michigan knows how to handle snow.
Snow was not an issue in Oklahoma.
In Colorado, the snow theory is mostly “it will melt in a few days.” Which makes driving from the time of the snowfall until it melts kinda tricky.
So my wife wanted something that did well in the snow.
We had owned a Subaru Forester when we lived in Michigan and loved it. It got around great in the snow, even when the roads had not yet been cleared off. I’d probably still have that car if our kids hadn’t outgrown the back seat.
So my wife looked at the new Forester (2016), liked it, and decided that’s the car she wanted.
Now my work began.
Getting Data
I wanted to get as much info as I could on the 2016 Forester. I started at TrueCar to see what others had paid for the car we wanted with the packages and accessories my wife had selected.
Here’s what they gave us (note — these are costs of the car and dealer handling, not taxes, licenses, etc.):
- MSRP – $29,036
- Average Paid – $27,519
- TrueCar (if you bought it through them) – $27,095
They also provided four ranges of prices for the car as follows:
- Above market price – $28,059 or more
- Good price – Less than $28,059
- Great price – Less than $27,391
- Exceptional price – Less than $26,455
So obviously I wanted to get below $26,455. 馃檪
TrueCar also broke out the details on the average paid as follows:
- Base – $24,900
- Options – $1,769
- Regional Fees – $0
- Destination Fees – $850
- Incentives – $0
- Total – $27,519
Contacting Dealers
I began my quest on May 14 (the date we officially accepted the insurance settlement offer).
I searched for Subaru dealers in my area (within an hour and a half drive) and found nine.
I went to each of their websites (one did not have a way to contact them by email, so I eliminated that one right away) and sent the following email:
I would like to get a quote on the following vehicle:
1. Trim: Subaru Forester 2.5i Premium Automatic
2. Packages: All-Weather Package & Eyesight & Navigation System
3. Colors: Crystal White Pearl w/ Gray interior
4. Accessories: Splash Guard Kit, All Weather Floor Mats, Luggage Compartment Cover, Rear Bumper Cover, Cargo Tray
I am aware of MSRP and invoice prices and would appreciate a competitive bid.
Please include all fees so I can have an out-the-door price. Can you also send me the VIN of the car you’re quoting on?
Please respond via email to this request.
Thank you.
This message was sent out on a Saturday night so I didn’t start hearing back until Monday morning.
Let the Bidding Begin!
Negotiations went slow as I could only get back to them at night when I was home from work.
I’ll spare you the blow-by-blow details, but here are the highlights:
- I got initial quotes and it became clear quickly that they weren’t all bidding on the same car. Some included exactly what we wanted, some included most but not all of what we wanted, and a couple even included more than we wanted. I had to go through the offers line by line, make note of what they did or didn’t have, and then clarify where their car was insufficient (and thus under-priced) or had extras that I didn’t want (and wasn’t going to pay for). BTW, this is different than my past car buying experience. Generally I have all dealers bidding on the exact same car that they are going to pull from a faraway dealership. That was not the case here and the VINs (vehicle identification numbers) made it crystal clear that these were different cars.
- On the initial offer, two dealerships were ahead of the pack. Our home town dealership offered a car at $26,574. This was almost below the exceptional price from the get-go. PLUS, this car had a few extras that added a few hundred dollars in value to it. Another dealership, offered $25,785 (an awesome price!). Upon further inspection they had left out a few things we wanted.
- After the initial round, I sent them all a thank you note. I asked clarifying questions where need be, told them where they had missed the mark if they had not included options, and asked them all for their best price.
- On round #2, our home dealer went down to $26,085. I was now below the exceptional price! All others came down as well. One or two took their time getting back to me and basically eliminated themselves because they couldn’t put together a timely response.
- I then started working each one that was higher to get them to either go lower or throw in something else I wanted. They then either dropped their prices or said “this is the lowest I can go” at which time I thanked them and moved on.
- After a few days the four that were in contention were all around the $26,000 mark.
