Car Price Negotiations

[Shoedog112]

I’m in the market for a new vehicle, pretty set on the Lexus NS350h. MSRP is around $55.0k if I’m not mistaken. It’s been awhile since I negotiated the price of a car. 
 

What is the best way to buy a vehicle in today’s market? Internet sales? Salesperson on the lot? And my big question is, what’s the best approach to negotiation?  What is a reasonable price request to shoot for? 5-10% off MSRP?  Any tips? 
 

I plan to pay cash for the vehicle. I may finance a small portion just to keep my credit score up. 

Edited February 14 by Shoedog112

[+ BenjaminNicholas]

You mean the Lexus NX350h.

First, use the industry Black Book (not Blue Book) to see what a dealer has paid for the car wholesale.  That's where you start negotiations.

Don't let a salesperson know too much, too quickly- They'll ask if you're leasing, financing or a cash buyer.  Don't set this in stone until you get a price you agree with. 

Never buy the first visit to the dealer.

Always be prepared to get up and walk out.

And if you walk out, make sure you leave with the salesperson's final price quote on the car (drive-out price) and that he has your phone number.

End of the month is always better to buy than early or mid.

Bottom line, you don't really negotiate.  You wait them out until they hit the (realistic) number you want.  If the model isn't a massive seller, you're more likely to win playing the long game if you can stand it.

Note:  Don't try this with a Porsche.  I learned that the hard way.

[+ FrankR]

11 minutes ago, Shoedog112 said:

I’m in the market for a new vehicle, pretty set on the Lexus NS350h. MSRP is around $55.0k if I’m not mistaken. It’s been awhile since I negotiated the price of a car. 
 

What is the best way to buy a vehicle in today’s market? Internet sales? Salesperson on the lot? And my big question is, what’s the best approach to negotiation?  What is a reasonable price request to shoot for? 5-10% off MSRP?  Any tips? 
 

I plan to pay cash for the vehicle. I may finance a small portion just to keep my credit score up. 

Good advice from @BenjaminNicholas

You may be disappointed by the dealer’s unwillingness to negotiate. Buying a pickup? Sure they will negotiate. Buying an SUV or hybrid? Not so much. 
 

You can try to visit multiple dealerships mid month and express interest, leave your number and perhaps the salesman will call you end of month with a (tiny) offer so they can make their sales quota. 
 

You can also wait until May when the next year’s model is announced and pick up the current year model for a small discount. 
 

Dont tell them you are paying cash - they make more money on financing, so express interest in that. 

[+ azdr0710]

when you get to an agreed-upon price, check whether there is also a non-negotiable additional fee on the contract (hard printed!) for dealer prep, etc.......I hard-bargained for my last car and was surprised to see this extra fee (was only about $500) pre-printed on the contract......also, be ready for the sales tax charge......and extended warranty pressure......

there is also a thing called "dealer holdback" in which the manufacturer pays the dealer for every car sold, no matter the actual customer sale price....it's usually 1-3% of the MSRP, so don't feel too "bad" if you bargain hard and get a deal!!.....they won't sell the car if they don't want to!......

I don't know if every dealer is this way, but the little salesman you deal with at first when you show up will get a minimum commission no matter the sale price......he'll get more, however, if the sale price is higher......and be ready for that classic scene where the salesman leaves you, goes back to talk with his sales manager about your offer, and comes back with a counter.....all very dramatic!.......

 

 

[Shoedog112]

1 hour ago, BenjaminNicholas said:

You mean the Lexus NX350h.

First, use the industry Black Book (not Blue Book) to see what a dealer has paid for the car wholesale.  That's where you start negotiations.

Don't let a salesperson know too much, too quickly- They'll ask if you're leasing, financing or a cash buyer.  Don't set this in stone until you get a price you agree with. 

Never buy the first visit to the dealer.

Always be prepared to get up and walk out.

And if you walk out, make sure you leave with the salesperson's final price quote on the car (drive-out price) and that he has your phone number.

End of the month is always better to buy than early or mid.

Bottom line, you don't really negotiate.  You wait them out until they hit the (realistic) number you want.  If the model isn't a massive seller, you're more likely to win playing the long game if you can stand it.

