New car purchase

Ok, so it may not really fall under the "Repair" topic....


Just wondering about purchasing a new Car what is considered a good deal?

If you can get the car for the Invoice price is that a good deal? It appears that car dealerships have gotten smarter knowing that people would offer $300 over the Invoice price and was told that the Invoice is actually more than what the dealer pays for the car to help obtain a higher profit.

So what is a good price?
Invoice price?
10% below invoice price?
$300 above invoice price?

 

This is where the fallacy comes in. You don't do well working off of invoice price.

You want to work UP from manufacturer's cost. Go to edmunds.com or pick up some good books in the library---they have tons of material on this.

 

I checked Edmunds a few times and could only find MSRP, Invoice or their True Market Value, but not the Manufacturing Cost.

Where can I find the Manufacturing Cost? Is it off some other link?

 

You likely have buy something from Edmunds (a subscription) to get that type of data.

 

You may not like this answer, but you NEVER get a good deal buying a new car. I'm 55, I've never owned a new car in my life. I buy one year old cars, nice ones from people who got in over their head getting good deals from new car dealers. Admittedly I've not always driven the exact color or options that I may have wanted at the minute I wanted it. But the difference of $150-$400 per month over the past 40 years, compounded, has put a lot of money in my pocket, not some dealers'.

Just my opinion.

Frank

 

Amen, Frank. Most people would be amazed at the number of car owners on the road who are "upside-down" on their cars (many not even realizing it), owing thousands more than the current insurance value of the car. Big surprise when you owe $20,000 on a car, you skid off the road in a snow storm and total it, and the insurance company gives you $15,000 (or LESS) for it. And, of course, the dealerships are more than happy to give you $5000 trade in on a vehicle you owe $10,000 on and add the difference to the new loan, DOUBLE upside-down!

 

You betcha tow guy! The people that really crack me up are the one's that say, "Man, I'm really making out! My boss is paying me 30 cents a mile to use my own vehicle, and my car gets 30 MPG so even with gas being high I'm makeing a profit". Yet the average car on the highway today costs closer to 60 cents a mile to operate.

There's also the people who can't make up their minds exactly what kind of car is going to make them "happy" and change cars every 18 months to 2 years. We rented a house once to a nice couple who commented "we wish we could buy this house, but we just cant afford it". Both of them worked, AND EARNED MORE THAN MY WIFE AND I, but they had combined car payments of alsmost $800 per month.

In the next 5 years they bought 5 NEW CARS, 3 for him, 2 for her. Each time they told me how they had "gotten over on the dealer/made money on the car, etc. They still earned more than we did, still couldn't afford a house. We offered to sell them the house for $2,000 down and finance it for them. They didn't have the $2,000!, wanted me to take less down or cut the price of the house.

The upshot of this was that I gave them one year to come up with the $2,000, and as a sweetener FOR EVERY $100 EXTRA THEY CAME UP WITH, I WOULD CREDIT THEM WITH $150, IF THEY CAME UP WITH $6000 TOTAL, I WOULD TAKE $2000 OFF THE PRICE OF THE HOUSE. One year later they managed to come up with the minimum $2,000, but they did have a new Ford Expedition in their driveway! BTW, over the course of that 6 years (1995-2001), my wife got rid of her '92 Jeep Cherokee for a '98 Subaru Forester, I got rid of my '95 Olds 88 for a '97 Grand Marquis. At the time I was still working and putting 50K miles per year on cars but kept the Grand Marq until this spring, we still have the Subie!

Not sure what they're driving now, but at least they pay me the mortgage on time!

Frank

 

Back to the question at hand. Joe has the right idea, don't take a dealers price and try to work back! He has you right were he wants you, working with his number. The money you refer to that is made even if a dealer sells a car for invoice is called holdback money around here. Depending on model it can be 500.00 to 3000.00. This is money a dealer needs to keep his lights on even if things are bad and he sells the current models for invoice. What I do is find out the invoice amount of a car I am interested in, look around in my state and say 100 miles around. Compare to see what you find. In todays market the numbers should be fairly close. A car that invoices for 20,000 and stickers for 23,000 would be a good example. On this I would offer 18,000 to 4-5 dealers and see what happens. You can sure bet that they have no problem attempting to get 3000.00 over invoice out of you. If all 5 take the offer (which they probably won't) I would start back with the first one with YOUR new offer of say 17,500. If four decline your 18,000 and one accepts you can bet that you have found a dealer who is ready to move the vehicle. My local dealer really did a good job for me my last time out. I decided what I was going to spend and set about getting as much truck as I could for that number. At first it was a two year old model (2000) with 30,000 miles. Two weeks later it was one year old (2001) with 12,000 miles. By this time I had my salesman working for me because he new if he sold me a car it would have to be super buy. Three weeks into the ordeal he calls with a truck I have to have based on my money. 2002 with 400 miles, sticker almost 29,000, paid 22,700. 2002 model bought in Novemeber of 2002. Now is the best time of year to start shopping and the end of the month is better than the first of because qoutas for the month are looking these guys in the face......Mike

 

Consumers Reports has some general guidelines on what one should pay for a new car. I believe they publish that issue in September of every year.
If you can live without a new car one one or two years old will give you good service and save many thousands of dollars.

 

I agree with all here.

Always work UP from cost, never down off of sticker!