Any Car Salesman or Savvy Car Shoppers?

[NVGator]

I've mentioned in a previous thread my 2004 4-Runner is ready to be retired. I've ridden it out this far and figure with the holiday and end of year, now is the time to trade in. Am I thinking correctly?

What advise would you give this novice car buyer? I'm good at negotiation but haven't bought a car since 2004. Where do the dealers make their money? Is it on the down payment? Should I finance with the dealer or my own bank (I should probably have 2 options)?

Any and all input is welcome.

 

[Swamp Donkey]

Sell the 2004 yourself for as close to retail as possible. 4 runners in decent shape sell themselves. How many miles?

They make their money on add-on shyt, bullshyt warranties, paint protectants etc.

There are numerous sources for the price the dealer paid for the car. There are some other specials the dealers get, ie $x bonus per ever 10/100 whatever vehicles being sold per month. The end of the month is THE time to buy a car. They are desperate to make monthly numbers usually.

Finance w your own bank unless another option is clearly better IMO. Sometimes the manufacturers financing is worth it. Usually the side deals they make w banks benefit them more than you. They always get a slice of this.

Of course, used car sales are trying to make numbers at the end of the month too and a lightly used car makes much more sense. The NEVER have even wholesale in there used cars and I have always been able to buy the car for about $500 over wholesale.

 

[NVGator]

Sell it yourself for as close to retail as possible.

They make their money on add-on shyt.

Finance w your own bank unless another option is clearly better IMO. Sometimes the manufacturers financing ia worth it. Usually the other isnt.

My vehicle is worth $2k on trade-in and maybe $2.5k for FSBO. Not worth the hassle.

I’m not looking at new, but a year or 3 used.

When you say add-on, you talking Warranty?

 

[MJMGator]

I hear used BMWs are the way to go.

 

[Swamp Donkey]

My vehicle is worth $2k on trade-in and maybe $2.5k for FSBO. Not worth the hassle.

I’m not looking at new, but a year or 3 used.

When you say add-on, you talking Warranty?

Add on anything. Car alarm, "paint protector", extended warranty, anything the dealer added that isnt on the factory spec sheet. It is all shyt.

 

[URGatorBait]

If you think your car is worth 2k on trade in, then in reality they will probably try to get it at 1,000 or less.

Always better to sell privately, as you will almost always get closer to the price it is worth.

If you do trade it in...don't offer as a trade in up front. Negotiate the cost of the new vehicle first then throw it in as a trade after numbers are more to your liking on the new vehicle.

Don't be afraid to throw their sales lines right back at them.
When wife and I were negotiating once, the car was about $19 a month over what we wanted to pay when he came back. He said "it's just $19 a month, that's not much"....My wife jumped and said "if it's not much, then you pay it". He shut up and walked away

If you have AAA look into their auto loan rates With good credit, they many times have the best rates, I have found. We got a car at 2.09% once...rates aren't that low now though.
I really dont care who the bank is, as long as I get the % I want.

Also, do your research. Know what you want, knowbthe price point you want to be at and the monthly payment you're comfortable with. And never be afraid to walk away.

 

[Gatorbreath]

I've mentioned in a previous thread my 2004 4-Runner is ready to be retired. I've ridden it out this far and figure with the holiday and end of year, now is the time to trade in. Am I thinking correctly?

What advise would you give this novice car buyer? I'm good at negotiation but haven't bought a car since 2004. Where do the dealers make their money? Is it on the down payment? Should I finance with the dealer or my own bank (I should probably have 2 options)?

Any and all input is welcome.

OK - I'm not proud of it, but I do have some car sales experience in my background, both times as interim stops as my "real" job search dragged on. The first was at a multi-point shop in Tampa and the second was at a BMW point in Atlanta. I hate to admit this, but literally everyone who wants to make a career in sales should be required to spend a year moving metal. These were incredible learning and character building experiences. I had a lot of success and learned a lot (not the least of which was to hate myself after some grotesque, "4-pounder" deals that preyed on people that didn't know better). The monthly award plaques are still in a box somewhere, but, I digress.... Both stints were a long time ago, and likely things have changed somewhat.

Understand that literally everything about a car dealership is set up to extract as much money from you as possible. Everything. Every little thing they can add to a bump sticker - dealer prep, PDI fees, door edge guards, wheel mouldings, window etching... and finance. They will do nothing that doesn't make them money.

