5 ms·

Roadster to new-car buyers: Skip the dealer, we’ll haggle for you

18 points by sgustard 11y ago

petersouth 11y ago
I recently started a similar service and quickly got out of it. Even though I was offering to negotiate deals for free there was lackluster interest. Buying a car from a dealership is painful it seems people still want to do it for the experience, or think they can do better themselves (paying a higher price in the process). I would like to know if these people are licensed brokers or how they will handle that in states that require it. Truecar has a decent system in place (although there are problems too) and I think it's hard to beat the out especially taking fees from both sides with a significant portion on the buyer.
- dennisnedry 11y ago
  I was not aware that TrueCar was a buying service. I'm looking for a new vehicle myself and just checked them out. Thanks for the tip!
  - atwebb 11y ago
    A lot of places offer buying services as well, USAA offers one through Truecar, there's also Carvana as well. Truecar was close to what we paid though a little higher. It was a good jumping off point when comparing real life to MSRP/listing prices. If you haven't bought before, focus on the out the door price.
BetaCygni 11y ago
They get "up to 1.25%" commission from the dealers, no thanks. If I hire someone for advice I want that person to be paid only by me and by people like me.
- joosters 11y ago
  It's an odd pricing scheme. So my potential negotiator gets paid more if they negotiate a higher price? Don't we want the motivation to work the other way around?
  - yitchelle 11y ago
    Would it matter if one of your requirements is price? I guess there is always the question of trust. ie Would you trust him to you the car you want if she is being paid by the dealership?
  - analog31 11y ago
    It does seem odd. But it seems like there are at least a couple sources of discipline. The first is that you could call two brokers and take the one with the best offer, or use other kinds of pricing services for comparison. The other is that you could still negotiate directly with the dealer yourself. Also, while they're paid by the dealers, the dealers are still competing with one another for the chance to pay this commission. Hopefully this is just a small step towards buying cars directly from the manufacturer.
    - lsc 11y ago
      > It does seem odd. But it seems like there are at least a couple sources of discipline. The first is that you could call two brokers and take the one with the best offer, or use other kinds of pricing services for comparison. The other is that you could still negotiate directly with the dealer yourself. Yes, of course, that's what I do now. but then what value does this broker service provide? That's the problem with most brokers. Negotiation is unpleasant. I am fundamentally willing to pay money to get the benefits of negotiation without dealing with this unpleasantness. The problem is that in most areas where negotiation really matters, all the middlemen who have the information required to negotiate well for me all have more important relationships with my counterparties than with me. A big example is body shops; I mean, I spend probably about half my time contracted out through a body shop of one sort or another, The thing is, at the same job, negotiation quite often can mean a 30% difference in pay for me. And I'm bad at negotiation, so it would maybe make sense to outsource that. The problem is that the companies that normally handle that, the body shops, have strong relationships that matter with the companies that actually foot the bill. Their relationships with contractors like me matter a lot less, so they are my counterparty in the negotiation. Writers and actors have agents to handle that sort of thing; but the important bit there is that agents are paid by the person they are representing, and paid more the more the person they are representing gets.
raesene4 11y ago
For me, the business model of this kind of service is important. Where a commission is paid by the dealer to the service, it would seem to me that there's a potential for a conflict of interest as the service gets more money, based on how much the dealer charges for the car. In that kind of setup is there really a good incentive for the service to haggle hard on the customers behalf...? I'd prefer a payment model based on either a flat fee paid by the customer, or perhaps something based on the amount saved from the list value of the car.
mhb 11y ago
I liked CarWoo, but it is no more.
- deleted 11y ago
  [deleted]
lsiunsuex 11y ago
I despise the experience of buying a car so much that I've just given up haggling and pay the price of the car. In my last 2 purchases, I've found not haggling causes them to take about a grand off the top (without me asking for it) which is good enough for me. This was both on a pretty reasonable Hyundai Elantra for the wife and my more expensive Acura RDX - point being - doesn't matter if it's a cheaper car or more luxury - if they have wiggle room, they'll do it anyways
bane 11y ago
