Advice Needed: Negotiating With A Dealership

Hoping to get some feedback from experienced buyers and folks who work at dealerships.

I'm hoping to buy a used 2002 Subaru from a Subaru dealership. I have a 1997 BMW which will be replaced by the Subaru. I test drove the car I would like to buy, and asked that they appraise my car while I was test driving. As expected, they came back with an offer on my car towards the low end of the trade in range, and kindly introduced me to the term "trade differential." Fancy way of stating their asking price for the Subaru less the proposed trade in value. For what it's worth, their proposed trade differential was about what I would be willing to pay for the Subaru without the trade in.

How should I view the dollar amount they offered for my car? I expect that they really will wholesale it rather than sell it off the lot, but I don't know for sure. Does that number get padded or should I view the trade value they gave me as non-negotiable?

I have had my car listed for sale on Craig's list for a while with no serious sounding responses so I made a rather low offer to the dealer of my car plus $X by e-mail last night. The sales guy at the dealership responded saying his manager is out today and he would get back to me tomorrow.

Today, I received an e-mail from someone who saw my car on Craig's list asking legit BMW specific questions so I took the time to write up everything I know about the car. Guy followed up with a phone call and is driving 60 miles tomorrow to come look at my car. So, I'm in the following position:

-The dealer has the car I would like to buy -Guy coming tomorrow mentioned he would bring deposit money with him and if my car is as represented he may make a deposit on it -I want to make sure that a.) I don't have two cars at once, and b.) I am not carless

I expect to hear from the dealer on my cash plus trade offer before showing my car tomorrow. Seems like even if I accept a below market offer from a private party I would come out ahead, but that depends on being able to reach agreement on cash price for the Subaru. I'm at a bit of a loss as to how to negotiate with the dealer.

Any advice would be appreciated!

dont fall for the "CAR FOX"...

Step one...

Quit dealing with the guy who has to check with his manager. Bypass him and work exclusively with the person who has the athority to make the decisions.

That's really all I have, but I highly recommend it.

Clem

You'll always get more money selling your car privately. If you can sell it yourself I'd say go that route.

That handles your trade-in issue...

I would also renegotiate your Subaru purchase once your trade-in issue is settled. If it were me...I'd go to a new dealership and find another Subaru I liked to start the process all over again.

The way I negotiated in buying my last car purchase was completely via email. I wasn't going to go a dealership and have them waste my whole day over $100. If they weren't willing to negotiate over email I wasn't willing to buy their car. I found a dealer who negotiated the sale completely over email and the phone. Thanks Bill Britt Mazda in Fredericksburg. I then cruised in to sign papers and pay with a bank drafted check. It took me an hour. The email negotiation was sweet and painless. I avoided the trade in hassle by selling my old car privately.

Ironically you can't get there from here. The guys in the used car market are ubervultures that prey on lawyers and mensa members. They are only out for blood and believe me they can and will get it. You are looking at a seven year old vehicle that has a following in many different circles. The price of the car at a dealer will reflect the impulse purchasers high limit. The dealer will give you pennies on the dollar for your vehicle. Used cars are selling right now, new ones are not.

IF you have cash to close the deal today you can go in with no trade and lowball the manager or F&I guy. You will probably be denied, but you can try. If the dealer accepts the low ball offer then drive away, but do not complain about things not covered under warranty or that break while you are driving out. You own that gem now.

If you can get a GOOD service contract for 4 years/50k miles you should. Trust me they can be worth the money once a set of head gaskets or transmission goes on the Scooby.

Good luck with the sale.

in my experience (9 years of car sales), you will not be taken seriously negotiating completely over the phone or email unless at some point you agree to a deal that is well worth the dealer's time.

Just as much as you don't want them to waste your time, they don't want you to waste theirs. You're going to do better, imo, if you show up and thoroughly evaluate their car. That shows them a level of commitment to the sale.

Now the final thing you do, when you're ready to pull the trigger, is call them. Typically after several visits. State over the phone to whomever you were dealing with that you need to know in the next 20 minutes whether or not they can agree to the following deal:xxxxx. And if not, to let you know right away. They will assume you are at another dealer, and this is their final opportunity to make a sale or not. I'm sure I'm jinxing myself, but I've never had them say "no"

definitely sell the b m w, if the the potential buyer gives you what you want. Rent a car if you can't be without a car for a day or two.

just be ready to walk away, and do that if the deal you want doesn't pan out.

Three separate transactions and the dealership will try to combine them to seem as one transaction in order to create confusion and tilt the playing field their way.

