There comes a time in every man’s life when he has to buy “The Misses” a new car.  Even if you are the CarGeek, and you talk car stuff every day, it can be painful to go through the process of buying a new car.

The vehicle of her choice was a Toyota Highlander.  We were on the purchase path in early 2010.  When the Toyota brake recall occurred we cooled-down the buying process and waited.  Now in June 2010 we shopped several dealerships in a nearby metropolitan area.  The CarGeek also called several dealers and reviewed NADA and Edmunds for what “Dealer Cost” would be expected to be.

The selling strategy has been amazing in this major market.  Dealer cost has come to include a variety of overhead items including:

1. Floor Plan Cost
2. Interest Expense (Even if the car is not financed)
3. Dealer Holdbacks
4. Bonus Fees
5. Prep Costs
6. Gas
7. Cleaning
8. Inventory Tax
9. Processing
10. Toilet Tissue, etc

Everything imaginable is included in the “Dealer Cost” of a new car, truck or SUV.  If the dealer can focus the buyer on the “total cost to operate his business” it gets the buyer’s attention away from the fact that there are holdbacks and incentives included in the REAL base cost price, the top line before the add-ons.

CarGeek car-buying-advice … Don’t pay for the add-ons.  Make it clear the first few minutes that you want to pay approximately dealer’s cost plus a reasonable and respectable markup without the games.  They will initially say, “Those costs are assessed to us by Gulf States Toyota, the six state distributer.”  OK, let them know you will drive to Alabama to buy a car if it means wiring around such monopoly.  Be kind, respectfull, firm and cool.  Do your homework.  At one of the dealerships I was able to finish the sentences of the sales manager.  I think it was a test to see my knowledge of the product.  He said, “You’ll want power seats.  They are … he paused and I finished his sentence, “$320 suggested retail $256cost.”  At that point he knew that I knew what the numbers were and was prepared to seek a good price on the vehicles he represented.  We also learned within ten minutes that he was not motivated to sell us his inventory at a deep discount.  We were able to make better use of our time at the next dealership.

At the next dealership we were met with an equally friendly sales staff and were presented with a very good price within a few minutes.  The sales rep made it clear that he wanted to sell us a car that day and soon after we discussed our desire to pay slightly over dealer cost we were presented with a price by the sales manager that was $1,000 less than the offer that was already the best offer.

We offered a few stipulations to do the deal:

• We did not want to waste their time or ours entertaining extended warranty opportunities
• We did not want to pay an exorbitant price for title, license, processing fees, etc.  These are known as PAC (Profit After Commission) fees

They agreed, but still presented us with a title, licensing and processing fee that caused us to have to leave the dealership that evening.

They stayed cool and professional and they sensed that I was calling on a higher authority to maintain my composure, although Mrs. CarGeek was admitedly not happy that she did not drive away that evening with the car.  She wanted THAT Highlander since it was equipped like she wanted it.

Knowing it was unlikely that it would sell overnight I anticipated a call from the dealer the following morning.  At 8:30AM he called, “Hey, I want to thank you for coming to the dealership to see our cars.  What would it take to win your business?”  I simply stated that we were hung-up on the PAC fees.  Normal is OK and expected, but I was not prepared to pay the number that was presented the day before.

After a quick meeting between the salesman and the sales manager, I received a call back that we had a deal.  Not wanting additional surprises, I requested that they email me the final numbers and we’d return to sign the paperwork.  He did, we did, and we drove Mrs. CarGeek’s 2010 Toyota Highlander home a few hours later.

Summary:

1. Know what you want
2. Do your homework
3. Check NADA pricing
4. Check Edmunds pricing
5. Check CarGeek’s priceing
6. Make it clear that you know the  market on that car, what options re available with what model and at what price
7. Be respectful and professional
8. Stand your ground
9. Drive home happy!

+CarGeek