Checking Out My Options
In the midst of this a friend at work who used to own a car repair and sales company offered to look at wholesale prices for me (he still has access to a dealer wholesale site). He didn’t think he’d be able to see the new car info (which he later confirmed he couldn’t) but I wanted him to look at slightly used cars with low miles just to see if I could get a deal. Also, since many personal finance sites talk about how buying used is so much cheaper, I wanted to see what the used prices actually were.
I sent him the specs and the VINs of the cars I was looking for. His reply:
“Ok just ran the Vins and nothing comes up on the new cars. Through the Manheim Auction houses nationwide, with roughly 1300-12k miles on them the average wholesale price on the Premium 2.5i is around 23,600 wholesale so depending on what you’re getting from the dealer anything in the 25,900 to 27,500 is a good deal.”
That’s right where I was — in the “good deal” range.
It’s also interesting that IF (which I can’t) but IF I could buy a used car wholesale I would only save a couple thousand dollars and give up a year or more in mileage.
The Final Stretch
As I went back to the dealers one last time and made sure everyone had what I wanted on the car they were quoting, here’s where the bids came in (note that all of these are below the exceptional value price listed by TrueCar):
- Fifth place was $26,228. This dealer also offered a “free” Colorado Care Package which was basically a protective coating over the paint job due to the intense sun here. The package had a retail value of $995 so I asked him to give me the cost of that package off the car, which he wouldn’t do. He did say he didn’t want to lose a sale over $100, so he would go down that much if it meant he got the sale.
- Fourth place was $26,219. This was $1,000 less than his original bid.
- Third place was $26,137. This dealer threw in an extended powertrain warranty as well. She would not give me credit for it though. Plus she was such a pain to deal with (we had 10 or so back-and-forths) that I didn’t want to buy from her.
- Second place was $26,085 from our home town dealer. This guy had been working with my wife on the test drive, showing her the car, and so forth. In addition, they were the closest to our house by 45 minutes, so I was hoping they would be competitive. In addition, this car had a few extras on it that we hadn’t asked for that added $300 or so to its value.
- First place was $25,736. It had all we wanted (no more), but this dealer was the farthest away from us (90 minutes).
So, which one did I take?
The issue with the first place bid was that it was too late. I hadn’t heard anything from the dealer for a couple days so I had assumed they had dropped out at a higher price. As we were anxious to get my wife a car (we were now on day three of being a one car family and it was driving me crazy), I accepted the local dealer’s offer at $26,085. Six hours after I accepted that offer, I got the even lower first place offer.
I had told all the dealers I was going to make a decision at any point and they needed to be timely. In this case, this dealer wasn’t timely and lost the sale.
In addition, the few extras on the car here made the overall value about equal. And since one dealer was here and had helped us and the other was 90 minutes away, we went with the dealer here.
BTW, when I bought my Highlander in 2011 in Michigan the local dealer drew a line in the sand and refused to go lower than a certain point. I bought my car from a dealer an hour away for $700 cheaper than what the local dealer offered.
Finalizing the Deal
I called the local dealer, accepted his offer based on my understanding of the deal, and sent him this email to confirm:
Steve —
I want to confirm your offer. Here’s what I understand it to be:
* 2016 Premium Automatic Subaru Forester
* White with Gray interior
* Option package 15
* All Weather Package
* Heated Front Seats
* Windshield Wiper De-Icer
* Heated Side Mirrors
* Eyesight Driver Assist System
* Pre Collision Braking System
* Pre Collision Throttle Management System
* Lane Departure Warning & Lane Sway Warning
* Adaptive Cruise Control
* Steering Responsive Fog Lights
* Subaru Starlink Multimedia
* Navigation System with Subaru Map Updates 3 Year Free Updates
* Rear Bumper Cover
* Splash Guards
* Cargo Tray
* All Weather Mats
* Luggage Compartment Cover
* Homelink
* Auto Dimming Mirror and a Compass
* Wheel Lock Kit
The pricing on this vehicle is as follows:
Dealer Sale Price is: $26,085.00
Dealer Handling is: $0.00
Colorado Title fee: $17.20
State City and County Taxes: $2,152.01
Total Out the Door: $28,237.01
Is all of this correct?
