Negotiating with Car Dealers, Am I Missing Something??

I decided to upgrade my family car and purchase a near new Toyota Rav4 or Honda CRV. Searched for 2017-2019 models, and visited few dealerships. Finally, I found one that fits into my criteria - about 25000 Kilometres, 2018 AWD Rav4 in very good conditions. They claimed it is a "executive driven car" from Toyota Head Office. All things settled, only needed to negotiate the price and was ready to purchase that.

They practically declined to negotiate. Finally offered 200 AUD less than the asking price (29k). My initial offer was 27.5K. Finally offered 28K AUD and left.

This was not my expectation. But am I missing something? Did I show too much liking for the car?! I have one car and in no hurry to purchase another right now.

What is your experience with purchasing a similar model. If you can comment or PM me the price you paid for a 2017-2019 RAV4 AWD with below 30K mileage, I will really appreciate that.

(added a poll to get a sense of the negotiated price by OzBargainers)

Poll Options

  • 119
    Negotiated the price down by more than $1000 when buying a near new (about 20k-30k kms driven) car
  • 5
    Negotiated the price down between $500-$1000 when buying a near new (about 20k-30k kms driven) car
  • 0
    Negotiated the price down between $0-$500 when buying a near new (about 20k-30k kms driven) car
  • 1
    Bought a near new (about 20k-30k kms driven) car at the advertised price

Comments

  • +14
    • Thanks.

    • +17

      TL DW: Simply decide what you are prepared to pay. Offer that. Don’t split the difference, don’t negotiate up. Offer and walk away if they don’t go for it. Don’t even listen to what they say in response to your offer.

      Good video but he goes such a roundabout way to make his point. 4 minutes in and I just want to skip forward.

    • +1

      This guy is on another planet. I tried his approach multiple times and the dealers would barely budge. At the end of weeks of looking I had stuck to my guns of negotiating within 5%-10% off a demo or new car and didn't have a car to show for it. Even when the car was in poorer shape upon inspection, I thought I'd see how much they'd come down on a $54K car… He refused to budge more than a couple hundred dollars. He struggled to sell that vehicle for the next couple of months, but did he care? Who knows?

      These tactics may have worked a few years ago, but dealers have clued on to this. Ultimately, THEY decide what gives THEM the best deal… depending how long THEY'VE had the car and how badly THEY want to get rid of it and how low THEY want to go. It has nothing to do with what the car is actually worth and what you are willing to pay for it or whether you have cash to go right there and then.

      They'll have an answer to all the questions this guy poses and they'll just hold out and wait for the next idiot that doesn't bother to negotiate hard instead of dealing with someone that's going to give them less profit (oh and thanks to all the idiots that have made negotiation hard for us by paying whatever the dealer wants).

      • +2

        They are probably idiots then. Stagnant stock is a huge liability. It costs money, costs insurance, takes up space, and earns you nothing.

  • +3

    Finally, I found one that fits into my criteria

    If it is in good condition, near-new, etc then they might have already priced at a decent price. How much you can negotiate down also depends on what the original asking price is.

    Plus - just as you're not in a rush to buy, they might not be in a rush to sell either.

    • +3

      I understand that. I never bought from a dealer before. But my understanding from my friends who bought from dealers is that reducing the price by 1K-2K is what I can expect. 200$ offer felt like a joke - that's why I am confused.

      • -5

        Toyota and Honda doesn't have much gross to move. May be your friend bought different brands

  • +12

    They'll call you back with a better offer. Otherwise wait till end of month.

    • Yes, that's what I would do now, wait till I am satisfied with both the price and the condition.

    • +1

      I think used cars sales are based on how long they are holding the cars (i.e. average days to sell) rather than any monthly target (since these are set by the manufacturers).

      The longer OP holds out the more the dealer will lose (to interest and depreciation) so they rather offload it quickly unless there are other interested parties.

  • +1

    Always buy when they need to get their quota on sales, you are much more likely to get the best possible price.

    • You are right, the last week it has to be…

    • This, I had $900 dropped on a $10k car because it was the last few days of the month.

    • +1

      Thanks. I would like to know how much is the price may be negotiated from fellow OzBargainers who bought similar cars recently.

        • +2

          So everyone buy cars in the price mentioned in carsales.com.au? I know they don't and hence I care to ask.

          • +1

            @webtonmoy: Car sales .. Majority are overstated and come down on price… Mine isn't the same make & model but I did negotiate it down by $1400. Bought preowned from a Dealer 3 years ago. Also had checked at the time that same car was advertised on carsales by the dealer as the cheapest in the state and second cheapest in overall AU.

