
		Buying a New Automobile

Buying a New Automobile

One certainly can just buy at the sticker price. With few exceptions (e.g. Saturn) you can get a much lower price by bargaining.

The generally recommended approach is to find the sticker price using a source like Consumer Reports, then allow additions to that price as you add options. I have a different approach that I like because it relies on THEIR knowledge of the prices, not my own. I've used this method twice and received about an 18%, then a 22% reduction from the sticker price.

This only works well when all of the below are true:

You know exactly what model you want
You know exactly what options you want
You are willing to wait for your car if necessary (it usually is not necessary)
You can be ready to walk out on a salesperson who resists giving you a price in this way (they will almost surely give you a price, but they don't like it because they think you will not come back).
You WILL return to them if they offered you a price that others can't beat by an agreed upon amount.

Here's what I do:

Study (online and possibly visiting dealerships) until you know exactly the model you want
Decide on the exact set of options that you want - This step is important - specifically list all options that you want
Once you know exactly what you want..
Go to the dealer from which you would prefer to buy (you may prefer one that is close to you, or one that has been helpful in the past). This dealer will end up giving you a price and they will be your "Winning Dealer."
Show the salesperson a printout detailing the exact model and list of options that you want.
Tell the dealer that you will visit X number of other dealers (maybe 2 others) and that you will show them the same printout.
Tell this first dealer that you want her (or him) to give you a price that the other dealers will not be able to beat by YY dollars (I suggest that $YY is about 5% of the purchase price - so, for a list price of $15,000, it would be about $750).
Further, tell the salesperson that if the other dealers cannot offer a price that is at least $YY lower, you will come back. However, if the other dealer DOES oiffer a price that is at least $YY lower, you will NOT be back, and you will buy from the other dealer.
The salesperson will likely stall and complain. I once had to stand up to leave before they finally gave me a price. So be insistent. You can say "I'm offering you first. If you don't give me such a price, I'll get one from another dealer and you will have to beat their price by YY dollars."
For our example, we'll say the list price is $15,000, the YY price differential is $750 and the Winning Dealer has offered you a price of $13,200.
Time for the next few dealers..
Once you have a price that supposedly cannot be beat by $YY (e.g. $750) then go to the second dealer and present your printout of the exact car you want, and provide the quote from the other dealer (e.g. $13,200). Tell the new salesperson that you require a price that is at least $YY below (e.g. $12,450 or lower). If they offer you a price that is lower, but not $YY lower (e.g. say this second dealer offers $12,850) then you thank them, note down their new low price (e.g. $12,850), and move on to the next dealer (yes, potentially passing on a deal that is lower than the one from your Winning Dealer - but remember, you promised that you will be back unless someone offers you $12,450 or lower).
If some dealer actually offers a price that is at least $YY lower than the first offer, they become your new Winning Dealer, and all dealers must beat that NEW price by $YY. (For our example, if a dealer offers $12,400, then that becomes your Winning Dealer and others must beat $12,400 by your $750, or $11,650.) However, this has never happened to me because the first dealer has always given me a price that the others cannot beat by my $YY price differential.
Time to buy..
Return to the Winning Dealer (likely the first dealer you saw) after you have seen the X number of dealers that you had planned.
Tell the Winning Dealer that all they must do is match the lowest price you were given (in our example, you are back to the original dealer who offered you a price of $13,200 and you ask them to match the offer of $12,850). In my experience, they always are willing to match the low price you were given. (If not, remember that you only promised to return. You didn't promise to buy from them. So if they do not match the low price, you have the option of going to the dealer that gave you the lowest price.)
Enjoy the new car and please share your story with me .

Let me know if I can answer any questions or make this process more clear. Also, I'd appreciate knowing of any results you have with this method.