FYI, dealer handling ranged from $399 to $599 from the various dealerships. I got the winning dealer to get rid of it on their second bid.
He confirmed it was correct and I put down a $1,000 deposit on my Fidelity American Express.
Financing Snag
He asked how I was going to pay for the car and I said I had a check. He said the dealership had had trouble with checks in the past so they would have to run a credit check on me even though I was paying with a check.
I didn’t want to have a credit check run so I told him I’d get a cashier’s check. He said they’ve had trouble with those too and they would still need to do a credit check.
I told him I’d bring cash. He said he’d have to check on that. He got back to me and said I’d still need to fill out the credit forms (it was dealership policy) but that they wouldn’t do a credit check.
So my wife had to go to two different Chase locations to get the cash as no one bank near us had it all on hand!
Getting the Car
The next day (Saturday) we went to the dealership, saw the car, confirmed it had everything it was supposed to have, sat through (and declined) the various add-ons they tried to sell us, and paid them the money (I had counted out the cash the night before and placed it into $5k bundles to make things easier).
After paying, I left and my wife spent another hour at the dealership as the salesman walked her through every bell and whistle the car had (which is a fairly long list).
So that’s it. It took about a week and got us a pretty good deal.
Any questions or comments?
Very thorough! The internet has made car buying so much easier than it used to be. I vividly remember going with my dad when I was a boy to buy cars. So much haggling and back and forth. Pretending to walk out, etc… It was actually a ton of fun, but not nearly as efficient!
I think that dealer margins must be in the tank these days since it is so easy for people to do their own research and play dealers off each other for the best price.
Well done!
I have followed you for several years and I love reading about your success with buying new vehicles. You have more patience than my husband does but we used some of your tips when he purchased a new vehicle last summer. We also financed $4K (for a few months) to take advantage of an additional $1,000 off. There was no problem with paying by personal check for the bulk of the purchase price.
I hope your wife loves her new Forester, that is among the vehicles I will consider when it is time to replace mine.
Thanks for sharing this great experience. Hope the car will serve you well.
What was the reason for declining the credit check?
There was no need for it – I was paying with cash. I don’t want companies pulling my credit reports for no reason.
Not arguing or contradicting, ESI, I’m sorry this happened and it didn’t go the way you explicitly told the dealer you wanted for it to go.
In a nutshell, IRS Form 8300 – Bank Secrecy Act “(t)o deter or prevent illegal activity including terrorism and money laundering, Bank Secrecy Act compliance requires verification of a client’s or customer’s identity.” https://www.irs.gov/pub/irs-pdf/f8300.pdf
Your identity must be confirmed on this form (I’m wondering if both banks you and your wife visited required you to fill out this form, because they were legally required to do so.
My experience with this is personal; I used to working in banking in the early 1980s, and this was required (the amount, $10,000, hasn’t changed since then). The average person in 1985 carried $37 in their wallet. It is still less than $40 today in 2017. Counterfeiting currency, and falsifying identification was a problem then and still is now. I used to get drug mules attempting to buy $9,900 cashier’s checks with cash several times a week, and I would ask them to fill out the form and they would always refused (not worth spending 20 minutes with a non-customer counting out cash for a $2.50 fee and the risk that some of that cash was counterfeit).
Just saying, it wasn’t personal on the dealer’s side; they have to be able to show all their bosses that they have done due-diligence, if something goes sideways. If your wad of $28,237.01 contains any counterfeits, or you are not who you say you are (I can get a false CA DL and U.S. passport in any name/age combination for $55 today in MacArthur Park in L.A.) then the dealer is S.O.L. http://www.npr.org/templates/story/story.php?storyId=90995500
At some point, you have to ask yourself what the downside is for yet another Credit Check to be run, compared to the time-and-energy expended by both you, and your wonderful wife, to go and get the cash, bring it back, and throw it down in $5,000 piles.
