MSRP - What do you pay?

[jrdavid68]

The wife and I are considering a Touareg as a tow vehicle and as her everyday driver.

Does anybody out there have a rule of thumb for making offers when it comes to vehicles? I have a friend that says he will take the MSRP and reduce by 20% and start the bargaining there. The other advice is to try to buy at the end of the month when the sales team is trying to get the best numbers for the month.

I know it can also make a big difference on how well a particular model is selling. I think the Touareg is doing well, but I wouldn't say they are flying off the lots.

What do y'all think?

[BlueSkyJaunte]

You can find out the dealer's invoice price pretty easily. Don't pay more than $500 over that. "Fleet departments" usually have fixed pricing at some amount over invoice; I always deal with them instead of the shysters...I mean sales staff.

[91C2wrencher]

After you've made their "best deal", show'em your backside and walk out. The phone will ring in a day or two with a better offer. Never worry about your image to the sales guy(no matter what he's seen worse) and they really don't care about you only your $. This a good tactic for the end of the month/quarter, go shopping on the 25 th, close on the 30th.

[RickC]

Try Edmunds.com for a True Market Value Report or pay Consumer Reports (not the industry supported Consumer Digest, etc.) about $5 for a list of all the true costs.

Both estimate what you should pay, and take into account how well a vehicle is selling. They'll also detail any sales discounts.

And don't just be a tough cookie with one sales person - please shop around if you know what car you want.

In 1995 I went to 6 or 7 of the Honda dealers in Chicago to deal on an Odyssey for my wife (my first new car dealings ever). Got lie after lie from most of them - I mean real bald-faced lies that you only had to read the sticker to disprove - that an LX was an EX, that they all had VTECH cams (none did then), that it was 6 cylinders (none), that a pop up aftermarket sunroof was factory installed. Incredible.

Anyway, some wanted sticker, some wanted over sticker. And one (the one I bought from) put a price down in writing that was lower than the original target price Consumer Reports said to look for. I bargained them down a little from there and the deal was done. Pretend you don't care and you're bartering in Baja and you'll be OK. And if you can, wait until Christmas time when things are slow and everybody else is broke.

[tabs]

Nothing is selling right now, people come in get a price that is break even and walk....that comes from a friend whose Poker buddy is a car saleman.. and is hurting big time. He works for the Chevy dealership in Claremont CA.

That aside...try Tuesday or Wednesday mid mornining, end of the month rainy days....Car Dealership owners ask how many units have we sold not how much money have we made. On used cars the bottom line is if you can get a car for under low Blue Book...$600 to $800 is the target. I don't care how much you weasle and dodge these guys they're going to make a profit...if U beat the bushes enough after a while you come up with a price that is within a few hundred $ of each other. Then you have to decide who you liked the best.

The best learning experience is to go to a Wholesale Dealers Auction for used cars. You can generally find a Dealer who will buy you a car for a couple of hundred $. You'll find out the car business is just like the cattle business...theres nothing special about them.

[jrdavid68]

Thanks for the replies - good info!

Edmunds.com shows that Touaregs appear to be selling for MSRP!

Also, how do you guys handle a trade? We have an '02 Passat that would be traded on this deal. Kelly shows Trade-in at $20,850 and Retail at $26,500 - what would be the highest I could expect to get?

Thanks again,

[nostatic]

expect to be reamed. It all depends on how bad they want to sell the car. They may be going to sticker if supplies are constrained, but if that were the case, I'd wait a few months until they start piling up...because they will.

The trade and the selling price are two different negotiations. Negotiate the selling price first...*then* do the trade. I usually have a number in mind that I'm willing to pay ($500 over invoice is a good start, but it varies depending on if there are dealer incentives which would send it lower, or if it is a hot car and you've got to have it, which would send it higher).

I'm not a traditionalist though. I sit down and say "this is what I'm willing to pay". Then they counter, and I get up to leave. They come running after me. I give them the same number I started with. They counter again. I get up to leave. Some dealers never get it, and I've just left, with them running after me...but when I say this is what I'm going to pay, then that's what I'm going to pay. There's always another dealer.

Then AFTER you get a selling price, you negotiate the trade in value. The nada guides give you some guidelines. Again, if you dont' like their number, leave the table. In this market YOU are in control, unless you want a hot vehicle. And even then, there likely is a dealer that wants to move iron rather than piss and moan over margins.

[tabs]

Try 1k to 2K under low Blue Book for your trade.

[Eric Coffey]

If you want to save some real money (and have a little patience), wait a couple months and find nice used one with <5K miles (basically brand new). There are always going to be people out there that over-extend themselves, only to finally realize it AFTER the savvy salesperson talked them into it. From Ford to Ferrari, new car purchases are one of the worst investments out there!

[cowtown]

Touarag - you can see a list of some US dealers stating what they have and whether they are selling at or under MSRP this week at www.vwvortex.com. They can also look up the specific things you want and tell you if there are any cars in the entire US that meet your specs.

It's one of the sticky posts in the Forums section.

[Zeke]

Markup is 10-12% on new cars. The dealer also sees rebates and hold backs to increase profits. Watch the financing. They can make more money by upping your finance rate half a percent than if you beat them down another $500. The cash price of the car is only part of the equation. The bottom line on the sales contract says it all. That's what you want to compare from dealer to dealer, but you can't. You can't get a sales contract until you buy a car. They know this and this is where they still hold the advantage. After you negotiate the sales price, negotiate the interest. I just did this on a truck. I got the interest down a half a percent from their 'best offer' which made the payment $25 less. That's $1500 saved on the contract. Think how much reserve they make on someone who pays market rates. When they sell the loan wholesale, they keep the difference. On most deals, this amounts to hundreds and hundreds of dollars. These people aren't stupid. The programs are set up by the largest and wealthiest corporations in the world. You are doing nothing to anyone by buying a car at invoice. That's all they expect along with all they can steel from you in the rest of the deal.

BTW, I have an automobile salesperson's license.

[LeeH]

If you're paying cash try this. Have a check made out in the amount you are willing to pay. Whether you're dealing with the sales weasle or the fleet guy just walk in and hand it to them.

Tell them, "Here's what I'm willing to pay. Either bring me back a purchase order signed by a manager or this check in little pieces so I can be on my way." I've found it cuts a lot of time off of the negotiation process.

[DonDavis]

I like your idea Lee. That would be fun. And there's no gray area.