Trading in/negotiating for a new car

[jason_t]

I'm buying a new 2006 Honda Civic possibly as early as tomorrow morning. I'll be trading in a 2004 Honda Civic that is in excellent condition and paying the difference in cash. I know absolutely nothing about how to negotiate to maximize the value on my trade-in and minimize the price of the new car.

I haven't even learned the art of negotiation through experience. When I bought my current car I walked into the dealership, pointed at a car, said I wanted it, looked at the sticker price of $16360, offered $14500, he countered with $14800 and I accepted. I know that car negotiations are not supposed to be this easy and I don't know why it was for me; the only thing I can think is that I bought it on the evening of April 15, 2004 and maybe the dealerships don't get much traffic that day.

I don't expect to get much below MSRP here being that the car was just released last Friday. But I have been told that dealers have something called a "holdback" and that can be used to get a lower price on the car. What is that, how do I find how much it is and how do you bring that up with the dealer?

I'm looking for any other tips/suggestions/etc. that you might have.

Thanks.

[Al P]

http://www.carbuyingtips.com/


If you are going to be paying cash for the car and do not need financing, find out about what rebates are available if you finance through the dealer. As long as there are no early repayment penalties on the loan, finance the car to get the rebate and then pay the car a few days later.


That will also improve your credit score.

[STLantny]

1. Dont trade the car in, sell it privately, the time you take to sell it will be worth the cash.


Other than that, know what you should be paying for the car, and really low ball it. When I went to buy a car, teh salesman asked what I did for a living, and I told him I play poker, he was really interested, and I actually helped him get signed up and deposited online, he gave me a HUGE deal, but I backed out at the last minute, becasue I want to find something else, I think.

[newhizzle]

wait till the end of the month, they have to hit quotas and are willing to go lower in the last couple of days of a month

[lu_hawk]

trading in is almost always going to be worse than selling if you are looking to maximize your value. also, when you trade in they will most likely give you what seems like a good deal on the new car, but then they will lowball you an equal amount on the trade in so that you really aren't saving anything. but if you are looking for convenience and don't care about maximizing your value then just trade it in.

[handsome]

Wait til December 31. Get the low-end retail value for your trade-in, take the difference between that and the invoice price for the new one, and that's what you should be paying. BTW, sticker prices are usually wayyy overpriced.. you prolly could've gotten the Civic for $13k or so.

[jason_t]

[ QUOTE ]
1. Dont trade the car in, sell it privately, the time you take to sell it will be worth the cash.

[/ QUOTE ]

The Kelley Blue Book trade-in value for my car is $12100 and the private-party value is $13700. I'm not sure if $1600 is worth the effort and time that selling it privately would require.


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Other than that, know what you should be paying for the car, and really low ball it.

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How do you find what you "should" be paying for a car?

[STLantny]

Through contacts, or the web. I know a couple people that own car lots, so I just ask them what a particular car goes for at auction (normally lowest price the dealer can pay). 1600$ is 1600$ for waiting a couple weeks, and doin nothing, and you maybe able to make more....

[jason_t]

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trading in is almost always going to be worse than selling if you are looking to maximize your value.

[/ QUOTE ]

Yeah, I understand that. What I mean is I want the convenience of trading in without feeling like I'm losing a lot of value on my car.

[jason_t]

[ QUOTE ]
Wait til December 31. Get the low-end retail value for your trade-in, take the difference between that and the invoice price for the new one, and that's what you should be paying. BTW, sticker prices are usually wayyy overpriced.. you prolly could've gotten the Civic for $13k or so.

[/ QUOTE ]

How do you figure? $13k seems so far below the hidden invoice price I don't see how the dealers could turn a profit on that price.

[ QUOTE ]
[ QUOTE ]
Wait til December 31. Get the low-end retail value for your trade-in, take the difference between that and the invoice price for the new one, and that's what you should be paying. BTW, sticker prices are usually wayyy overpriced.. you prolly could've gotten the Civic for $13k or so.