Do you doubt that it crossed the dealer’s mind that you might be avoiding something in order to avoid a Credit Check run?;-) Me neither. Next time, write a check, lay back, and enjoy while they run the Credit Check.
One last solution for next time you do this: wire the money to the dealer’s account the day before you pick it up. $40 wire fee. Dealer can verify deposit is good, and you can drive it away. Just a thought.
Keep up your great writing, insights, and stories! Am loving it!
I’m not exactly sure what you’re saying, but I do know that I just bought a new car in 2014 (the one we bought after my wife’s first wreck) and we didn’t have this issue.
With this dealer I offered to pay via credit card, cashier’s check, check, cash, any way they wanted me to pay to avoid the credit check and they wouldn’t go for it.
Personally, i think they were getting some sort of kick-back from the back or some financial institution to run credit checks. maybe not, but that’s my instinct.
If they were required to run it by some law (is that what you’re saying?), why didn’t they just tell me that?
It really doesn’t matter that much now anyway…it was just a pain then.
ESI, it seems like you are done with this topic, and find it irritating, so I won’t belabor it. I’m sorry it happened to you, and was so disconcerting, especially after all the effort you went to prevent it.
All you have to remember are these two things: 1) are you who you say you are? 2) is the money good? You know both these things are true, but the dealer doesn’t.
I will take your inquiry (“is that what you’re saying?”) at face value, and tell you that a ‘kickback’ requires somebody spending money on the credit check in order for part of it to be kicked-back. That didn’t happen.
The ‘cash’ should have required the Form 8300 to be filled out at the two bank branches for both you and your wife (assuming you each withdrew more than $10,000 in cash). The links provide the reasons, and it isn’t your credit-worthiness. The dealer now has to fill out Form 8300 when they deposit your cash, and assume the risk that all that $28K is legitimate.
Think of this transaction from a perspective other than your own. Your resistance to the credit-check (which would have cost you zero) is a red flag to the dealer. Imagine they ran it, and found 10 other credit checks run on you. It would indicate to me that you are possibly laundering cash by purchasing cars (dealer does the DMV registration automatically) and then moving the cars as an alternative form of payment.
This type of thing is something criminals, terrorists, and tax cheats do. Don’t be insulted they ran the credit report; I would have run it, too.
Same thing with your choice of car at your music industry VP job. The job is more than you sitting at a desk and relationships. Attorneys, Consulting, Medical partnerships, etc. actually have a list of cars partners must drive (all luxury, natch). Think of it from your boss’s perspective; he just made a hire, assumed you would do what every other VP does and fit in, and when you resisted on an economic reason it might actually reflect on him to the rest of the company (his boss, other VPs, subordinates wondering why a VP is driving a Camry, clients, etc.) You don’t care, but your boss does and he has a good reason.
Anyway, you don’t need to reply. You can just call the dealer and ask why they ran the credit check, and have your answer. But my multiple replies should be sufficient.
Keep up the great writing, and have a great weekend!
First of all, I am not mad or upset with you. I value the fact that you read and comment here frequently and appreciate your thoughts. Just want that to be clear.
I’m also not arguing. I’m just wondering why the dealer insisted on the credit check when 1) I’ve never had this happen previously and 2) it didn’t happen with the car purchase I made a year and a half earlier. It just doesn’t make sense.
My issue also isn’t with the bank, what they’d require, etc. It’s with the dealer.
It’s simply confusing. Even reading what you’ve listed, I can’t reconcile it with what’s happened in the past. I’ve purchased several new cars through the years in many states and never had a dealer insist on a credit check (which, does “ding” my credit, so it does cost me something — I don’t like credit inquiries.)
I know that there have been regulations since 9/11 about the movement of money as I know the government uses it to track terrorist activity. But as I said, I’ve bought cars this way since then (probably two or three), and never had this issue previously.
I’m not sure if it’s a dealer thing (first time at this dealer), a state thing (first purchase in a new state), or something else.
