6 ms·

Can someone summarize the secrets to me? I noticed the article was 11 pages long.

by jostmey 12y ago

dyeje 12y ago
I'm not sure what secrets you're referring to, but it is a great piece that is well worth the read.
grecy 12y ago
The secret is basically that they're ripping you off, which pretending they're helping you, and under no circumstances should you buy a car on credit because they use that to obscure the real price. Also, even if it pisses them off, haggle and get prices from multiple dealerships, then play them off against each other. If they won't play, walk away to another dealer.
- ScottBurson 12y ago
  It is actually possible to buy a car on credit without getting ripped off. The way I did it was, having already gotten agreement on the selling price, and having a good estimate of the likely interest rate, I decided what loan term I wanted and computed the corresponding monthly payment based on these variables -- all before sitting down to do the final negotiation. I declined all dealer add-ons and all financing offers that didn't match my precomputed numbers. Eventually they made one that did. I'm not saying I got the best deal possible; I didn't shop dealerships. (OTOH I'm not sure that would have worked, as the model I was buying was in demand.) But basically, I think I did okay.
  - ryanmarsh 12y ago
    This is exactly how I buy them. I used to sell them. Know exactly what you want. Pit three dealers against each other for the same car (exact product code) for a few days. Have funding secured already from a credit union but don't tell the dealer until you're in their finance office and they fail to provide better terms than your CU did
    - r00fus 12y ago
      That's how we got our Sienna. I got it down to 2 salesmen at different dealers (one a fleet sales), and was about to save a last $300 on one, but the competing dealer agreed to come to our house and deliver the car (which was huge at the time b/c we just had twins which was the reason we went minivan), so we went with him. Felt the pricing was much fairer this way. I'll probably go with TrueCar.com or something like that to automate the process next time, unless I get a Tesla.
    - xn 12y ago
      Going back and forth between a few dealers on the exact car I wanted to buy worked for me. When I got the price down to where one of the dealers would rather pay me $200 than lower the price, I was done. I documented my experience at http://xn.pinkhamster.net/blog/misc/buying_an_audi_under_invoice.html http://xn.pinkhamster.net/blog/misc/buying_an_audi_under_inv...
  - jandrese 12y ago
    I bought my last car on credit, but I did it through my bank and got an insanely low rate (1%). The salesman whined constantly about how my bank was terrible at their job and that we should just use the super convenient in-store financing instead. I still got ripped off, especially on the trade in--but my wife was rather pregnant and close to being put on bedrest at the time and we didn't want to have to deal with Craigslist or whatever for selling her old car.
ghaff 12y ago
I'd probably word grecy a bit differently. As much as possible, separate the purchase from the financing from the trade-in. Easier said than done for some to be sure, but get an idea of alternative payment options if you don't have the cash or existing line of credit. And know what you'd be willing to take for a trade given what think you think you could get for the vehicle on Craigslist or donating it. And, of course, have your max price for the vehicle in question given invoice price and other factors.
- tmuir 12y ago
  One thing to keep in mind, if your trade in has significant value, is that your trade in amount reduces the tax you pay on the new price. For example, if you buy a $25000 car, and have a trade in value of $10000, you only pay tax on $15000.
  - ghaff 12y ago
    Good point. In my case, I basically only buy a new car when the old one is on its last legs so we're talking about $1K-$2K at most.
  - jandrese 12y ago
    That also assumes the dealer doesn't rip you off on the trade in, which is pretty rare. Selling the car yourself for cash is pretty much always better, even if you aren't a slick salesman type.
  - dragonwriter 12y ago
    This is not true in California; you pay tax on the whole price, even if part of it is paid via a trade in. http://www.boe.ca.gov/sutax/faqpurch.htm#9 http://www.boe.ca.gov/sutax/faqpurch.htm#9
- cpwright 12y ago
  I've had more luck negotiating with a monthly payment in mind. I know what my trade is worth, how much I can put down (easier if you can just answer zero), and what I what to pay for the car. After my first visit where I learn exactly what car I want; the rates for the captive finance company (which are usually the best). I can do the math to figure out monthly payment for the price I what is at that point. Then I just negotiate using that number, if they bump up the trade allowance or reduce the price of the car it really doesn't matter. I precompute a few numbers to know where we are (e.g., Invoice, Invoice + 3%); but also know the cost of a $1 worth of financing so that I know how much they're charging me during a back and forth.
keeperofdakeys 12y ago
Page 10 contains a summary.
snorkel 12y ago
* Car salesman deliberately waste your time to wear you down. "I have to ask my manager. I'll be right back." is bullshit, they go in the break room and have a coffee. If you want a test drive, "OK let me go find the keys. I just need your drivers license." that's another 40 minutes wasted, and you can't leave because they have your driver's license. After spending 4 hours at a dealership you're tired, your resistance is low, but you've invested so much time in this process now, it's human nature to want your time investment to produce something, so you don't want to leave empty handed without a new car, so now they start talking about numbers you asked about 4 hours ago, and get you excited that you might drive the car off the lot tonight, you just need to sign and here are the keys ... "oh actually, the car is being cleaned now ... can I get you something to drink?" * Car salesman DoS attack the customer with numbers and options, for example using 4-square grid of options: overwhelm the customer with at least 4 different financing and trade in options, too many decisions to compare, lot of numbers, math, options, numbers, more options, overwhelm the customer, then steer them into the set of numbers that maximizes your commission. * That amazing deal of the week advertised in the paper? Sorry, we don't have it anymore, we just sold the last one (bullshit) but this one here is similar model for just a little more (bullshit) I read this article over 10 years ago, and it remains the gold standard of what you must read before stepping into a car dealership. Basically stand firm on what you will pay total and if they start playing these games then be prepared to walk away without the new car.
- Evolved 12y ago
  Maybe then the objective becomes to deliberately spend as much time there as possible and keep alive the idea that you're going to buy the car then the salesman will also not have wanted to waste his time and not have anything to show for it. Always be prepared to walk away knowing he spent 6 hours with you and won't get a deal while his buddies sold a couple cars a piece. Psychologal warfare.