What others have said about your trade is true. You'll likely get more for your 4Runner if you sell it yourself. The flipside is, you have to run an ad, keep her detailed, meet all sorts of potentially weird people, do test drives, etc. It is a hassle and like you said, might not be worth the headache for a few extra dollars. Your decision....

Preparation is key! Before you go shopping, determine how you plan to acquire the car - lease or purchase. Given the vintage of your 4Runner, I will assume you will purchase. Next step - and this is critical: Go to your bank/credit union and get your finance arranged. Have that in your back pocket. Given year-end deals, it is possible you might be able to get better rates/terms from the dealer. But NEVER rely on them. That F&I "manager" is likely to be the best and trickiest closer you meet.

If you buy new, you won't benefit from depreciation, but you will be able to take the VIN of the vehicle and surf the web to find out what the best deals are to ensure you're leaving as little on the table as possible. Give or take volume discounts and factors between the dealer and manufacturer you likely can never know, data on new cars should be pretty uniform. At this time of year there will likely be incentives both from the dealer and the manufacturer on new units.

If you buy a used car, yes, someone else will have taken the hit on depreciation, but you can never really know what the seller has into the vehicle (meaning how much did they pay to get the car on their lot either in trade or at an auction). Plus, there is some small risk with regard to how the original owner drove and cared for the car you avoid when buying new. Research will be more geographic. The good news is, there are a lot of web tools out there to tell you how much a given model sells for in your area to make sure you're not getting ripped off.

Most car dealerships employ the "third party selling" model. That means that the sales guy is little more than a go-between between you and his manager. So, you have to sort of fire up the sales guy to make things happen on your behalf. Bring your checkbook and:

1. Do your research BEFORE you ever talk to a sales rep. Know what you want, what a good deal is and how much you're willing to pay/spend before you venture out.
2. A good rep will engage you in conversation, but all the while he should be asking questions to qualify you and set you up to close. A good rep will go with you on the test drive and continue to profile you.
3. Be firm, make eye contact, sit up straight but don't be overly d!ckish. Be in charge, but don't be an a-hole.
4. Avoid wanting the damned car too much
5. Be perfectly willing to walk away
6. When you make an offer, include a check with $500 or $1000 so Skippy has something to take back to his manager ("See, he's serious! He gave me a check!")
7. Be open to listening to their finance offers. If you can do better with them than your bank, AND they get to make a little F&I money on you, then everyone wins (well, except your bank, I suppose) and the dealer might be a little more flexible on the selling price because he's making F&I money on you
8. If you do walk out, the odds are good that they'll "put you out on a rocket". That means the last figure they leave you with, sometimes literally walking alongside you as you walk to your car, is something neither they nor the competition can do. They'll put it as a condition, like, "If I could sell you the car at $30K, could I earn your business now?" - or something like that (see the weasel words in that statement?). At this point, regardless of what they offer, most people are still going to walk - but they will walk with that undoable "rocket figure" etched in mind. So you'll go to other dealers with that figure no one else can do..... then you'll come back to them and the game begins all over again. So.... if you walk and they put a rocket figure out there - GET IT IN WRITING. And if they don't put it in writing, you'll know it is BS.

Keep a couple of things in mind and you'll be fine. First, dealerships live to take as much money from you as they possibly can. Period. Secondly, you're in charge and if you do your research, arrange your own finance and don't get emotional, you'll level the playing field. And lastly, it's just a friggin car. In the grand scheme of things, it's not that big a deal. Keep your perspective. Do your best, find what you like that fits your budget, buy it then move on.

 

[NVGator]

OK - I'm not proud of it, but I do have some car sales experience in my background, both times as interim stops as my "real" job search dragged on. The first was at a multi-point shop in Tampa and the second was at a BMW point in Atlanta. I hate to admit this, but literally everyone who wants to make a career in sales should be required to spend a year moving metal. These were incredible learning and character building experiences. I had a lot of success and learned a lot (not the least of which was to hate myself after some grotesque, "4-pounder" deals that preyed on people that didn't know better). The monthly award plaques are still in a box somewhere, but, I digress.... Both stints were a long time ago, and likely things have changed somewhat.

Understand that literally everything about a car dealership is set up to extract as much money from you as possible. Everything. Every little thing they can add to a bump sticker - dealer prep, PDI fees, door edge guards, wheel mouldings, window etching... and finance. They will do nothing that doesn't make them money.

What others have said about your trade is true. You'll likely get more for your 4Runner if you sell it yourself. The flipside is, you have to run an ad, keep her detailed, meet all sorts of potentially weird people, do test drives, etc. It is a hassle and like you said, might not be worth the headache for a few extra dollars. Your decision....

