My experience on buying a new car

[manwiches]

Hi guys

I didn't want to hijack the other threads, so I thought I'd share my car buying experience. I've bought several cars over my life, but this was by far the most unique and relaxing time I've had buying one ever. I absolutely hate haggling, however this negotiation was incredibly easy despite my initial anxiety. On to the details.

My wife and I got in a huge car accident (not our fault) a month ago and needed to buy a new car. We decided that buying a crossover SUV was what was best for our family. So after test driving all the crossovers in the class we were looking at, and I mean every single one, we decided on getting the Mazda CX5.

Doing some research, I found that there was a site, www.carcostcanada.com. For a fee of 40 bucks, you could get the wholesale price of any vehicle in Canada, less tax (up to 10 searches). Not only that, it also provides you with any incentives the factory is offering at the time, so they aren't thrown in at the last minute by a dealer to make it seem like you are getting a better deal. Basically, I had the dealer invoice to the car before even going in to negotiate for the car itself.

I discussed with a few friends who are car salesmen and who also work in the industry, and they told me that a dealer would typically consider anything at cost + 3% to be a fair deal. The wholesale price on the car was 33326 (+ tax), the MSRP was 36140 (+ tax). Armed with this information, I crunched some numbers and came up with a value of 35000 all in as a starting point. There was also a 500 dollar factory rebate, in this as well. Essentially, I offered cost+tax, knowing that the dealer had a 500 dollar kickback anyways from the incentive. Dealers also get holdback amount from the manufacturer, which accounts for +/-2% (again, my friend is a sales manager also), to subsidize for the advertising and interest costs (about $700 for my car). My high point on price was 36000 all in.

Upon sitting down with the sales manager, he came in at a price of 39500 all in, which I replied with my 35000 initial offer. He scoffed and told me that I was looking at the wrong car. I proceeded to tell him I had discussed with dealer and industry friends, and that what I offered was a fair deal. I told him I had a car cost report and showed him, and he said that there's no way he could do that price, so I asked him to see his dealer invoice. His attitude changed almost instantaneously. He started working with my numbers off my sheet, which gave me the impression that the car cost report was in fact correct. He came back at 36500 (3000 different from his initial), to which I replied I would go 35500, and he said he would be making no money on it. Going back to the holdback and 500 incentive from previous, I brought that up and said that he would still be getting at least 1200 back, in addition to any percentage above cost we were dealing with (500 more in this case). After a bit more number crunching, he came back with 36000 all in, and held firm.

Since we were within 500, I stated that we were obviously within a range to get a deal done, so I asked him to kick in accessories or perks. I ended up getting 3M for the full car (fenders, hood, bumper, side mirror, dog legs) for 250, plus all weather floor mats. I have a cousin who works in autobody, and he said he wouldn't be able to do 3M for less than 650-700, so plus the cost of the floor mats, we made up that 500 pretty quick.

We ended up settling at 36000 all in plus the 3M and free floor mats, which is exactly where I wanted to be on my high point.

Anyhow, after hammering out a deal, we ended up at the finance managers desk, which they try to sell you on protection packages etc. I declined all. I have been told by many people in the autobody industry that protection packages are useless for the most part. With the exception of maybe undercoating (which can be done by a 3rd party for a fraction of the cost), everything else is redundant. Leather protection is a bottle you can buy for 25 bucks, the car is already clear coated from factory, and it's also rust protected from factory. Unfortunately living in Calgary, salts and debris will degrade any car faster than other parts of the world. Not to mention that these lifetime protection packages they offer do not cover things such as rust from a rock chip.

All in all, my experience with buying a car was actually quite pleasant. I went in with a ton of anxiety about being guilted etc (I'm a pretty easily swayed). After showing the car cost report, the attitude seemed to change right away from them thinking they could turn a huge profit from me, to one of getting at least their minimum profit from me. I must stress though, throughout the whole process, despite the how the dialogue above comes across, I was extremely polite and courteous, just firm in what I wanted. I never once had to employ the 'walk away', and neither I or the dealer employed any hard negotiating tactics since I came in as an educated buyer.

Sorry for the long write up. Just thought I'd share my experience.

[Deegee]

I think carsaver.ca allows you to get same pricing for free.

[GrrlGoalie33]

I'm looking to buy in the next year, so this was a great write-up. Thanks for providing your experience!

Do either carsaver or carcostcanada provide pricing on used trucks?

[manwiches]

@Deegee - Hmm. I didn't know that. Oh well. I saved thousands either way. So $40 bucks in the grand scheme of things was worth it. Thanks for the info though!

@Frankster - carcostcanada does not, just new models. I'm not sure if carsaver does though. And no worries! Glad to help out if I can... lord knows I searched the internet for hours every day trying to figure out how to do this properly, so only sharing the information I gathered.

[bomber317]

The Lemonaid guide has some tips on New car buying as well. Recommended read for any new car buyer (and used as well). No pricing in the book though, so carcostcanada is still an useful tool.