    • Yeah you have to know the market for that particular car. I got $500 off our last used car at the dealer (he wanted $18500). But that $500 was just token to make it all seem kosher.

      What actually happened was that the dealer had bought it at trade price for his wife, and then when she didnt want it he put it on his lot at trade price seeming by mistake.

      That same car was selling for a bare minimum of $25k at the time even privately. I knew this because I had been looking for this exact car for months.

      • For this one, I think their price was not very special.

      • +7

        the good old dealers wife/daughter/dog story eh

        • +1

          I agree its the oldest trick in the book. But there was no denying the 7k under retail value, regardless of the back story.

          Allthough in this case when he forgot to supply the 2nd key, he took me to his house to get it, so it was plausible.

          Also the reason his wife didnt want it was because she miscarried their first child, so this car was a reminder of that since it was for her to cart the new baby around. I doubt even a used car dealer would lie about that on a car that was already seriously undervalued.

  • +6

    IIRC when I bought mine (not a Toyota or a Rav 4) I negotiated about 2-3k off the asking price. With the way the market is now, I'd probably walk away if it wasn't near the price you wanted it for. At the end of the day whether it's an executive driven/king driven or even ScoMo driven, it's still a second hand car

    • my thoughts. :)

    • i rather buy the car driven by the intern- i know they'll do their best to look afteer it and not scratch it

  • +13

    FYI some dealers are listing cars on a fixed price basis. They'll already discount the car to be the cheapest car on Carsales, in that condition, and as such they don't leave room to negotiate.

    The experience your friends have had would be totally different at 1 of these fixed price dealers.

    It has no bearing on your negotiation skills, or how you come across, or the time of the month. None of it. The price has already been sharpened and that's where they want to hold firm. They know that you can't just go down the road and buy a cheaper one.

    If you want it and it seems a good price already, buy it.


    https://www.carsales.com.au/cars/details/2018-toyota-rav4-gx…

    All vehicles are priced DRIVE AWAY with no hidden costs and are advertised as a SPECIAL INTERNET PRICE (DISCOUNTS HAVE ALREADY BEEN APPLIED)

    To be fair, based on a search of Carsales, their price does indeed seem to be decent. Cheapest one there is their white one for $28k drive away. So you're paying a premium for the Graphite one, yet still the cheapest coloured option…

    You can't just pick the cheapest car on Carsales and think they have a further $1000-$1500 to move

    • +3

      I think it is not the cheapest 2018 rav4 in the market. 25K-30K km driven Rav4 are ranged between 27k-30k aud in carsales. So I thought my offer of 28k was very fair.

      I have no idea about fixed priced used car dealership, I acknowledge my lack of understanding. That's why asking the OzB community's feedback on their experience. :)

      • Cheapest on there is $27,488 with those kms. No pictures, and in standard Glacier White. You offered only $500 more than that for a coloured one. I have no idea of the condition difference between the 2.

        It's just 1 of those things that you need to see you're already getting value out of. God, everyone keeps going on about how they want car sales to be fixed price and cut out the salesperson and the need to negotiate. Here's a prime example of why people can't handle that and can't see value in an advertised price any more.

        • I am not sure if another is still there, but last week, I also visited one with 29K kms and 26950 price tag.

          The price you mentioned is their asking price, and since it is not yet sold, that means no customer has agreed to that price yet.

          • -1

            @webtonmoy:

            I am not sure if another is still there, but last week, I also visited one with 29K kms and 26950 price tag.

            So why didnt you buy it?

            • +1

              @spackbace: Because each car is different and it did not tick a box.

              • +1

                @webtonmoy: And it might not tick that box for other buyers, which is why it's cheaper.

                • @HighAndDry: Already sold, so I guess everyones boxes could be different.

          • @webtonmoy:

            but last week, I also visited one with 29K kms and 26950 price tag.

            Then go buy that one and pretend you "negotiated" an extra $1-2k off the price?

        • +2

          God, everyone keeps going on about how they want car sales to be fixed price and cut out the salesperson and the need to negotiate. Here's a prime example of why people can't handle that and can't see value in an advertised price any more.

          I appreciate your comments and see them as probably the most qualified here, but this bit is just not right. It's a form of circular reasoning. It's like when Americans say "I'd prefer not to have a gun but since everyone has one I need to have one too."

          Car dealers are the ones who have to stop this nonsense; there is no-one else to blame.

            • +7

              @spackbace: Sellers set prices and have the right to refuse to negotiate. Buyers can buy or refuse to buy. Think about it.