The transactions are:
1. trade in price
2. new car purchase price
3. financing

They have already combined the trade in and new car price. I bet they are talking to you about price per month to own the car. If so, they are combining the financing as well.

Trade In: They will not give you the best price because they too have to do some work (sell the car.) If you sell it yourself and do that work yourself you will make more. If you expect them to do the work (trade in) then expect it to cost you. My advise; sell it yourself.

New car price: Maybe you have read the same newspapers? Cars are not selling well right now. Price low and hold your ground. You set the time lines, do not let them rush you into buying or thinking it will be sold soon.

Financing: A dealership is only required to offer you the lowest interest rate that you are willing to accept. They are not required to offer you the lowest that you qualify for. They make a commission on selling these loans. This commission can often be more profitable than the car itself.

My advise; speak to banks or better yet credit unions before buying. The bank will set you up with a spending limit and you can bring the check in right from the bank.

When my dad traded in a vehicle a couple years ago, he printed off the page with the trade-in value and all the boxes honestly checked from edmunds.com. He asked for that price because thats what was fair. He didnt aske for the dealer or private sales price, just the dealer trade-in. Just be straight forward about how much it's worth.

I would go with the private sale. Heck, the rule for me is "first one with the money wins". If the dealership is waffling around and someone shows up and buys the car, the dealership loses. If you're willing to accept what the dealership is offering, then go for it.

There is no shortage of used car dealers, or used cars. If things get funky on this deal, leave and go look for another one. As long as you're willing to do that, you have the upper hand.

Thanks for the advice guys. I test drove it a week ago so I've already gone in face to face. Here's what I'm thinking. If the guy who comes tomorrow is willing to pay a reasonable price for my car, I can negotiate on the new one by phone. Their window sticker shows a $100 doc prep / crap fee. So I'll expect that. If anything else shows up I would be pissed. But, can I trust that verbal negotiation?

For the record, this buying from a dealer crap is a pain. I've always just bought my new used car from an individual and then sold my old one after the fact. However, I hired a controller (i.e. got married) so having three cars in the household would cause some strife I'd rather avoid. And, 2000 and newer Legacy's and Outback wagons have autotragics for the most part. I want the wagon and a stick. There don't seem to be many cars with that combo being sold by people rather than dealers.

Sell your car for CASH (no checks, money orders or goats) and if you are going to be carless, then get a cheap rental for a few days and take time off from work to go shopping. Go back to the dealer with the Subaru and say "Listen bitches, I sold my trade outright and I have $xx cash in my hand that I will pay for your car. If you won't sell it to me in 30 minutes or less at my price then I'm going somewhere else to spend my money." That'll get their attention. If they balk, go someplace else and buy a different car, there's a lot of them out there clogging up dealerships.

Since you are selling you old car privately this is kind of a moot point. I deal with one car at a time. I want a price on the new car out the door cash before I will even discuss a trade in. If we can't agree on that then the trade is irrelevant. Talk to several dealers and get ballpark trade in prices on your old car. They should all be fairly close. If they won't give you a realistic trade in value, it doesn't matter what the new car price is. They will combined all those numbers and stir them up and you won't know what you paid for what. If they won't deal separately on each car and each price, walk out and find another dealer.

You also need a FIRM realistic price in your head of what you are willing to spend on what. If they can't match it walk out.

Keep in mind these guys are just trying to make a living and feed their families. They aren't going to take a loss. The numbers for trade and for purchase need to be realistic numbers.

Im with toyman... on the rare occasion i have negotiated with dealers, i cut all the crap right from the get-go. I just tell them:

1. im using my own financing, you are welcome to try and beat my credit unions rates of X% if you can, and if you can, and the terms are similar (which i will read in full) i might even go for it.

2. I might have a trade in, but well talk about that last, because

3. all i care about is the out the door price including tax and all the other add on crap. ive already looked up invoice price, and done my home work.

that conversation takes place in the first 30 seconds, if when they pick their jaw up off the floor they seem open to those foreign and unusual ideas, well talk more, if not, theres another dealer down the street...

jimbob_racing wrote: Sell your car for CASH and if you are going to be carless, then get a cheap rental for a few days and take time off from work to go shopping. I sold my trade outright and I have $xx cash in my hand that I will pay for your car. If you won't sell it to me in 30 minutes or less at my price then I'm going somewhere else to spend my money."

jimbob is right on.

so what if you are carless, it is better than having the two cars. Then I would also go to the dealers and announce you are buying a car TODAY and are they interested?

Couple of points.

What is the dealer auction value of your BMW

To prep and re sell your BMW is going to cost them at least $500 and then they start making a little something something after that.