Note:  Don't try this with a Porsche.  I learned that the hard way.

Yes. NX350h.  I bought the IS250 when they first came out and there wasn’t too much wiggle room since the demand was so high for the new model. I don’t remember how I ended up landing the deal, but appreciate your suggestions. 

[Shoedog112]

1 hour ago, FrankR said:

Good advice from @BenjaminNicholas

You may be disappointed by the dealer’s unwillingness to negotiate. Buying a pickup? Sure they will negotiate. Buying an SUV or hybrid? Not so much. 
 

You can try to visit multiple dealerships mid month and express interest, leave your number and perhaps the salesman will call you end of month with a (tiny) offer so they can make their sales quota. 
 

You can also wait until May when the next year’s model is announced and pick up the current year model for a small discount. 
 

Dont tell them you are paying cash - they make more money on financing, so express interest in that. 

If I express interest in financing, are they more flexible with the cost of the vehicle? Is the industry black book online?

Edited February 14 by Shoedog112

[BuffaloKyle]

I bought a brand new car and they wouldn't budge on price at all. I did get them to buy my old car for $500 more though than they first stated. I told them after the first price offer that I'd rather just sell it on my own.

[Shoedog112]

1 minute ago, BuffaloKyle said:

I bought a brand new car and they wouldn't budge on price at all. I did get them to buy my old car for $500 more though than they first stated. I told them after the first price offer that I'd rather just sell it on my own.

That’s a good idea to get more from my own vehicle. I honestly don’t care how much I get, I just don’t want to deal with selling it myself. Or I may give it to my young nephew

[NJF]

3 minutes ago, BuffaloKyle said:

I bought a brand new car and they wouldn't budge on price at all. I did get them to buy my old car for $500 more though than they first stated. I told them after the first price offer that I'd rather just sell it on my own.

I negotiated a higher trade-in value too.

[BuffaloKyle]

1 minute ago, Shoedog112 said:

That’s a good idea to get more from my own vehicle. I honestly don’t care how much I get, I just don’t want to deal with selling it myself. Or I may give it to my young nephew

Plus it added up to more than that because he took it off the pretax price of the car so it brought the taxes down a bit more then. I also put the max I could for the down payment on my credit card which was $4,000 I believe for the cash back.

[Shoedog112]

11 minutes ago, BuffaloKyle said:

Plus it added up to more than that because he took it off the pretax price of the car so it brought the taxes down a bit more then. I also put the max I could for the down payment on my credit card which was $4,000 I believe for the cash back.

What car did you get where they wouldn’t budge on price?

[BuffaloKyle]

53 minutes ago, Shoedog112 said:

What car did you get where they wouldn’t budge on price?

Honda Civic

[Guest]

I hate buying cars. I decided long ago that I didn’t have to get the very best price, I just had to feel good about the purchase. So, I established a relationship with a local dealer and have purchased every car I’ve owned from them (about 15 over the years). Now, I just call and tell them what I want and pick it up. I’m greeted every time by the business manager with balloons and confetti. 

[+ Pensant]

I love to negotiate with car dealers and occasionally help friends with purchases, which grates on the salesperson. I always ask about financing or leasing, since the dealer makes more that way. When I get the price I want, I then pay cash, unless they offer 0% financing, which I got for my Subaru Outback Limited XT in 2021. I also make it clear that if they attempt to waste my time with GAP or extended warranties that I will walk out. The salesperson isn’t my friend; he’s my sparring partner. As others have said, they won’t sell the car at a loss, so the back and forth is simply kabuki theater.

I also make them remove any dealer decal or license plate frame, unless they want to pay me a monthly advertising fee.

[curt gregory]

@Shoedog112 Before talking to the dealer about the value of your trade-in, take the car to a CarMax and have them tell you what they would buy it for.  (It takes less than an hour, and you can make an appointment ahead of time.). That price will be good for 7 days.  Then, when you go to the dealer to finalize the purchase, you will know what you can get for your car and counter their trade-in offer.  Like you, I have never wanted to sell my old car myself, but I hate to leave money on the table and found this to work well for me in the past.