I recently bought two cars, here's the relatively pain-free process I went through. 0) Wait until the model years are flipping on the car you want, they need to get last model year inventory off the lot 1) Used Costco to get a prenegotiated price. There's some other things attached with it, but walking in with a price below MSRP opens up the negotiations. 2) Used a couple other sites (e.g. [1]) to get price quotes on the make/model/trim/configuration I wanted. A deluge of emails and phone calls occur within a day or two after this. 3) Simply tell each responding dealership that you are soliciting offers from all the local dealerships and to email you with their best price. 4) Pick a dealer, not the one with the lowest price, but it doesn't matter which one really (but some will try to differentiate with special warranties or other things), open with the Costco price, then follow with the lowest quote you received. Say "beat this and I'll buy my car here, otherwise I'm going to these guys". And don't budge. 5) They'll always come back with a lower price, maybe not by much, but it'll be lower. Be willing to leave if they don't. Congratulations you've just negotiated a low price for your new car. Watch the price buildup for unnecessary fees and fight them on those (or have them throw in overpriced things like floor mats or cargo nets or whatever in exchange). 6) Once you get to finance, don't necessarily accept their rates, the dealership finance people can solicit financing on your behalf from other banks. Simply have evidence that somebody can offer you a loan cheaper than the dealership can offer (Credit Unions are great for this), and haggle a little with them, they'll eventually use their network to do all the legwork for you and it can save you quite a bit of money. Bonus round: 1) Take your old car to Carmax and get a quote from them to buy your car. 2) During trade-in talks at the dealership see if they'll meet or exceed Carmax's quote. 3) If they don't, you have a guaranteed buyer (Carmax) at a good price. If they do, you get to unload your car hassle free. 4) Take car to Carmax and sell it, or try to get more on the private market. Carmax takes about 30 minutes and the people are pleasant. It took about a day in each case to buy (and sell) each car, but I managed to save between $3-5k below the retail price in each case, then made above the KBB estimates on my old cars. There wasn't any emotion involved, nothing got heated and the negotiation portion of the process took about 20 minutes at the dealer, most of it was the salesperson waiting for their manager to approve a price reduction. I'd describe the experience both times at two different dealerships as "pleasant", and because we had the negotiations locked up, spent most of the time making polite conversation with the salesperson. 1 - http://usnews.rankingsandreviews.com/cars-trucks/best-price-program/ http://usnews.rankingsandreviews.com/cars-trucks/best-price-...
briHass 11y ago
I used TrueCar (and other similar services) as a starting point, but was able to negotiate a better price in person (~6% lower) than what TC quoted (what they considered an 'excellent' price.) I actually didn't find the process to be painful at all. My salesman was friendly, willing to work with me, and gave pretty close to the final price right out of the gate. You're never going to do better with car-buying services than just communicating with the dealers, especially their fleet or online managers. That said, one should figure out what they value their time at, and realize that they can easily spend hours/days trying to haggle that last $500 when it doesn't make sense from a time investment standpoint.
GFK_of_xmaspast 11y ago
Don't lots of credit unions already offer this kind of service.
RudiThun 11y ago
Hi, I’m the COO of Roadster. Thought it would be worth sharing a little more on our business model - and the cost structure of dealers. It’s rare that we don’t get a better deal for consumers than they can negotiate themselves. Why? First, we work directly with the GM or fleet managers at dealers who are focused on volume sales, instead of a commissioned salesperson at the dealer. The 1.25% fee we charge dealers is actually cost neutral (or better) for the dealer as they otherwise pay their own sales people 25% - 30% of the profit on any deal in commissions. By the time we engage the dealer, we have a customer ready to buy and it’s a super efficient transaction. Second, we negotiate to get our customers the best outcome across the whole deal, not just the upfront price. If you don’t focus on the other parts (trade-in, finance/lease terms, rebates/incentives, avoiding extra options you don’t want, etc.), you will likely have a less-than-ideal outcome. We work with customers every day where people thought they had a great price from a dealer, but we end up saving a bunch on their monthly payment. Finally, we offer our customers transparency (we share every aspect of the deal before you make any commitment) and time savings (how much is your weekend worth?). Happy to answer any questions about our service.

