|
Item Posts
|
|
|
|
|
singen77
New User
| Posts: 1
| Joined: 02/10
Posted: 02/04/10
12:40 PM
|
|
This is a little like shutting the barn door after the horse got out, but...
I recently bought a low-mile 2002 Toyota Solara in pristine condition. I researched the car thoroughly, using the KBB MSRP price for setting negotiations. KBB gave a listing of $10,100 for the car. The dealership was asking about $12,000. When we were finished we settled on a price of $9,700, before tax.
However, KBB said its listing was where to start negotiations, not end them. And I've heard some dealerships can set a car price quite obviously high to make it seem like a deal when they drop the price,yet ultimately getting the price they want anyway.
I'm always a little paranoid after purchasing a car, and this is probably my paranoia working, but I wonder after the fact if I might have given up too much of my negotiating power on this. Am I nuts?
|
|
|
|
dub161
New User
| Posts: 5
| Joined: 02/10
Posted: 02/13/10
01:44 AM
|
|
Sounds like you did'nt do to bad, I mean, it's a Toyota! And if it is in pristine condition, they paid ALL the money for it when they bought it too. Bottom line is, you didn't pay MSRP, it's pristine, it'll last you 250,000 miles or more and again, it's a Toyota....what can ya do? One question....do you love it?  Ok then, enjoy it and don't worry about what you paid.
|
|
|
|
JonAnders
New User
| Posts: 5
| Joined: 12/09
Posted: 02/28/10
09:04 AM
|
|
Congratulations on your purchase!
Although it is, as you say, shutting the barn door after the horse got out, I'll do my best to shed some light...
Whenever you are preparing to negotiate on a USED car (as opposed to NEW), you should find one or more sources of pricing for TRADE-IN (or wholesale) value (as opposed to any type of MSRP pricing). Using these values allows you to get a good feel for what the dealer actually paid for the car to begin with. Once you adjust for mileage, condition, features/options, etc., you will arrive at a very close guesstimate of the dealer's actual upfront investment (quite often within $100 or so).
From there, you must add anywhere from $200 to $500 for dealer overhead. This covers things such as delivery cost (to get it to his lot if he bought it at auction, for example), sales commissions, inspection and repairs, final wash, wax, polish, etc. Now you have the dealer's final investment.
Now figure a reasonable profit for the dealer - remember, the overhead above all goes to others - because the dealer needs to make a profit.
From there, you negotiate to defend against the salesperson's ploys, and attack with some of your own. In the end, you dance until you meet in the middle - or decide to walk out.
As for your question regarding ridiculously high sticker prices - it's a common strategy most-often used in the housing market. You are correct, though, it's designed to allow you to feel you "won" in negotiations.
I hope that sheds some light on the tip of this particular iceberg. Negotiating is both an art and a science, and the buyer MUST be prepared to do battle against the dealer's trained negotiators.
Best Regards,
Jon Anders
http://www.OutfoxTheCarDealer.com
http://www.OutfoxTheCarDealer.com
|
|
|
|
|
|
|
|