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“The waiting game” is the least exciting way to pass the time, but if you’re looking to get a good deal on a new car, then you’re going to have to be patient. Continue Reading…
This morning, we got an automated Email from Overstock.com advertising their “Lowest Price Guarantee” car-buying service. Does this mean they are keeping huge fleets of cars somewhere? Not exactly. Overstock is a widely-known service that helps retail outlets and manufacturers of consumer goods liquidate excess inventory by offering it online, and they have just extended this model to cars as well. Is there a catch? Of course there is.
Using Overstock.com’s search tool, you can look for new cars and used cars in your area with a few mouse clicks. These cars come from local dealerships, not Overstock itself, and certain dealerships have been certified to offer the “Lowest Price Guarantee,” which is basically $300-500 over invoice. Overstock sends these dealerships business, and in turn the dealerships offer their “lowest price.” Now, we all know that in many cases, like an excess of inventory, a good negotiator can get a car below invoice, especially leftover models such as the 2010 Mustang GT, or recently discontinued cars like the Pontiac G8, which saw base models sitting on dealer lots for months, eventually being sold at a big loss (and a big gain for the customer). The bottom line is, none of this really adds up to excess inventory, just a general agreement to offer a good price with no haggling.
There’s also the “Clearance Lot” section, which is exactly what it sounds like. Cars are marked down to $100 over invoice, but it’s only the “deal of the month” that gets any real-world savings. So, one specific model, in one specific trim, for the whole month. Ironically, today’s “deal of the month” is the RWD Toyota Sequoia. In the last few days, Toyota’s largest SUV has been surrounded by rumors of extinction, so it’s not surprising Overstock has it in the Clearance section.
We did say there is a catch, and there is: after shopping around through Overstock’s site, you still have to contact a dealership yourself, and deal with salesmen and managers when you get there. They will still try to sell you all the dealer add-ons that make them the most profit. And you still have to work out financing through the dealership (or independently).
The bottom line is, this service is really only for people that don’t have the first clue how to negotiate for a car. But I can get the Enzo Angiolini “Beehive” Stilletos for just $34.99. So that’s something.
Now that the market is on a tentative upswing, there is no time to waste – one of the positive points about a recession is that new-car buyers are in charge when it comes to making a deal.
Data collected from a recent survey by the Consumer Reports National Research Center shows that half of those polled believed that they were able to negotiate a much better deal in these tough times. Further results found that around 27 percent of respondents reported no change, while 18 percent said their ability to negotiate has diminished some or a lot.
Other important information gathered from this survey showed that income played a significant role in negotiating tactics. New-car buyers who earned at least $50,000 were more likely to say that their ability to negotiate improved, compared to those with household income under $50,000, while twice as many consumers who earn less said their ability diminished relative to those who earning power was greater.
So how do you ensure you get the best deal? The key to getting the best deal is to do your homework and have a strategy when your go into dealerships. Here are some negotiation tips that will come in handy when you’re ready to start haggling:
- Be sure to get all dealer quotes by email or phone. This allows you to focus on the dealership offering right car and price.
- Don’t be afraid to play one dealer off another in order to get the price lowered, and tell them that you’re going with the lowest price, even if it means driving a few miles out of town.
- It’s important to negotiate up from the bottom line price, not down from MSRP. This tactic keeps you closer to the real target while proving you mean serious business.
- If you have a trade-in, keep it removed from the new-car negotiation, as it’s a totally different transaction that needs to be managed separately.
- Stay away from dealership sales events – the showroom tends to be staffed with its best, profit-creating experts during these promotional events.
- Compare interest rates and get pre-arranged financing. This way, if the dealer can’t meet or beat your best loan option, you still have secured the best rate and are not pressured into taking a bad financial deal to get the car.
[Source: Consumer Reports]