18 points by sgustard 11y ago

I recently started a similar service and quickly got out of it. Even though I was offering to negotiate deals for free there was lackluster interest. Buying a car from a dealership is painful it seems people still want to do it for the experience, or think they can do better themselves (paying a higher price in the process). I would like to know if these people are licensed brokers or how they will handle that in states that require it. Truecar has a decent system in place (although there are problems too) and I think it's hard to beat the out especially taking fees from both sides with a significant portion on the buyer.

dennisnedry 11y ago
I was not aware that TrueCar was a buying service. I'm looking for a new vehicle myself and just checked them out. Thanks for the tip!
- atwebb 11y ago
  A lot of places offer buying services as well, USAA offers one through Truecar, there's also Carvana as well. Truecar was close to what we paid though a little higher. It was a good jumping off point when comparing real life to MSRP/listing prices. If you haven't bought before, focus on the out the door price.

BetaCygni 11y ago

They get "up to 1.25%" commission from the dealers, no thanks. If I hire someone for advice I want that person to be paid only by me and by people like me.

joosters 11y ago
It's an odd pricing scheme. So my potential negotiator gets paid more if they negotiate a higher price? Don't we want the motivation to work the other way around?
- yitchelle 11y ago
  Would it matter if one of your requirements is price? I guess there is always the question of trust. ie Would you trust him to you the car you want if she is being paid by the dealership?
- analog31 11y ago
  It does seem odd. But it seems like there are at least a couple sources of discipline. The first is that you could call two brokers and take the one with the best offer, or use other kinds of pricing services for comparison. The other is that you could still negotiate directly with the dealer yourself. Also, while they're paid by the dealers, the dealers are still competing with one another for the chance to pay this commission. Hopefully this is just a small step towards buying cars directly from the manufacturer.
  - lsc 11y ago
    > It does seem odd. But it seems like there are at least a couple sources of discipline. The first is that you could call two brokers and take the one with the best offer, or use other kinds of pricing services for comparison. The other is that you could still negotiate directly with the dealer yourself. Yes, of course, that's what I do now. but then what value does this broker service provide? That's the problem with most brokers. Negotiation is unpleasant. I am fundamentally willing to pay money to get the benefits of negotiation without dealing with this unpleasantness. The problem is that in most areas where negotiation really matters, all the middlemen who have the information required to negotiate well for me all have more important relationships with my counterparties than with me. A big example is body shops; I mean, I spend probably about half my time contracted out through a body shop of one sort or another, The thing is, at the same job, negotiation quite often can mean a 30% difference in pay for me. And I'm bad at negotiation, so it would maybe make sense to outsource that. The problem is that the companies that normally handle that, the body shops, have strong relationships that matter with the companies that actually foot the bill. Their relationships with contractors like me matter a lot less, so they are my counterparty in the negotiation. Writers and actors have agents to handle that sort of thing; but the important bit there is that agents are paid by the person they are representing, and paid more the more the person they are representing gets.

raesene4 11y ago

For me, the business model of this kind of service is important. Where a commission is paid by the dealer to the service, it would seem to me that there's a potential for a conflict of interest as the service gets more money, based on how much the dealer charges for the car. In that kind of setup is there really a good incentive for the service to haggle hard on the customers behalf...? I'd prefer a payment model based on either a flat fee paid by the customer, or perhaps something based on the amount saved from the list value of the car.

mhb 11y ago

I liked CarWoo, but it is no more.