Can someone summarize the secrets to me? I noticed the article was 11 pages long.

by jostmey 12y ago

Can someone summarize the secrets to me? I noticed the article was 11 pages long.

dyeje 12y ago

I'm not sure what secrets you're referring to, but it is a great piece that is well worth the read.

grecy 12y ago

The secret is basically that they're ripping you off, which pretending they're helping you, and under no circumstances should you buy a car on credit because they use that to obscure the real price. Also, even if it pisses them off, haggle and get prices from multiple dealerships, then play them off against each other. If they won't play, walk away to another dealer.

ScottBurson 12y ago
It is actually possible to buy a car on credit without getting ripped off. The way I did it was, having already gotten agreement on the selling price, and having a good estimate of the likely interest rate, I decided what loan term I wanted and computed the corresponding monthly payment based on these variables -- all before sitting down to do the final negotiation. I declined all dealer add-ons and all financing offers that didn't match my precomputed numbers. Eventually they made one that did. I'm not saying I got the best deal possible; I didn't shop dealerships. (OTOH I'm not sure that would have worked, as the model I was buying was in demand.) But basically, I think I did okay.
- ryanmarsh 12y ago
  This is exactly how I buy them. I used to sell them. Know exactly what you want. Pit three dealers against each other for the same car (exact product code) for a few days. Have funding secured already from a credit union but don't tell the dealer until you're in their finance office and they fail to provide better terms than your CU did
  - r00fus 12y ago
    That's how we got our Sienna. I got it down to 2 salesmen at different dealers (one a fleet sales), and was about to save a last $300 on one, but the competing dealer agreed to come to our house and deliver the car (which was huge at the time b/c we just had twins which was the reason we went minivan), so we went with him. Felt the pricing was much fairer this way. I'll probably go with TrueCar.com or something like that to automate the process next time, unless I get a Tesla.
  - xn 12y ago
    Going back and forth between a few dealers on the exact car I wanted to buy worked for me. When I got the price down to where one of the dealers would rather pay me $200 than lower the price, I was done. I documented my experience at http://xn.pinkhamster.net/blog/misc/buying_an_audi_under_invoice.html http://xn.pinkhamster.net/blog/misc/buying_an_audi_under_inv...
- jandrese 12y ago
  I bought my last car on credit, but I did it through my bank and got an insanely low rate (1%). The salesman whined constantly about how my bank was terrible at their job and that we should just use the super convenient in-store financing instead. I still got ripped off, especially on the trade in--but my wife was rather pregnant and close to being put on bedrest at the time and we didn't want to have to deal with Craigslist or whatever for selling her old car.