        • +4

          |God, everyone keeps going on about how they want car sales to be fixed price and cut out the salesperson and the need to negotiate. Here's a prime example of why people can't handle that….

          Everyone does want to do away with time wasting negotiating, but unless all parties, including all dealerships, do so, there is distrust between parties. Hence why people still think it’s necessary to negotiate hard or you’ll be ripped off. Unless you can change the whole selling process to fixed price only, and have all consumers understand that, you will end up having people haggle.

          Example of how it can be done, look at Tesla. No middle man, no haggles with the website. No one asks the question OP has when buying a new Tesla.

          If all car makers take this model up, I guarantee there will never be a post like this for a new car.

          Now for used cars, can’t help, because there is no two exactly the same used car. People will negotiate with dealers, or privately, value is always arbitrary.

      • +3

        @webtonmoy Yeah but their tactic has worked hasn't it? It's a good car, it's price is great, you want it, you want them to sell it to you and here you are making a post about how you want it.

        • I posted it here only because I no longer want it ;)

          • @webtonmoy: What if I told you how to get them to accept 28k. Would you still buy it?

            • +4

              @Typical16-bitEnjoyer: No. It may be silly, but I did not feel like a valued customer there.

              • +1

                @webtonmoy: Because they wouldn't discount a further $800? That's the reason why?

                • +4

                  @Typical16-bitEnjoyer: No, it is their car/money, and they are at the liberty to decide on what discount they can offer.

                  It is because I did not like the experience of dealing with them, so I may not return to that dealership.

                  • @webtonmoy: So presumably if they accepted your offer of $28k you would have refused to purchase?

                    • +5

                      @Typical16-bitEnjoyer: At that day I would have accepted it. But I left the dealership saying it is my final offer and I would not return - so that will be it.

                      • +2

                        @webtonmoy: So them not accepting your ultimatum didn't make you feel valued?

                        • +1

                          @Typical16-bitEnjoyer: Car sales is a fun world 😂

                        • +4

                          @Typical16-bitEnjoyer: I am not exactly sure which of their attitude, un-acceptance, condescending tone, and that the car is very special because it is "executive driven", and other things that happened in that 30 minutes resulted in my decision, but you can do your own judgement.

                          • @webtonmoy: The problem is that your offer would've actually been offensive and also showed you weren't quite knowledgeable of the pricing.

                            Used car salespeople can be an arrogant bunch and when you advertise at a cheap price, it makes it very easy to hold your ground on the price. I've struggled to find a better car for cheaper that isn't white, so I think they're within their rights to hold their ground.

                            You took offense that they wouldn't negotiate, they got offended that you lowball offered.

                            1 side needs to buckle and based on that price it has to be you.

                            Don't look at the next 1 with the same lowball expectation. Be happy with advertised price and whatever comes off is just a bonus.

                            • +3

                              @spackbace: I understand your position, as you have been involved in the industry, mate.

                              The car is not still sold, after being there for about 2 weeks now. So all the other buyers so far think same as me too. I will buy when I find something that suits my criteria, and not be just happy with the advertised price.

                              • +5

                                @webtonmoy: I think $28K is a fair price. I totally agree from your experience of how it was handled you didn't want to purchase anymore. You want a good hard haggle session with the dealer but end of the day you are the buyer that closes the deal. You hold the cash. Not them. Don't let dealers close the deal. Walking away is a good tactic to let them know they failed to make a sale. Let them find another buyer for $1500 more. Who cares.

                                • +3

                                  @yellowfever: Thanks. I am sure they will eventually sell the car (at or below the asked price) to someone. I will buy something else too :)

                              • +2

                                @webtonmoy: I know a car in ACT dealer which is there for 4+ months and dealers does not want to come down 3K for 50K car. Does not make sense to me. I offered them 47k 3 days after advertising and then follow up after a month. I would imagine selling it 3K less and have the money in the bank and roll another car would be worth than holding a car for 4 month and sticking to a price. Interest rate and yard maintenance would have been more than that and depletion on rego also lower the value. However it seems like they think differently.

    • +2

      I still negotiated $800 off a "fixed price dealrship" last week on a 2018 outlander!

    • Couldn't agree more with this! I had a dealer who actually told me he was baiting people with the lowest price, just to get people to come in to see the car. Problem was he had no room to move from when I went there with cash ready to go.

