New Car Price Negotiating Power at Dealerships

Lwapubyby on 25/10/2020 - 20:52

Hi ozb,

I'm planning to buy a new car from a dealership and would like to ask from more experienced people about price negotiating. I've owned a couple of used cars bought from private sellers and have never visited a dealership before.

Due to circumstances and preference I'd like to buy a new compact SUV in Sydney and my budget is between $35-$40K.

  • How much negotiating power do I have if I either leased/financed or paid cash?
  • Would dealers rather offer extras/services over price cuts?
  • Which are the brands/dealerships known for better bargaining?
  • As much as I dislike low-balling, what is the rule of thumb for basing your initial offer on?

Please don't turn this thread into a discussion around a marque or badge – car preferences are incredibly subjective and as much as there are people, there are opinions.

Thank you.

Automotive

Comments

  • Melb69 on 25/10/2020 - 21:33
    +7

    Member since 1hr

  • yellowfever on 25/10/2020 - 21:34
    +2

    Be prepared to slap a realistic offer on the dealers desk and being prepared to walk (physically) is your biggest negotiation skill.

    The offer has to be realistic. And you will know if it's realistic because you have done your research.

    However slapping the desk with finance is never going to look very solid.

    • whooah1979 on 26/10/2020 - 07:35
      +4

      Dealers love finance. Its maximum profit with minimal effort.

      • BewareOfThe Dog on 26/10/2020 - 13:16

        Yes, and they will do what they can to get you approved, even if it means 'adjusting the figures'.

    • BewareOfThe Dog on 26/10/2020 - 13:15

      My Ex-Boss was a new/used car salesman. He said walk out the door at least 2 to 3 times. If they have your number, THEY WILL chase YOU!

      No trade is even better.

  • Sum-Ting Wong on 25/10/2020 - 21:39
    +1

    as much as there are people, there are opinions

    Opinions are like arseholes - everyone has one.

  • oscargamer on 25/10/2020 - 21:59
    +4

    You will find the best deal if you find the actual car you want, on the actual forecourt of a dealer. That means they have already paid for it and need to sell it.

  • dins on 25/10/2020 - 22:00
    +2

    If you do your research and check out forums like Whirlpool etc (search "$" and jot down prices people are getting) and contact one or two car brokers like autoexpert etc you should be able to confidently figure out a reasonable price range. It has to be a fair price some on forums might mention really low prices just ignore those most likely those deals were done via family/friend discounts/connections etc. Then once you have a reasonable price range in mind start ringing up all the local dealers around your area asking them for their best price and give them a figure of around $500 under your target range if asked. If your target price is reasonable or thereabouts they will play ball. Lowball figures will only lead to you wasting your and everyone else's time and you might pass over decent offers in the process as well.

    Do not ever think that the dealer holds all the cards. They'll ask you what sort of price you are looking at and when they do don't be afraid to tell a fib or two (ie for instance let's say your fair target price range is $30.5-31k then tell them that another local dealer/car broker has already offered $30k but you are shopping around for a slightly better deal with extras before signing on the dotted line). If that is a fairly reasonable price they will ring back even if they initially are hesitant to deal at that price. Also tell them that you are in no rush and already have a car but will jump on a good deal if offered even on that same day.

    When they are prepared to play ball they will usually play a game along the line of "I'll talk with my manger" and start upping the price each time they ring back. When they do that's a good time to start adding 12 months rego (if only 6 months is being offered), mats, tint, full tank of fuel, annual service discounts (tell them that your intention is to service your car with them once purchased) etc. If you remain firm and follow that process you should be able to deal around $30.5k or a couple of hundred more with a fair few extras thrown in.

    Also best to do this towards the end of the month (monthly sales targets). If you do your research properly you will be the one holding all the cards. Good luck!

  • Menzoberranzan on 25/10/2020 - 22:05
    +1

    The ming mole is real. She will try her very best to convince you to buy car interior and exterior protection packages because imagine how the hot QLD sun will damage your leather seats or what if you spilled coffee on them?! Never mind my previous car had leather seats and the sun did nothing to them.

    • Muzeeb on 25/10/2020 - 23:17

      Which car? I'm guessing the seats weren't really leather if you paid less than $70k for it.