deleted 11y ago
[deleted]

lsiunsuex 11y ago

I despise the experience of buying a car so much that I've just given up haggling and pay the price of the car. In my last 2 purchases, I've found not haggling causes them to take about a grand off the top (without me asking for it) which is good enough for me. This was both on a pretty reasonable Hyundai Elantra for the wife and my more expensive Acura RDX - point being - doesn't matter if it's a cheaper car or more luxury - if they have wiggle room, they'll do it anyways

bane 11y ago

I recently bought two cars, here's the relatively pain-free process I went through. 0) Wait until the model years are flipping on the car you want, they need to get last model year inventory off the lot 1) Used Costco to get a prenegotiated price. There's some other things attached with it, but walking in with a price below MSRP opens up the negotiations. 2) Used a couple other sites (e.g. [1]) to get price quotes on the make/model/trim/configuration I wanted. A deluge of emails and phone calls occur within a day or two after this. 3) Simply tell each responding dealership that you are soliciting offers from all the local dealerships and to email you with their best price. 4) Pick a dealer, not the one with the lowest price, but it doesn't matter which one really (but some will try to differentiate with special warranties or other things), open with the Costco price, then follow with the lowest quote you received. Say "beat this and I'll buy my car here, otherwise I'm going to these guys". And don't budge. 5) They'll always come back with a lower price, maybe not by much, but it'll be lower. Be willing to leave if they don't. Congratulations you've just negotiated a low price for your new car. Watch the price buildup for unnecessary fees and fight them on those (or have them throw in overpriced things like floor mats or cargo nets or whatever in exchange). 6) Once you get to finance, don't necessarily accept their rates, the dealership finance people can solicit financing on your behalf from other banks. Simply have evidence that somebody can offer you a loan cheaper than the dealership can offer (Credit Unions are great for this), and haggle a little with them, they'll eventually use their network to do all the legwork for you and it can save you quite a bit of money. Bonus round: 1) Take your old car to Carmax and get a quote from them to buy your car. 2) During trade-in talks at the dealership see if they'll meet or exceed Carmax's quote. 3) If they don't, you have a guaranteed buyer (Carmax) at a good price. If they do, you get to unload your car hassle free. 4) Take car to Carmax and sell it, or try to get more on the private market. Carmax takes about 30 minutes and the people are pleasant. It took about a day in each case to buy (and sell) each car, but I managed to save between $3-5k below the retail price in each case, then made above the KBB estimates on my old cars. There wasn't any emotion involved, nothing got heated and the negotiation portion of the process took about 20 minutes at the dealer, most of it was the salesperson waiting for their manager to approve a price reduction. I'd describe the experience both times at two different dealerships as "pleasant", and because we had the negotiations locked up, spent most of the time making polite conversation with the salesperson. 1 - http://usnews.rankingsandreviews.com/cars-trucks/best-price-program/ http://usnews.rankingsandreviews.com/cars-trucks/best-price-...

briHass 11y ago

I used TrueCar (and other similar services) as a starting point, but was able to negotiate a better price in person (~6% lower) than what TC quoted (what they considered an 'excellent' price.) I actually didn't find the process to be painful at all. My salesman was friendly, willing to work with me, and gave pretty close to the final price right out of the gate. You're never going to do better with car-buying services than just communicating with the dealers, especially their fleet or online managers. That said, one should figure out what they value their time at, and realize that they can easily spend hours/days trying to haggle that last $500 when it doesn't make sense from a time investment standpoint.

GFK_of_xmaspast 11y ago

Don't lots of credit unions already offer this kind of service.

RudiThun 11y ago

Hi, I’m the COO of Roadster. Thought it would be worth sharing a little more on our business model - and the cost structure of dealers. It’s rare that we don’t get a better deal for consumers than they can negotiate themselves. Why? First, we work directly with the GM or fleet managers at dealers who are focused on volume sales, instead of a commissioned salesperson at the dealer. The 1.25% fee we charge dealers is actually cost neutral (or better) for the dealer as they otherwise pay their own sales people 25% - 30% of the profit on any deal in commissions. By the time we engage the dealer, we have a customer ready to buy and it’s a super efficient transaction. Second, we negotiate to get our customers the best outcome across the whole deal, not just the upfront price. If you don’t focus on the other parts (trade-in, finance/lease terms, rebates/incentives, avoiding extra options you don’t want, etc.), you will likely have a less-than-ideal outcome. We work with customers every day where people thought they had a great price from a dealer, but we end up saving a bunch on their monthly payment. Finally, we offer our customers transparency (we share every aspect of the deal before you make any commitment) and time savings (how much is your weekend worth?). Happy to answer any questions about our service.