It doesn’t really matter now, but next time I buy I’ll be on the lookout for this. As you know, I always have multiple dealers bidding, so it will be easy to ask if they require credit checks and why. I did ask the dealer I dealt with and he gave me the standard “that’s just how we do it” reply, which was pretty useless.
Ok, that’s it for me on this subject. Thanks for the discussion. I always learn something from comments and am thankful you took the time to respond.
Thanks, ESI. Your stories and blog keep me coming back. Glad you see my posts as attempts to be helpful. NNTR. Be well!
Dealerships won’t take a credit card to purchase a car because their margins are so small they don’t want the 3% hit it costs them. They will take a deposit and like one payment, but not the whole car. They take credit cards for service because the profit margin is much higher.
There was no need for the car stealership to run a credit check. They verify your ID with your driver license, not running credit.
Something fishy was going on — probably some sort of scam to try and separate you from more of your money without you suspecting it.
Car dealerships are like the brick and mortar version of robocalls.
One simple reason – getting your info for affiliate marketing. 馃檪 I am sure you guys have figured this out by now.
Good story. I used much of the same strategy (likely what I learned from you in the past) for the last new car we bought, and could have saved $100 if I had been willing to drive 90+ minutes. But I hadn’t seen that car in question, or test drove it, etc… and so I went with the dealership 20 minutes away that was $100 more.
That said, it sounds like you enjoy it more than me.. the car-buying experience always leaves a bad taste in my mouth, I’m usually eager to get it over with as quickly as possible. I’m glad I won’t have to do it again for a long time (barring unforeseen circumstances).
I must admit, I do find it to be fun. 馃檪
Most people hate it. I’ve thought about offering a service to friends and family — splitting the savings with them below a specific amount. Maybe that’s a business idea. 馃槈
I have used your system (going back to your old blog days) three times, buying a 2012 Nissan Murano, 2013 Toyota Highlander, and 2015 Toyota Corolla. It works…thank you!
AWESOME!!!
There’s nothing I like better than hearing someone took my advice and made or saved a ton of money!
I used your strategy about three years ago and reached a similar deal with a local dealership. The best part of the online negotiation process was that it eliminated the huge time suck that visiting multiple dealers in-person (and following the traditional “be ready to walk away” process) becomes. The key to the success of your method, in my opinion, is getting the written confirmation of every detail of the final, digitally-accepted offer. Glad to hear your technique still works in 2016!
One note I’ll add, even though they insisted they would not run my credit (I was paying with a personal check), I found out during the closing process that my local dealership had run the report. I was disappointed, but I felt that the negative revelation and breach of trust was relatively minor compared to the deal I received on the purchase.
I wonder if they get some sort of kickback from a bank or something for running credit reports…
ESI, I have received two explanations for running the credit report (I also pay with a personal check.)
1) You are driving away with a brand-new car, and all the dealer has is a little 2.75″ x 6″ piece of paper you signed and a photocopy of your driver’s license. If you have a credit history to run, it means you are a ‘real person’ (without a history of bouncing checks, not paying bills, bankruptcies, and other credit flaws that are actually proxy for character flaws).
2) Last car I bought, I could not buy the car without spending 15 minutes with the credit manager! He actually made the deal 0% financing for 5 years, no fees, and a $200 credit (making the car cheaper than the price I agreed). I asked him if his commission was more than $200 for financing the car, and he replied “yes.” Even though on paper it looked like a free $200 in my pocket, I declined and am glad I did.
Ok, I get #1 if I’m paying by check. But I had CASH. Why do they need to run a credit check then?
I dislike the financing pitch too. When the guy comes in I usually say something like, “We do not want any financing of any sort no matter what you say.” That usually speeds things along. 馃槈
You should have taken the financing and the $200 extra credit he was offering then paid the balance in full within 90 days. The lender would have taken his commission back.
Finally…the customer gets a point on the dealership.
