Friday, June 6, 2014

The Art of the Deal ... WHY?

As many of you already know, I have just purchased a new car - a procedure that strikes fear in the heart of mortal men and women. When you buy almost anything else, you know what the price will be before you go to buy it, and that is the price you pay. With a car ... not happening! Two identical cars sold in the same showroom on the same day can vary by as much as $10,000 depending on the negotiating skills of the buyer, and most buyers, no matter how good their negotiating skills are, can't compete against a car dealer who does this many times every day.

Most people buy a car every 5-8 years. The last car I bought was for my wife and was now 8 years ago. The car I was replacing was my Saturn which I bought 12 years ago. In fact, it was one of Saturn's selling point that they didn't negotiate prices, they priced each car with a set price, so you knew exactly what you would pay up front.

I had done all my homework before I stepped into the dealership, so I knew what car I wanted and exactly what I wanted to pay for it. I had an advantage I hadn't had in the past, I didn't need a new car (my old one was still running well and in good shape), but I wanted a new car. In the past when I shopped for a new car, it was because the one I was driving (or my wife was driving) was about ready to stop performing that basic function. Not so this time. I could be picky as to what i got and how much I paid. I could easily walk away from a deal which wasn't exactly what I wanted ... or better!

My negotiating skills are good, but I am not kidding myself, I am sure someone with better skills could have done even better, but after doing all the online research (something that was not available for most of the 8 cars I have purchased in my life) I knew exactly what I wanted and what price I was willing to pay for it - and that included how much I would be willing to pay for financing. Having done this dance a number of times in my life, I knew the tricks that dealers pull to bring the price up, and as expected, the first offer came with a list of features that I didn't want - or more correctly, didn't want to pay for. I had test driven 2 different models and selected the one I wanted. The one I test drove had all of the extras that it could have - and in fact, was a Limited Edition of only 5000 cars. It was amazing, but had much that I did not want to add on to the final price. I negotiated for a model with only the features I wanted and rejected the list of add-ons originally presented to me. In the end, In the end - after an hour of back and forth negotiating - I got exactly the price I wanted to pay, at the finance rate I wanted (0%) and the price for my trade-in that I expected ... dealer incentives and rebates included. When I asked about the car I was finally getting, I was informed that I could have the car that I test drove ... with all the bells and whistles that I refused to pay for. I had gotten a good deal and a better car than I had originally planned on. (I later found out that during that holiday weekend, the dealership had a quota that the manufacturer had placed on it. That also played a part, and I knew that when I picked that day to make my purchase.)

But the question still remains - why does this have to happen? How many people pay more than they really have to because they don't know or understand the tricks that a dealer uses, or aren't very strong negotiators? I certainly have nothing against the dealer making a profit, but he always has the upper hand. Who decided that cars wouldn't get a set price and why has the public accepted it? Saturn (a GM division started in 1985) attempted to do things a different way. The brand was discontinued in 2009 and with it went the only car that had a set price. (There is a local dealership that advertises a no-negotiating price policy but I don't know how they price their cars so I don't know if this is in the buyers best interest or not.)

How about you? Do you enjoy the game of negotiating for a car, or would you prefer a set price when you walk into a dealership? What do you think of this policy?


  1. I am a decent negotiator but hate that I have to. Yes juat got a new car myself and with $2K in rebates I paid $5K under MSRP and with some freebies thrown in. No trade as mine was not running and worth more as salvage. I think I did okay,

  2. I, too, used to hate the haggling game at the new car dealership. We have solved this problem entirely by not buying new cars. The last time I bought a new one was somewhere in the 80s. While my income would allow me to buy nice new cars, I prefer to buy good used cars from a dealer that I trust. It's just the way we do it and it doesn't work for everyone.