[ICTJOCK]

Very interesting thread and topic!    I love car negotiations.    I actually just joined a new gym,   the first time in my adult life I changed gyms and it was what I call a "car negotiation.    I trade cars frequently and especially with the value of trade ins  recently,  I love to see what I can get.      A few things I'd recommend:

1.Know your facts about the car you want and if you are trading,   what you will take for the trade.

2. Don't limit yourself to local dealers.   While I live in Kansas,  my latest Camaro came from St. Joseph,  MO  and my Jeep Gladiator came from Tulsa,  OK.    I've purchased care i Missouri,  Oklahoma,  Arkansas and other states.   Some dealerships don't want to "play games"  as they put it and won't negotiate on your terms or level.   Screw them and cross them off the list and move forward.    You will always find someone who will negotiate with you.     They might be willing to come down from the MSRP,  but they will screw you with the trade in allowance.   You must balance everything,   taxes paid,  trade in cost basis,   what they will give you to drive to them.     I usually get $300-$500  for travel.    I also like to look if I'm in other cities,  seeing escort clients.   

If you are dedicated and serious,  it works well.    Don't take your eye off the ball and always be ready to head for the door if they aren't being fair or above board.    That happened in Little Rock,  Arkansas.    More often than not,   you will hear,    "Wait a minute".....

[dbar123]

Never tell them you’re paying in cash. They will negotiate a better price if they think they will get you to use their financing  since they get a kickback on the loan. Just make sure the loan has no prepayment penalty.

Once you buy the car and you’re happy with it, use your cash to pay off the balance 

The loan also serves as leverage if the car turns out to be a lemon from the start.

[Shoedog112]

14 hours ago, dbar123 said:

 

The loan also serves as leverage if the car turns out to be a lemon from the start.

Can you share how this would help if the car was a lemon? 

[dbar123]

11 hours ago, Shoedog112 said:

Can you share how this would help if the car was a lemon? 

Don’t pay the loan…

[+ azdr0710]

7 hours ago, dbar123 said:

Don’t pay the loan…

there are "lemon laws", but I wouldn't just stop making loan payments!.......I'm sure you mean do it in conjunction with discussing/negotiating with the dealer/loan company and, possibly, a lawyer.......uhhh, right??!!

[dbar123]

3 hours ago, azdr0710 said:

there are "lemon laws", but I wouldn't just stop making loan payments!.......I'm sure you mean do it in conjunction with discussing/negotiating with the dealer/loan company and, possibly, a lawyer.......uhhh, right??!!

Yup

[+ augustus]

Be careful of "add ons" like rust proofing or wheel and tire warranties in case you go over a pothole or hit the curb (for the $700 they charge it's cheaper just to buy your own new tire).   Just assume they will try to rip you off (because they will).

[+ BenjaminNicholas]

4 hours ago, augustus said:

Be careful of "add ons" like rust proofing or wheel and tire warranties in case you go over a pothole or hit the curb (for the $700 they charge it's cheaper just to buy your own new tire). 

Actually, tire & wheel insurance can be one of the best add-ons that pays for itself in one claim.

If you live in a city with shitty streets and buy a car with low-profile tires (or larger tires), this is well worth it.  

My vehicle has $400 per tire with the wheels being $1800 a rim. 

I hit a pothole in Dallas, it took out two tires and fully cracked a rim.  The policy I have has zero deductible and I walked out of the dealership with all new hardware, nothing out of pocket.  That one situation more than paid for the insurance I took at inception.

Bottom line, do the math on the car you're buying and figure out if it's right for you.  It just might be.

[Rudynate]

15 hours ago, azdr0710 said:

there are "lemon laws", but I wouldn't just stop making loan payments!.......I'm sure you mean do it in conjunction with discussing/negotiating with the dealer/loan company and, possibly, a lawyer.......uhhh, right??!!

I have a colleague who practices lemon law in SoCal.

[MikePDNA51]

If buying Toyota in Los Angeles go to Longo Toyota in El Monte.  I hate buying cars.  Different dealerships will keep track of you visiting different sites for the sam vehicle.  Last car Toyota Prius lasted 12 years until hit at intersection.