Ha! Maybe next time. 馃檪
My last 3 cars we purchased with a check and all 3 times we sat with the finance manager to go over the details. They might have run a credit check, I really didn’t care. The last time I let them do the financing knowing I was going to pay it off with the first payment and it took a week for the loan to hit the credit union and I ended up paying like $16 in interest since the interest started at the time of the deal. Lesson learned, just write the check.
Yes! Who wants to spend hours and hours going from dealership to dealership? No one I know!!
So glad the process worked for you.
I know Ford, GM and Fiat Chrysler have programs where you can get vehicles below dealer invoice. An example is I can get a 5% below dealer invoice on any Fiat Chrysler and about the same for GM due to family working for them.
Has anyone had experience with Toyota, Honda, Mercedes or any other transplants offering similar progams?
How does that compair to the ESI method?
I like it because there is no need to negotiate. It is usuall the best the dealer can offer.
You have to have a family relationship for these to work?
No. For Fiat Chrysler Friends and Family plan you can be on the Friends plan and get 1% below dealer invoice. It is a matter of the FCA employee giving you a control number to get the vehicle. Not sure on the GM plan but I know my son can give out I believe 6 or 8 control numbers to friends a year for a purchase or lease if interested.
So you have to know someone who can get you the numbers. In other words, it’s not open to the general public.
Unfortunetly yes. But there are also suppliers discounts available if you do work or as our firm does work for Ford , FCA and GM which are the 1% ish thing. I am not sure if there is anything available the other car manufacturers who assemble here in the USA.
As with all things keep your mind open to the possibilites.
Of course.
Now I just need to find a friend who works for Subaru and see what the real prices are. 馃檪
I purchased 2 cars in the past year with cash. I was told that a credit check was required because of the Patriot Act. Not sure if that is true.
What do you do about vehicles for your children to drive? I sold my dependable 2005 to my eldest son (I tried buying a good used car but couldn’t trust what I was buying).
Funny you should ask — I have a post on that subject coming up in September (yes, I plan that far out).
Short answer: We will soon be buying a new Forester for our daughter. Not sure what my son will do. Each of them selected a different path to earn/not earn a new car.
Stay tuned. 馃檪
I used a similar method on my last vehicle purchase. Using emails, getting specifics, and doing research made life so much easier for me while getting a good price. After agreeing through email, I ended up spending around 45 minutes at the dealership finalizing everything. I wasn’t concerned about a credit check, so I took advantage of a 0% financing on part of the price to get an extra $1500 off the price. Put the rest on my credit card to get the 1% cash back, paid off both the card and the loan before incurring interest.
While margins are most likely down for dealers per sale, the amount of time spent on (hopefully) making a sale is way down using this method.
That was a great article, ESI. And your wife’s Forester has some very nice features…
Mike
I think the “credit check” requirement is actually a OFAC know your customer requirement. But there are databases you can check to satisfy that rule that do not also check your credit bureau reports. If I did as you did and paid literally cash (not a check) for the car, I’d have left my reports frozen and told them here’s the deal, take it or leave it. I might have filled out their forms but only after scratching out and initialing any legalese that gives them permission to check my consumer reports. Verifying my identity can absolutely be done without checking my credit, which does come at a cost (a hard inquiry, which may or may not matter, and another potential place my personal data could be breached) to me.
http://www.edmunds.com/about/press/edmundscom-provides-tips-to-help-car-buyers-avoid-unnecessary-credit-checks.html
Thank you ESI! We’re in the market for a new Outback so this is timely and will use your techniques over the next few months. We’re not in a rush to buy 馃檪
I really enjoyed your car buying story. I am a little more flexible about buying a new car. I would have looked at different models with the features that I wanted. I would have also looked at the gas milage and the repair history of each vehicle model. I would think if you are paying cash for a car you should get a good deal. I would like to mention that very few people can pay cash for a car. It is a lot of money to spend at one time for a depreciating item. I have been told (which might not be true) that any time you put more than $10K down on a car that you credit will be checked. The car dealer and especially the goverment wants to make sure that you are not part of the underground economy ie. drug dealer.