[The Goon]

This is really good, as my wife and I are in this position, looking at similar cars.

Did you go in with your wife or by yourself? Just wondering if the sales manager tried appealing to her while you were standing firm.

[manwiches]

Originally Posted by The Goon

This is really good, as my wife and I are in this position, looking at similar cars.

Did you go in with your wife or by yourself? Just wondering if the sales manager tried appealing to her while you were standing firm.

Originally Posted by manwiches

I went in with a ton of anxiety about being guilted etc (I'm a pretty easily swayed)

Here's my response. haha. All that being said, I went in with my wife every time, and it helped that she really could care less about a car. As long as it gets her from point A to B, so trying to appeal to her was utterly useless. She didn't even have to pretend to have a poker face. The sales manager did try to appeal to her though with all sorts of features, and she thought they were interesting, but definitely didn't show she was wowed by any stretch.

I think once I realized I had the upper hand with the carcost report, my anxiety went down ten fold, and I was able to negotiate rationally and respond to the sales manager without letting my emotions get in the way. My wife was actually pretty impressed that I held my ground, as usually I give in way too quickly. (insert joke here)

[bagofpucks]

I'll chime in as I went through the same thing a little over a year ago for a CX7. Sorry for the wall of text in advance, but I found this type of stuff very useful before I went on the search for our car.

- The dealership's had 0% financing, so they were more interested in talking about monthly price as opposed to final price. I like math, so I didn't find this too difficult, but I can certainly see how it can be tough for people who don't like going back and forth between each number.
- I went to three Mazda dealerships in Calgary. The first dealership wasn't interested in giving me the time of day, so I crossed them off of my list. The second dealership gave us the most awesome display of dealership "song and dance" I have ever seen. The sales guy asked what our top price was and then he went to the sales manager. This happened at least three times. By this time, my wife and I were laughing so hard at the whole process there was no way we were going to buy from them. The only good part was we had some free time that night, so we didn't feel bad wasting two hours of our time. The third dealership was recommended to us by a friend and I dealt directly with the Used Sales Manager, even though we were buying new. I told him exactly what I wanted (model, extras, etc.) and the price I was able to pay, which included explaining to him the break down of the rebates I knew were available. He said he could make it work, so I went to the dealership and signed the paperwork (this whole process was done over the phone). Even though this dealership is by far the furthest from our house, we will be taking our CX7 there for all service and we have been so happy with their service department we will also be taking our second car. Two friends of ours have also bought cars from there working directly with the Used Sales Manager.
- At the end of the day, the MSRP on our unit was about $42,000 and my deal included winter tires on stock Mazda alloy rims. We traded in a beater that was worth at most $2000 and we paid a bit under $37,000 all in. I feel like it was a pretty good deal, but I'm sure the dealer made a bit out of it as well. I should note, we did buy a previous years model, so I'm sure that helped my bargaining power a bit.
- My wife was with me a couple of times when I went to dealerships. The sales guys generally focused on the color of the car and other accessories such as leather interior and warranty when they talked to her. It was kind of funny because she didn't care one way or the other anyways.
- A common trick at all the dealerships was to get you picking out accessories like color or trim level on a vehicle before you even talked dollars. I'm assuming this is a way to make you feel like you are "own" the vehicle. When I put my deal in I said I don't care about the color, here are my top choices, but it is not a deal breaker.
- I found that as soon as I showed I was an informed buyer on the vehicle, the amount of salesmanship went down considerably. I think you can make this work in your favor if you know it going in.
- As someone else said in a previous thread, if you are willing to walk away from the vehicle you can gain some leverage with the salesperson.

[worth]

Also note, this strategy only works on certain manufacturers. If you try this at a BMW dealer, they will laugh at you. If you try this with and extremely popular model, they will tell you to take a hike because they know that someone will walk in the door in 5 minutes and buy it at list price.

It worked when I bought my Subaru, but I have heard it does not at Audi, BMW or Acura. This is a generalization of course, I guess it doesn't hurt to try, but just be aware.

[billybob123]

Calgary BMW played ball with me when I bought my wife's (heavily overpriced) car. Granted it was 2009,but with that carcostcanada report, I was golden. I thin it was cost - rebates + 3%.

[oilyfan]

Originally Posted by worth

Also note, this strategy only works on certain manufacturers. If you try this at a BMW dealer, they will laugh at you. If you try this with and extremely popular model, they will tell you to take a hike because they know that someone will walk in the door in 5 minutes and buy it at list price.

It worked when I bought my Subaru, but I have heard it does not at Audi, BMW or Acura. This is a generalization of course, I guess it doesn't hurt to try, but just be aware.

In my experience BMW has always played ball. I have bought two cars from them in the last 5 years, both times I used carcostcanada to get a good deal.

Same with Acura, for my wife's car

[worth]

OK well that's good to hear from you guys. Guess it's not all doom and gloom for some of the higher end and more popular cars.