      This was at the start of May and he even told me he had to get rid of the car end of the month. Regardless of me being planting myself in his seat and making it known I was a serious buyer with cash at the ready, he didn't come to the party on my price of 58K on a 62K list price. I kept watching the car and as it turned out he was forced to drop the price the next month to 59K. As I predicted, it sold within the week assumedly for around 58-59K (basically my price). So, I guess it was bad timing for me and a case of his agenda vs mine…

      • +1

        It happens, dealers do sell cars at losses. He could've been telling a story but I doubt it, no one wants to see a customer leave if a deal can be done.

        Maybe just wrote off the loss and moved on. He, or his buyer might have paid too much for it so he was stuck with it. Might have owed money due to repairs/mechanical work, who knows

        • +1

          It was a brand new car just prior to FY end. But agree he probably eventually had to take a loss. Shame it wasn't for me though!

  • +9

    Must be a good car if an executive drove it. Probably only to church and back. Make sure you get all the paint and fabric protection they offer.

    • +3

      I think (and a quick google search confirmed), the term "executive driven car" is very widely used in the car market, so does not really assure anything.

      • +3

        the term "executive driven car" is very widely used in the car market, so does not really assure anything.

        It could just as easily be an ex-rental car, with that sort of mileage.

        People working in the Auto Industry (dealers, manufacturers), tend to drive cars for only a few thousand kilometers before selling them as "ex-demo".

        • +3

          These would likely be "ex-Toyota" - staff cars, press demo cars, etc. Not likely to be rental

          Toyota aus would be the first owner in the book

          • @spackbace:

            These would likely be "ex-Toyota" - staff cars, press demo cars, etc. Not likely to be rental

            What makes you say that (except the OPs post where the salesman claimed that it was an executive driven car)?

            Toyota aus would be the first owner in the book

            Missing log books/owners manuals are easily replaced by used car dealers … so name in the book doesn't mean much either.

            • -3

              @salmon123: Because I've worked for a few different dealers, and know what stock we would get in and how they could be marketed

              And most log books are $50+, it's actually a PITA if they go missing

              Take the tin foil hat off. There's so many ex-rental and ex-fleet cars out there that there's no reason to pretend.

              • +5

                @spackbace:

                And most log books are $50+, it's actually a PITA if they go missing

                What's your point?

                Take the tin foil hat off. There's so many ex-rental and ex-fleet cars out there that there's no reason to pretend.

                My only point is that a salesperson will probably make up what ever they feel like to sell the car. Practically, there's probably no difference between a "executive driver" or "ex-rental" or "ex-fleet".

                • @salmon123: Look at the cover page of the service book. Majority of the time it's the RDR sheet printed out and pasted on there. This isn't easy to replicate later on.

                  It's not hard to physically sight the book and the car and draw your own conclusions.

                  Hell, ex-rentals can be better than the average privately owned because they make sure they service regularly

      • Executives drive like entitled douches. I wouldn't want to buy a car that's been thrashed, no matter how expensive the hoon's clothes were.

    • +12

      I have seen so many dealer principal's wife's cars that I assume there must be at least 250k dealerships in Victoria, or a standard amount but each dealer principal is so successful that they have a harem of 25 wives each.

      • Haha…

      • You’d think the head office executives would have high yield investment cars.

        • Maybe their wives had 17 cars each.

          One day we will solve this mystery.

  • +4

    But am I missing something?

    You found the cheapest car on carsales, and then wonder why they won't lower the price even more!?

    • That's what I am asking. Is it now a common practice in the used car industry that the cheapest ones are fixed priced? (btw, it was not cheapest)

      And if I did not expect to negotiate it lower, I would not claim myself to be a sincere ozbargainer. :)

      • +1

        That's what I am asking. Is it now a common practice in the used car industry that the cheapest ones are fixed priced? (btw, it was not cheapest)

        No

        Take a look on whirlpool or another car forum, see how much people are paying for the car new. I'd expect at least a 15% discount on that for buying a used model and then adjust for remaining rego, stamp duty, etc.

        Take a look at redbook/glass guide to see what they think the car is worth used.

        Between those sources you should be able to figure out how much you're willing to pay and how much you can squeeze the dealer.

        • +1

          😂

          Fk me, 15% off the cheapest car on Carsales?! Jees how much commission do you think these guys are making? What about the ones listed for $2-3k more than OP's choice?

          Stop making general claims. Not every used car is advertised for the same profit margin.

          • +2

            @spackbace: He said cheapest off the price of a new car.

            • -2

              @notfrodo: Which is pointless when op is looking at used.