We did look at those factors and that’s how we ended up with the Forester.
Reliability and long life are our two biggest factors when buying a car. The Forester is rated well on both measures and the last one we owned was awesome.
You are right about the cash, though more people than you might expect pay with cash. The finance guy at the dealership said about 20% of his purchases are in cash.
Just a quick thank you ESI! I am not in car buying mode now, but when I am it is great to know I have a solid reference plan. This step by step “How to” is incredibly useful.
(Wow, a 2000-plus-word post. I’ve got to step up my game. 馃檪 )
Great detail here in what you did! Making the dealers play by your rules is a key component of this. Just by itself this could be a $19 e-book.
Though I haven’t ever bought a new car, the amount of money involved does seem to justify shopping around. I admit that I was a bit surprised that the percentage difference was so small: only a few percent.
Just curious: How many hours do you estimate all of this took?
Great to see you here!
Most of the time was spent on deciding what car we wanted and what options.
It took an hour to find the dealer emails and send out the initial note. Then maybe 30 minutes a day to monitor, counter offer, etc. probably less than five hours on the negotiation over a total of several days.
I use to sell cars back in the day. I can’t tell you how many people get ripped off especially with financing and options. It’s basically why I quit the business. Many snake oil salesman in that profession for sure.
Excellent post! I’ve been looking at buying a car soon and will definitely use this system.
One question – what do you do with the VIN numbers if you don’t have a friend in the business? You mentioned that the VIN numbers made it clear the cars weren’t what you were looking for. I’m sure there’s a step here that I’m not aware of so I’m hoping for some more detail.
The VIN isn’t about the friend, but helps me save time in some cases.
In my past experiences, even though I’m talking to several dealers, they are bidding on the same car. It’s likely that none of them has the exact car I want on the lot, so they search for it around the country, find it, then they all give me their prices.
In this case, the dealers were submitting bids for cars they owned. Some of them had exactly what I wanted, some had it all plus some, and some had a bit less.
If I got the VIN for a car and looked through the details, I could verify what it had in comparison to what I wanted. Then if another dealer submitted a bid for the same car (verified by the VIN) I didn’t have to look through all the detail again — I already knew what it had and didn’t have.
Thanks for the info!
Thanks for all the great details! Why did you not want the dealer to run a credit check on you?
1. It was not necessary. So why do it?
2. Not sure it would, but I wanted to take no chance that it would lower my credit score.
This is what I do every time I buy a car or help a friend or family member buy a car. The internet sales guys are there to move volume vs. maximize the sales price.
I have always used Edmunds.com as a resource to price out a car at invoice. I always pre-negotiate a deal before I ever step on a dealers lot. The moment you tell a sales guy that you were dealing with John from Internet sales they instantly focus on other “prey”.
Thanks for sharing!
Did you look at you using Costco’s New Car buying program?
https://esimoney.com/costco-car-pricing-is-good-but-not-better-than-my-method/
I haven’t seen any comment on the difference in pulling a “soft” and “hard” credit inquiry. When I bought my last two cars (both 2 1/2 to 3 1/2 years used, which is my preference) paying with a check, both dealers insisted on running a credit check as well. After complaining about the potential ding to my credit score which was unnecessary since I was not applying for credit, both dealers assured me that this was simply a “soft” hit which would not effect my credit score. Being an attorney, I wrote out on the contract just above my signature, “Notwithstanding anything above, this authorizes a ‘soft’ credit inquiry only, and does not authorize anything which could affect my credit score.”
Both dealers ended up accepting this language, and my credit score was not “dinged” in any way — i.e., it was truly a soft hit. (These show up as credit “inquires” on my credit report, I believe, as opposed to requests for extensions of credit which can ding your score if there are too many within a given time period.)
From reading this post, and particularly former banker JayCeezy, my opinion is that this is probably the best practice policy for dealers to be assured that the person in front of them is actually the person they say they are.
I used a very similar if not identical process when buying a Subaru Impreza in 2013.