ghaff 12y ago

I'd probably word grecy a bit differently. As much as possible, separate the purchase from the financing from the trade-in. Easier said than done for some to be sure, but get an idea of alternative payment options if you don't have the cash or existing line of credit. And know what you'd be willing to take for a trade given what think you think you could get for the vehicle on Craigslist or donating it. And, of course, have your max price for the vehicle in question given invoice price and other factors.

tmuir 12y ago
One thing to keep in mind, if your trade in has significant value, is that your trade in amount reduces the tax you pay on the new price. For example, if you buy a $25000 car, and have a trade in value of $10000, you only pay tax on $15000.
- ghaff 12y ago
  Good point. In my case, I basically only buy a new car when the old one is on its last legs so we're talking about $1K-$2K at most.
- jandrese 12y ago
  That also assumes the dealer doesn't rip you off on the trade in, which is pretty rare. Selling the car yourself for cash is pretty much always better, even if you aren't a slick salesman type.
- dragonwriter 12y ago
  This is not true in California; you pay tax on the whole price, even if part of it is paid via a trade in. http://www.boe.ca.gov/sutax/faqpurch.htm#9 http://www.boe.ca.gov/sutax/faqpurch.htm#9
cpwright 12y ago
I've had more luck negotiating with a monthly payment in mind. I know what my trade is worth, how much I can put down (easier if you can just answer zero), and what I what to pay for the car. After my first visit where I learn exactly what car I want; the rates for the captive finance company (which are usually the best). I can do the math to figure out monthly payment for the price I what is at that point. Then I just negotiate using that number, if they bump up the trade allowance or reduce the price of the car it really doesn't matter. I precompute a few numbers to know where we are (e.g., Invoice, Invoice + 3%); but also know the cost of a $1 worth of financing so that I know how much they're charging me during a back and forth.

keeperofdakeys 12y ago

Page 10 contains a summary.

snorkel 12y ago

* Car salesman deliberately waste your time to wear you down. "I have to ask my manager. I'll be right back." is bullshit, they go in the break room and have a coffee. If you want a test drive, "OK let me go find the keys. I just need your drivers license." that's another 40 minutes wasted, and you can't leave because they have your driver's license. After spending 4 hours at a dealership you're tired, your resistance is low, but you've invested so much time in this process now, it's human nature to want your time investment to produce something, so you don't want to leave empty handed without a new car, so now they start talking about numbers you asked about 4 hours ago, and get you excited that you might drive the car off the lot tonight, you just need to sign and here are the keys ... "oh actually, the car is being cleaned now ... can I get you something to drink?" * Car salesman DoS attack the customer with numbers and options, for example using 4-square grid of options: overwhelm the customer with at least 4 different financing and trade in options, too many decisions to compare, lot of numbers, math, options, numbers, more options, overwhelm the customer, then steer them into the set of numbers that maximizes your commission. * That amazing deal of the week advertised in the paper? Sorry, we don't have it anymore, we just sold the last one (bullshit) but this one here is similar model for just a little more (bullshit) I read this article over 10 years ago, and it remains the gold standard of what you must read before stepping into a car dealership. Basically stand firm on what you will pay total and if they start playing these games then be prepared to walk away without the new car.

Evolved 12y ago
Maybe then the objective becomes to deliberately spend as much time there as possible and keep alive the idea that you're going to buy the car then the salesman will also not have wanted to waste his time and not have anything to show for it. Always be prepared to walk away knowing he spent 6 hours with you and won't get a deal while his buddies sold a couple cars a piece. Psychologal warfare.