              Oh and 15% off new cars is also a pipe dream

              • +1

                @spackbace:

                Oh and 15% off new cars is also a pipe dream

                Not sure what you're smoking … 15% off the price of a new, for a 1 year old used.

                In any case, 15% discount is what I'd expect, everyone will have their own expectation. Someone might be happy to buy a used car for a 5% discount on what a new one costs.

                • +1

                  @salmon123: RAV4 changed shape, went up to a $37k starting price. Op wants a 2.5L, cheapest new is $40k. Cheapest new awd is $43k.

                  OP's shape RAV4 would've been around $36k new when on special. So it's a $7k saving for OP's car as advertised.

                  So $29k for a 1yo isn't good value?

                  • @spackbace:

                    So $29k for a 1yo isn't good value?

                    Depends if those prices you've quoted for new are RRP or street prices. I suspect it's RRP (at least from what I see on redbook). If it's the street price, then yes, its good value.

                    RAV4 changed shape,

                    You raise an interesting point. My observation is that a major model change and price increases tends to push up prices for a 1 year old superseded model too.

                    • @salmon123: I quoted campaign prices, sales prices not RRP. I know because I sold them.

                      Redbook shows RRP before on-road costs.

                      And yes given the popularity of the new model, along with the price difference, it's surprising that the old 1 isn't more expensive. Though I think some dealers are trying to get more money on the used cars due to this. Those are the ones who will be negotiable

              • +1

                @spackbace:

                Which is pointless when op is looking at used.

                From the salesman's point of view, the cost of a new car is irrelevant, yes.

                From the buyers point of view, it's very relevant because it represents a substitute. The only reason someone looks at a used car is because they want to save money, compared to buying new. If the discount compared to new isn't big enough, then a buyer wont waste their time with a used car.

                Stop making general claims

                I didn't make a general claim. I made a specific claim - I'd expect to save 15% on the cost of new car to buy a used car instead. For someone that claims to work in the industry, you're speaking like an un-educated n00b.

  • +2

    On the positive side, it seems like this is either the best, or very close to best, you’re gonna get, so head down tomorrow, pick it up for the $200-less and stop worrying about whether you could have shaved another few hundred off.

  • We recently test drove a new top of the range Ford Everest at the dealership, sat down to talk money and was told no discount on listed price as they sell enough and demand is high, he was very blunt so we walked. Now driving a new Touareg, their loss at the end of the day.

    • So the Everest drove better than the VW?

      Were you buying a car or a discount?

      • +8

        Shopping for high service costs and repairs clearly :)

        • +11

          Spackbase your just being ignorant, where does it even say one drives better than the other? I'm guessing your just looking to be confrontational. If the salesman does not want to play ball than neither do I, plenty of choice out there so I don't have to put up with greedy salesmen.

          • -6

            @stemcell: What the salespeople did had no bearing on your car purchase in the end, that's what I'm getting at. It's not like you went to another Ford dealer down the road. Regardless of the lack of negotiation on the vehicle, you decided you'd rather drive another vehicle, simple

            Unless your budget couldn't really stretch to the Everest, but you were hoping they'd come down to your budget level, and they wouldn't?

            It's not a 'lost sale' when you go buy the competitors car anyway. Not that a Tiguan and Everest compete. 1 is a soccer mum's SUV, the other is a very capable off-roader.

            • +3

              @spackbace: Can you read?, Apparently not because yet again I have to correct you… Who said I bought a Tiguan?

              I hope you listen to your customers better!, I wanted a car that rode a little higher so the 4x4 was not the selling point. With the winter tyres on the Touareg it did an amazing job in the snow.

        • Bloom typical ignorant urban myth, all covered by warrantee and capped servicing costs.

          • @stemcell: Average service cost over 5 years is $600.. it's published. I had a VW and was glad to get rid of it, wait till you pass 5 years and it gets really crazy

            • @bloom: No intention of keeping it 5 years so your point is mute.

              • @stemcell: Enjoy your high yield investment :)

              • +2

                @stemcell: "Moot", not "mute". "your just being ignorant" -> "You're".

                Outrage over other people's apparent lack of intellectual capability seems a bit silly when you can't use correct grammar or spelling.

                • -1

                  @[Deactivated]: Using voice dictation you should give it a try.

                  • +2

                    @stemcell: "Mute" and "moot" are pronounced differently, and voice dictation will get your / you're correct. Nah, you just can't use English correctly.

                    • +2

                      @[Deactivated]: tYped this just for youse bet your the life at partys see what I did their :)

                      But seriously correcting grammar and spelling on a forum, don't you have anything more productive and fun to do in your life?

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