  • peterw1 on 25/10/2020 - 22:08

    my experience was that I could not get anywhere near the price that a car broker could. Test it for yourself. Do your best discount negotiation and at the same time engage 2 or 3 car brokers. See who comes up with the lowest price. The thing is you need to know what car you want model, grade etc and what if any options you want. Once this is known release the brokers and be amazed.

    • wapubyby on 25/10/2020 - 22:10

      Thanks, first time I've heard about this service. I'll look into that, but do you have experience with particular brokers?

      • peterw1 on 26/10/2020 - 11:12

        Use the brokers that are linked with sites like drive.com.au, autoexpert and caradvice. I told all of them that I was using another broker and the best price wins. I ended up with georgie. In the end the price difference between brokers was minimal but I saved > $2000 off the best price I could negotiate.

    • charzy on 25/10/2020 - 22:34
      +3

      I engaged two brokers and both were higher than what I got from the dealer direct. When I responded to them with the price I got it their reply was pretty much I was spouting BS to get a lower price but whatever, I did my research and was happy with the price I paid.

    • Amaris on 25/10/2020 - 22:57
      -1

      my experience was that I could not get anywhere near the price that a car broker could.

      You must be a very bad negotiator my friend. I've always been able to get much more than the broker promised. Car buying services are as dishonest as car dealers.

      • peterw1 on 26/10/2020 - 11:14

        you are probably right about the negotiation skills.
        How can they be dishonest when they don't get paid if they don't win your sale. Its a free service. Confused.

        • Amaris on 26/10/2020 - 17:32

          Dishonest because of the BS they tell you. It’s the same (but different) BS that car dealers give you as well. Read the long post below about car dealer BS

      • BewareOfThe Dog on 26/10/2020 - 13:18

        Mates rates?

  • Euphemistic on 26/10/2020 - 08:15

    Please don't turn this thread into a discussion around a marque or badge

    But it is a valid point of discussion. You aren’t going to get the same discount on a high demand vehicle you need to order as you will with a model that has plenty of stock in the dealer network.

  • Ryanek on 26/10/2020 - 09:03
    +2

    Shop towards the end of the month, as dealers are more inclined to negotiate to meet monthly goals.

    • BewareOfThe Dog on 26/10/2020 - 13:18

      Especially if they are overstocked, and have committed to x per month for the next 6 months, and business is slow.

  • Tnetennba on 26/10/2020 - 12:24
    +2

    Don't mention finance or say if you're paying cash etc. They will probably give you a sharper price if you're financing through them, and then make all their profits on the exorbitant interest rate you end up with.

    Like the other commenter said, narrow down which car you want, model etc. Take your time, test drive a number of them, think about what options you might want. Once you know the car & model, work out a price you are willing to pay and stick to it. Put the offer to the dealer and say, this is what you'll pay today.

    They will come up with excuses as to "how can I feed my family on that" or "we are selling these with such a tiny margin, I'd be losing money!". Don't fall for it. It's complete BS. They will offer to show you "the books" which shows their profit margins - all of it is a crock.

    They'll probably take it to their sales manager and discuss what they are having for dinner (making you wait) - that is the person you want to negotiate with ideally. If they come back with a crappy price, just say no thanks, I will pay $x today, may I speak with the sales manager please? The sales manager can give you the bottom line and has the power to actually negotiate.

    Stay firm, give them your number, and be prepared to walk away. You hold all the power. They will call you or stop you at the door and do the deal.

    Once you've signed the dotted line, make sure to read the contract closely. Some will try and weasel out of delivery deadlines by saying the car is of unusual spec, things like that. They may want you to waive a cooling off period - you don't have to but you'll probably get the car sooner if you do. If you've gone in prepared and know your price, you probably don't need any cooling off periods.

    Lastly, don't opt for the accessories that the pretty girl offers you. Paint protection, seat protection, tinting, premium delivery (whatever that is) etc. Not worth it unless they throw it in for free (they won't). Get some mats as well, but don't pay for them. They'll always throw in a set of mats.

    • muckingfuppet on 26/10/2020 - 12:37
      +1

      This… Save your time of the salesman wasting time having to "check with the manager' on every little decision.

      Go straight to them.

      • BewareOfThe Dog on 26/10/2020 - 13:21

        Generally, the salespeople rarely go the sales manager and ask for a better price, unless they are new. They just go in to a door, and just have a general chat, and may ask for advice?

  • [Deactivated] on 26/10/2020 - 14:27

    I took the orange pill and went with the power of unintended sarcasm.

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