[/ QUOTE ]

How do you figure? $13k seems so far below the hidden invoice price I don't see how the dealers could turn a profit on that price.

[/ QUOTE ]

You're thinking exactly the way they want you to. Even 13k would have been too much.

[Patrick del Poker Grande]

I'll second the www.carbuyingtips.com. (http://www.carbuyingtips.com.) It's an awesome website with everything you'll need to know, including how to find out how much the car really costs the dealer and how much you should be paying. It has spreadsheets and other tools to help. I used the info and tools there to buy two new cars in the last couple years and I was able to stick it to 'em about as well as you could expect to be able to. The key is knowing what the car costs them and showing them that you know what it costs and that they can't come over the top of you with some BS like they can with the average schmoe.

They still may be able to bend you over on this particular car, being that it's just coming out and Civics are popular enough that they're bound to sell any that they get on the lot, so the pressure's not really on them to sell. You can come back with the fact that the new body style is womanly and that no other man will buy it. See if you can get anywhere with that.

[Patrick del Poker Grande]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Wait til December 31. Get the low-end retail value for your trade-in, take the difference between that and the invoice price for the new one, and that's what you should be paying. BTW, sticker prices are usually wayyy overpriced.. you prolly could've gotten the Civic for $13k or so.

[/ QUOTE ]

How do you figure? $13k seems so far below the hidden invoice price I don't see how the dealers could turn a profit on that price.

[/ QUOTE ]

You're thinking exactly the way they want you to. Even 13k would have been too much.

[/ QUOTE ]
They're profiting if you're paying invoice. Also, I wouldn't mention that you're paying cash until you've negotiated a price solid. They're looking to make money on the financing as much as they are on the car itself, so they probably figure that anything they give you on the price can be made up in the financing. If they know ahead of time that they're not going to get anything on the financing, they won't give you anything on the price. The trade-in works similarly, but there's not much you can get around on that - you're either going to get a deal on the new car or on the trade-in, but not both. In fact, I'd negotiate the price on the car, then the trade-in, all the while asking about payments and whatnot all along, then drop the cash deal on them once you have a good price and a good trade-in. Chip those down as much as you can before they find out they're not getting anything from you in the financing.

[MaxPower]

go to www.edmunds.com. (http://www.edmunds.com.)

There you can look up the invoice price for the car you are looking at. There are also forums where people discuss how much they are paying.

The invoice price is supposed to be what the dealer pays for the car, but it really isn't. There are dealer incentives and holdbacks which they don't show you.

I got my car for a couple of hundred above invoice price, but it was a 2005 model that I bought 3 months ago.

Basically, all you need to do is decide what price you want to pay for the car. Dealers usually have an internet manager. You can email the Internet manager at a number of dealers and tell them the exact car you are looking for and how much you will pay. There is no need to negotiate in person. If you do negotiate in person just hold your position and make no concessions whatsoever. They will eventually come down to your price.

When I visited a dealership, I basically told the guy that I had done research on the internet and I knew exactly what other people were paying for the car and I wasn't going to pay any more. They protested a lot, but they finally gave a quote that was less than what I asked for. I then left the dealership, called another dealer and got it for $200 less.

I didn't trade in my old car, but from what I understand they will always screw you on the trade-in. The only thing I would recommend is to negotiate the trade-in seperately from the car price. The same thing goes for the financing.

Negotiate the price without even mentioning the trade-in and whether you are going to finance the car (or whether you will buy or lease). Once you have a price, negotiate the trade-in. Once you have that, then start talking about financing. If you don't do this, they will screw you.

I found edmunds.com to be the most useful site when buying my car.

Good luck.

[Eurotrash]

[ QUOTE ]
You can come back with the fact that the new body style is womanly and that no other man will buy it. See if you can get anywhere with that.

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i'm not sure if this is quite the help he was looking for, heh

[Patrick del Poker Grande]

[ QUOTE ]
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You can come back with the fact that the new body style is womanly and that no other man will buy it. See if you can get anywhere with that.