However, the part you gloss over that was MOST distressing for us (and I was totally unprepared for having last bought a new car 9 years earlier) was the upsell of the “add-on” packages when paying for the car and taking delivery. Service program $2500 or more (I do my own basic maintenance like oil changes which are extremely easy on Subaru’s), “leather protection” plan for (initially) $2000 or more, “paint protection” for added $$$, etc… When you get in front of the dealer “upsell closer” people with a wife who thinks one or more these packages is somehow “worth it”, you have a major problem on your hands. We got out of there with no add-ons, but also nearly a marital melt-down.
Next time I will likely just go with the Costco price (even though I know I can do better) and make it completely clear in advance that I want no upsell packages at closing. No hassle, no calling around and endless email chains back-and-forth. I think the small extra for the Costco price might be totally worth it, especially given how infrequently I buy a new car.
I have no problem telling those people “no.”
In fact, I usually say something like, “I know you’re going to offer us all sorts of add-ons. I can tell you now that we are not interested in any of them. We’ve done our research and don’t want any, so you can save both of us a lot of time and just skip that part.”
By this point in the process they have dealt with us enough to know we are no-nonsense people, so there’s no problem.
I don’t understand why you’d go with the Costco price and “make it completely clear in advance that I want no upsell packages at closing” when you could do the same with your own, better deal…
Enjoyed reading this article. Have a question for you, ESI: How would you handle a special order? I’ve searched all over for a 2018 Forester Premium 6-spd with fog lights and no one has one, and I’ve checked about 15 different dealerships. I spoke with a friend of mine in Washington state (I live in Colorado) who sells Subarus from a dealership up there, and he suggested it’d be cheaper to order this car with this option and any others I want than it would be to have them installed at the dealer. How would you recommend I approach my local Subie dealership about this?
I would still bid it out to several dealers to get the best price and terms.
Great job and one thing I would recommend those that work for larger companies (not sure who/why/how some offer) is to see if they have a GM Friends and Family pricing offer (or something similar). It was pretty easy to sign up and they allow you to share or use it twice a year (so you only have to know someone who works for a larger company) 馃檪
Once I had the authorization code, all dealers had to honor a specific price and it was slightly lower than the lowest price after I had went through a week of what you did above. We have bought two GM vehicles (Yukon and Cadillac) since and it has taken a lot of the back and forth effort out of it (though the negotiator in me isn’t as happy) 馃檪
Next time you can save yourself a lot of time and just go straight to the exceptional price for your choice of vehicle.
Go to the dealer with $25k in hundreds and just spread them on the mangers desk. Tell him your price and say he has 5 minutes to make a decision before you leave.
馃槃
Just being facetious!
But this worked when I bought an Omega watch.
I liked that you said that one thing to consider when you are thinking about buying a new car is to make sure that you check out all of your options and compare vehicles. I have been thinking about getting a new car but I have been worried that I would end up making an incorrect purchase. I will be sure to compare cars and determine how much I am willing to spend before making my decision.
Hi! Looking into getting a new car, and came across a few of your articles. Really helpful, and I plan to send the emails out this weekend! One question: I also have a car that I plan to either trade in or sell separately. Would you recommend including it as part of the deal, and mention something like “I currently have X, and I’m interested in trading it in as well” or would you not mention the trade-in and make that an entirely separate transaction? Thanks!
I can’t speak from personal experience since we’ve always given our old cars away when we’ve bought new.
That said, the rule of thumb is that you’ll get more if you sell your old car yourself, but there are hassles/issues with doing that, so it depends how you view the trade-offs.
Ah, right! Apologies – I remember you mentioning that somewhere. My car isn’t old enough to donate, unfortunately. We’re looking at a Kia, and I noticed that when I go through their trade-in process on their site, it offers a KBB value. If that’s the case, I’ll see what that offers vs a private sale.
Thank you for the quick reply!
Just came across this. Great exercise. Wonder how it would hold up in todays economy.
Probably on hold until things loosen up and return to normal.