Preparation is key! Before you go shopping, determine how you plan to acquire the car - lease or purchase. Given the vintage of your 4Runner, I will assume you will purchase. Next step - and this is critical: Go to your bank/credit union and get your finance arranged. Have that in your back pocket. Given year-end deals, it is possible you might be able to get better rates/terms from the dealer. But NEVER rely on them. That F&I "manager" is likely to be the best and trickiest closer you meet.

If you buy new, you won't benefit from depreciation, but you will be able to take the VIN of the vehicle and surf the web to find out what the best deals are to ensure you're leaving as little on the table as possible. Give or take volume discounts and factors between the dealer and manufacturer you likely can never know, data on new cars should be pretty uniform. At this time of year there will likely be incentives both from the dealer and the manufacturer on new units.

If you buy a used car, yes, someone else will have taken the hit on depreciation, but you can never really know what the seller has into the vehicle (meaning how much did they pay to get the car on their lot either in trade or at an auction). Plus, there is some small risk with regard to how the original owner drove and cared for the car you avoid when buying new. Research will be more geographic. The good news is, there are a lot of web tools out there to tell you how much a given model sells for in your area to make sure you're not getting ripped off.

Most car dealerships employ the "third party selling" model. That means that the sales guy is little more than a go-between between you and his manager. So, you have to sort of fire up the sales guy to make things happen on your behalf. Bring your checkbook and:

1. Do your research BEFORE you ever talk to a sales rep. Know what you want, what a good deal is and how much you're willing to pay/spend before you venture out.
2. A good rep will engage you in conversation, but all the while he should be asking questions to qualify you and set you up to close. A good rep will go with you on the test drive and continue to profile you.
3. Be firm, make eye contact, sit up straight but don't be overly d!ckish. Be in charge, but don't be an a-hole.
4. Avoid wanting the damned car too much
5. Be perfectly willing to walk away
6. When you make an offer, include a check with $500 or $1000 so Skippy has something to take back to his manager ("See, he's serious! He gave me a check!")
7. Be open to listening to their finance offers. If you can do better with them than your bank, AND they get to make a little F&I money on you, then everyone wins (well, except your bank, I suppose) and the dealer might be a little more flexible on the selling price because he's making F&I money on you
8. If you do walk out, the odds are good that they'll "put you out on a rocket". That means the last figure they leave you with, sometimes literally walking alongside you as you walk to your car, is something neither they nor the competition can do. They'll put it as a condition, like, "If I could sell you the car at $30K, could I earn your business now?" - or something like that (see the weasel words in that statement?). At this point, regardless of what they offer, most people are still going to walk - but they will walk with that undoable "rocket figure" etched in mind. So you'll go to other dealers with that figure no one else can do..... then you'll come back to them and the game begins all over again. So.... if you walk and they put a rocket figure out there - GET IT IN WRITING. And if they don't put it in writing, you'll know it is BS.

Keep a couple of things in mind and you'll be fine. First, dealerships live to take as much money from you as they possibly can. Period. Secondly, you're in charge and if you do your research, arrange your own finance and don't get emotional, you'll level the playing field. And lastly, it's just a friggin car. In the grand scheme of things, it's not that big a deal. Keep your perspective. Do your best, find what you like that fits your budget, buy it then move on.

This is absolutely fantastic information and very much appreciated. I'm trying to bank on the last minute deals of the year. I'm also in a corner that my current vehicle is close to death. Do I hold my cards close with offering cash down? How much room is typically there with negotiating down the price? 5%, 10%, 2%?

 

[Swamp Donkey]

This is absolutely fantastic information and very much appreciated. I'm trying to bank on the last minute deals of the year. I'm also in a corner that my current vehicle is close to death. Do I hold my cards close with offering cash down? How much room is typically there with negotiating down the price? 5%, 10%, 2%?

You can get the car for $500-750 over wholesale, new or used. I go lowwr on used bc they never even have wholesale in the used car. Used cars are usually at least $5000 deals if you pay sticker.

 

[jeeping8r]

Never EVER buy a car based on the monthly payment. In the excitement you may not realize the time on the note is 12 or 24 months longer than you thought. Buying a car used to be based on a 48 month note, Now 84 isn't unheard of.

 

[URGatorBait]

Never EVER buy a car based on the monthly payment. In the excitement you may not realize the time on the note is 12 or 24 months longer than you thought. Buying a car used to be based on a 48 month note, Now 84 isn't unheard of.