[/ QUOTE ]




i'm not sure if this is quite the help he was looking for, heh

[/ QUOTE ]
You've got to push even the smallest edges.

[jason_t]

Thanks for the post Patrick. That link looks helpful.

[ QUOTE ]
You can come back with the fact that the new body style is womanly and that no other man will buy it. See if you can get anywhere with that.

[/ QUOTE ]

This car is womanly?


http://i3.photobucket.com/albums/y73/jason_t712/06civic-321.jpg

[Patrick del Poker Grande]

[ QUOTE ]
Thanks for the post Patrick. That link looks helpful.

[ QUOTE ]
You can come back with the fact that the new body style is womanly and that no other man will buy it. See if you can get anywhere with that.

[/ QUOTE ]

This car is womanly?


http://i3.photobucket.com/albums/y73/jason_t712/06civic-321.jpg

[/ QUOTE ]
That's actually much better than the coupe that was posted in a thread a day or two ago. It needs bigger rims, though. Not anything gaudy, just an inch or two bigger. I actually like the current/old body style, but alas you can't stop progress, can you?

Good luck with the dealer. Stick it to those assholes.

[jason_t]

Oh the new coupe is terrible, I agree. The EX trim, which I intend to get, will come with bigger rims among some other great features. The 2004 body style is lovely, but they've done so much work on adding more power to the engine without sacrificing the economy of the Civic and the interior is larger and more luxorious than any previous Civic. I saw a 2006 test model a couple of weeks ago here in Hollywood and the car really is a beauty.

[Patrick del Poker Grande]

What kind of performance are we talking about? I'd google it myself, but I'll give you a little quiz to be sure you're ready for tomorrow. Torque? Power? At what RPM? 0-60 time? How good is the fuel economy?

[jason_t]

The engine is larger at 1.8L instead of 1.67L, the torque is 128 @ 4500 instead of 110 @ 4500, and the power is 140HP @ 6300RPM instead of 115HP @ 6100RPM. The fuel economy is 30/40 instead of 29/38. I don't know the 0--60 time. What use is knowing these things for tomorrow?

[Patrick del Poker Grande]

[ QUOTE ]
The engine is larger at 1.8L instead of 1.67L, the torque is 128 @ 4500 instead of 110 @ 4500, and the power is 140HP @ 6300RPM instead of 115HP @ 6100RPM. The fuel economy is 30/40 instead of 29/38. I don't know the 0--60 time. What use is knowing these things for tomorrow?

[/ QUOTE ]
You've got to know your car inside and out. You know all the options and all the combinations possible? Chances are they'll have some package with a couple options that you don't necessarily want to pay for, but you'll be stuck getting them unless you want to order a car. Gotta know the details. I'm a nit, but I like to know more about the car than the salesman when I walk in the door.

[DasLeben]

[ QUOTE ]
The invoice price is supposed to be what the dealer pays for the car, but it really isn't. There are dealer incentives and holdbacks which they don't show you.

[/ QUOTE ]

This is true. The incentives are usually out in the open, though. I've never seen a "secret" incentive.

Dealer holdback is something they won't show you, but will tell you about if you ask. Generally speaking, you will not get a car marked down into the holdback. The dealership is a business, and would make zero money if cars were being sold for invoice minus holdback. The exceptions to this are if a car must be moved off the lot for some reason, or if the factory to dealer incentives make up for the lost revenue. Generally the latter is the case.

As for the 2006 Civic, I can almost guarantee you that you will not get the car for anywhere near invoice. There may be lease/finance incentives, but I honestly wouldn't count on it. Everyone and their mother is going to want this car, so I doubt they're going to have any problem selling the car for MSRP. Frankly, if you go in there and ask for invoice, they'll basically say "if you don't buy it for sticker, someone else later today will come and buy it for sticker." Then they'll just let you walk.

Then again, they may put out incentives just to get the car out on the street and into the public eye. Case in point: The 2006 BMW 3-series lease offers.