Walking in with cash will always get you a better deal. (they dont have to deal with you old BMW)

Always be prepared to walk. How many Subaru's were made? There will always be a better deal out there

Are you in a rush? Having to purchase a car in a rush will always cost you. (And the dealers are good at figuring this out)

Don't negotiate! Make an offer and that is it. Once you get sucked in to the "New Math" of car dealer finance you will loose or at very least you will get really P.O.ed. However this means that you have to do your homework. Your offer has to be fair. Unreasonable offer = no deal.

Why not use Vehix or one of the other services and see what else is out there. How about craigslist or eBay for what other people are getting for cars that are similar to what you are looking at?

If you're going to waste some money (which is almost inevitable), do so on the sale of your existing car. Take a few hundred less, that way you ensure the sale is made, you'll have a happy buyer, and you'll have cash.

Like said, rent/borrow for a few days if necessary. Take lots of cash, or a check from a credit union. Take about 90% of what you want to spend and see if they bite. If so, then you can always wonder how much cheaper they'd have sold it for.

FWIW - I wouldn't take a deposit on your bmw. Deposits tie you up without getting paid (i.e. you get the deposit - final pmt gets dragged out). Cash talks. Doesn't mean you stiff anyone with dibs.

At any point, if you're not willing to walk away - it's over, hand them your money and move on.

my folks once got about $600 off the agreed price of a vehicle because they originally negotiated the deal to include a trade, which I guess causes a bunch of headache for the salesman (paperwork and whatnot). Then, the night before they were supposed to go close and take delivery, my aunts car was totaled while parked out on the street, and they sold it to her instead. They didnt get as much for the used car - they sold it for a song since she was family - But the salesman was so glad not to have to jump through all the hoops of taking a trade, he gave em a discount to say thanks. Ive always wondered if this tactic wouldnt work more often

Also, I always hear of people on here lowballing a used car lot, and the salesperson obviously says no. But the buyer gives the sales guy a card or whatever and says keep me in mind. Eventually, the salesman needs to sell x number of dollars to hit his bonus or quota or whatever, and he says "I remember this guy who wanted this one car..." and bingo, salesman makes the seller a great deal. sometimes takes several months, but it appears to work often enough to be considered.

dunno if either of these help, but thats my .02 worth

I once bought a car that i always lusted after from a dealership. For peanuts.

Seee.... what happened was that my buddy went in and traded his car in on a new one, after i had pestered him for months to sell it to me.

He then made the mistake of telling me exactly how much they gave him on his trade in.

Without telling him, i marched on down to the dealership, and the following conversation ensued:

"You have a 1991 Integra GS that you just took in on a trade yesterday. You gave the kid $300 for it, i will give you $600 cash right now."

I drove away in a very clean, high mileage, mechanically perfect 91 Teg GS. I was happy. Buddy was NOT amused.

I called this a.m. to make a cash offer and my sales doosh was out today. So was the used car manager. Great. So, another sales guy called me back. Made my offer which is around private party value. He called back to offer $300 off of sticker. I upped my offer by $600, putting us $1,800 apart. No go. I thanked him for his time and told him I would keep shopping.

Thanks for the advice gang. Going to look at a different car tonight.

PeterAK wrote: I called this a.m. to make a cash offer and my sales doosh was out today. So was the used car manager. Great. So, another sales guy called me back. Made my offer which is around private party value. He called back to offer $300 off of sticker. I upped my offer by $600, putting us $1,800 apart. No go. I thanked him for his time and told him I would keep shopping. Thanks for the advice gang. Going to look at a different car tonight.

Stick to your guns! If they won't budge you Will find another car you like just as much.

I bet they call back tomorrow... .. And since it is a new game and they are coming to to you, your new starting offer should be 1-300 less than your original offer.

It is hardball time. The staredown is underway they are seeing if you will blink. By comming ln lower you will let them know that you are not putting up with there BS. Your time is money. There BS is costing them. Make sure they know this.

I'll be entertained if the do call tomorrow. I drove another car today at another dealership. Sooper easy going guys, they dropped their price based on a phone conversation to what I consider reasonable. The clutch is slipping and they are installing a new one tomorrow or Friday. The manager even offered to print out a F&I recap to show that there weren't any surprise fees. All looks well there.

Guy drove my BMW tonight too. He took a couple pics of a rust spot on the door and is going to have a buddy look at it to see what it might cost him to get it fixed.

So, potentially, I could get the BMW sold and put a deposit on the new Soob tomorrow. Or it could all blow up. Either way, I'll be fine.