[drPepper1]

^^sweet good to know! I'm actually going to head over to the BMW dealership on Saturday. Need a new whip

[Northendzone]

I tell the salesman I am also considering buying a train and I ask them to tell me what the vehicle they are trying to sell to me could do that a locomotive can't do

[Komskies]

Once I've decided on the make and model of new vehicle I want, what is a good starting point for price to propose to the dealership? Invoice + Freight/PDI + A/C tax + x% markup?

I know the vehicle I want now, but I'm nervous about getting ripped off on the price.

[manwiches]

Originally Posted by Komskies

Once I've decided on the make and model of new vehicle I want, what is a good starting point for price to propose to the dealership? Invoice + Freight/PDI + A/C tax + x% markup?

I know the vehicle I want now, but I'm nervous about getting ripped off on the price.

I offered cost +2%. It gave me wiggle room to settle at cost +3%

[red sky]

Originally Posted by bagofpucks

I'll chime in as I went through the same thing a little over a year ago for a CX7. Sorry for the wall of text in advance, but I found this type of stuff very useful before I went on the search for our car.

- The dealership's had 0% financing, so they were more interested in talking about monthly price as opposed to final price. I like math, so I didn't find this too difficult, but I can certainly see how it can be tough for people who don't like going back and forth between each number.
- I went to three Mazda dealerships in Calgary. The first dealership wasn't interested in giving me the time of day, so I crossed them off of my list. The second dealership gave us the most awesome display of dealership "song and dance" I have ever seen. The sales guy asked what our top price was and then he went to the sales manager. This happened at least three times. By this time, my wife and I were laughing so hard at the whole process there was no way we were going to buy from them. The only good part was we had some free time that night, so we didn't feel bad wasting two hours of our time. The third dealership was recommended to us by a friend and I dealt directly with the Used Sales Manager, even though we were buying new. I told him exactly what I wanted (model, extras, etc.) and the price I was able to pay, which included explaining to him the break down of the rebates I knew were available. He said he could make it work, so I went to the dealership and signed the paperwork (this whole process was done over the phone). Even though this dealership is by far the furthest from our house, we will be taking our CX7 there for all service and we have been so happy with their service department we will also be taking our second car. Two friends of ours have also bought cars from there working directly with the Used Sales Manager.
- At the end of the day, the MSRP on our unit was about $42,000 and my deal included winter tires on stock Mazda alloy rims. We traded in a beater that was worth at most $2000 and we paid a bit under $37,000 all in. I feel like it was a pretty good deal, but I'm sure the dealer made a bit out of it as well. I should note, we did buy a previous years model, so I'm sure that helped my bargaining power a bit.
- My wife was with me a couple of times when I went to dealerships. The sales guys generally focused on the color of the car and other accessories such as leather interior and warranty when they talked to her. It was kind of funny because she didn't care one way or the other anyways.
- A common trick at all the dealerships was to get you picking out accessories like color or trim level on a vehicle before you even talked dollars. I'm assuming this is a way to make you feel like you are "own" the vehicle. When I put my deal in I said I don't care about the color, here are my top choices, but it is not a deal breaker.
- I found that as soon as I showed I was an informed buyer on the vehicle, the amount of salesmanship went down considerably. I think you can make this work in your favor if you know it going in.
- As someone else said in a previous thread, if you are willing to walk away from the vehicle you can gain some leverage with the salesperson.

I feel like it is a good idea to see the view from someone who bought a used car privately as in 2011 my wife and I bought a 2010 Mazda CX7 GT model (excluding Nav) so it is a good comparison on the price difference.

I found the car on Kijiji and the person was located in Red Deer. Once we settled on a price, I arranged for a mechanic to do an inspection up there. She was coming down for Stampede so it worked perfectly where I took it for a test drive and did my own inspection and completed the transaction.

So it was fully loaded (excl. navigation). It had 18,000KM on it and was obviously still under warranty.

We paid $26,650 and have had absolutely no issues (aside from the thing guzzling gas, which is a common problem).

I see the benefits of buying new but I cannot justify the depreciation of a new vehicle after driving it off the lot.

[Komskies]

Originally Posted by manwiches

I offered cost +2%. It gave me wiggle room to settle at cost +3%

Thanks. So looking at the carsaver.ca report I did if the vehicle invoice price were $29,007 + $1640 freight + $100 A/C tax you would've made an initial offer of $31,361=1.02*(29007+1640+100)? Thanks in advance.

[cral12]

Originally Posted by Deegee

I think carsaver.ca allows you to get same pricing for free.

Carsaver.ca seems to be not functioning any longer??

[Maritime Q-Scout]

Great post.

I loathe the idea of haggling over price. To me the price is the price if you don't like it walk away. Alas that's not how car buying works.

That said, I'm always willing to walk away (I don't have a good bluff so if I'm willing to walk its because I am).

The only time I've gone in to a dealership to buy was when my wife and I went in just to test drive.

I hated it. Mostly because it was a spur of the moment weekend thing and I had no research done. Test driving a used civic not knowing what the new ones cost wasn't my thing.

We didn't buy, but it's nice to know where to look to get more information.