This is true. Lots of variables.
Though while no one should purchase based on monthly payment alone, one should know what monthly payment they are comfortable with, so as to not overextend yourself.
Just don't let them swindle you into stretching the loan into a mortgage

 

[Concrete Helmet]

Any and all input is welcome.

Ask them to at least spit on it before sticking it in your a$$

 

[URGatorBait]

@NVGator one more bit of advice, don't shop where Crete does. He shops with his wife's money so he's used to taking it up the ass.

 

[Concrete Helmet]

Alright here's my 3 cents coming from someone who sold boats for about 8-9 years.
Ask yourself How long do I plan on keeping the vehicle? What will it's current usage be? Will it be the same in 2 to 3 years? Will my needs change?

Don't limit yourself to just buying used, particularly if you're pretty certain you're going to keep the vehicle for 4 or 5 years or more.... rates are higher on used and if you're shopping Toyota again their resale is a double edged sword....When buying my last 2 Tundra's I was dead set on buying a 2 or 3 year old pre owned. Well if you look at the price of a 2 year old, low mileage Limited Tundra compared with a "end of the year" discounted one it just didn't make sense to buy used.

Keep in mind also the original powertrain and bumper to bumper on new vs "certified" or some other "aftermarket warranty"....these type of warranties typically have more holes in them than Chin's in a Chinese phonebook.... no matter what the salesman or finance manager lie and tell you to sell you the used unit....

As far as pricing goes on new, things have changed over the last 10 years because of the internet(about 70% of new car sales are at least originated on the web)and stricter regional dealer agreements.....used is whatever they can get for it but you can book it out many places online or through your bank if you choose to finance it yourself.

Most importantly if it doesn't feel right don't do it. Set your budget, do your research, know your pricing, new or used which ever way you decide and be patient....there are millions of cars out there and it won't take forever for the right one to come along....

 

[Concrete Helmet]

@NVGator one more bit of advice, don't shop where Crete does. He shops with his wife's money so he's used to taking it up the ass.

Shouldn't Elf's be cleaning the workshop about right now?

 

[URGatorBait]

Shouldn't Elf's be cleaning the workshop about right now?

I have no idea. You'll have to ask t-gator what he is doing today

 

[Swamp Donkey]

Shouldn't Elf's be cleaning the workshop about right now?

I think the day after game day is a day off for them.

 

[MJMGator]

Alright here's my 3 cents coming from someone who sold boats for about 8-9 years.
Ask yourself How long do I plan on keeping the vehicle? What will it's current usage be? Will it be the same in 2 to 3 years? Will my needs change?

Don't limit yourself to just buying used, particularly if you're pretty certain you're going to keep the vehicle for 4 or 5 years or more.... rates are higher on used and if you're shopping Toyota again their resale is a double edged sword....When buying my last 2 Tundra's I was dead set on buying a 2 or 3 year old pre owned. Well if you look at the price of a 2 year old, low mileage Limited Tundra compared with a "end of the year" discounted one it just didn't make sense to buy used.

Keep in mind also the original powertrain and bumper to bumper on new vs "certified" or some other "aftermarket warranty"....these type of warranties typically have more holes in them than Chin's in a Chinese phonebook.... no matter what the salesman or finance manager lie and tell you to sell you the used unit....

As far as pricing goes on new, things have changed over the last 10 years because of the internet(about 70% of new car sales are at least originated on the web)and stricter regional dealer agreements.....used is whatever they can get for it but you can book it out many places online or through your bank if you choose to finance it yourself.

Most importantly if it doesn't feel right don't do it. Set your budget, do your research, know your pricing, new or used which ever way you decide and be patient....there are millions of cars out there and it won't take forever for the right one to come along....

I bought my Tundra 2 years ago. Researched it first on line. Sticker price was $61k, but because I did my homework I got them down to $43k. This was after I got them from $12k up to $25k on the trade-in of my FJ. Got it financed at 3% which was more than I wanted but they insisted Toyota wouldn’t go any lower at the time.

 

[Swamp Donkey]

I bought my Tundra 2 years ago. Researched it first on line. Sticker price was $61k, but because I did my homework I got them down to $43k. This was after I got them from $12k up to $25k on the trade-in of my FJ. .

It is just stupid that they try to build that much profit into a deal, but they do. You MUST do your research and the rarely even a few thousand less than wholesale in a used car.

You basically give them your used car for free or close to it.

 

[Egor's Assistant]

OK - I'm not proud of it,... buy it then move on.

Thanks for posting this valuable information. Dang, public service. I'm proud of you.