B-Lines guide to buying cars.....

B-Line · #1 05-08-2009, 11:04 PM

Since you asked

B-Lines guide to buying cars:

I hope this helps potential car buyers. None of the information I'm giving here is any big secret. It's just a guide to help. Having said that, here are my rules:

1) Realize when you buy a car you are either going to get a little screwed or a lot screwed. I make every effort to ensure that I just get a little screwed. But car dealers make their margins based on what the buyer doesn't know and while there is never 100% transparency, I dig for all the information I can find before I buy. Let the car dealerships make the big money on the other guy. The young couple/schmuck who walks in and says, I'll take that one... They'll still make money from me but they probably won't be popping champagne like they will with most of their sales.

2) *** Never, *** ever, ***EVER, negotiate a car purchase in person at the dealership. Go test drive the car, figure out what options you want, then GO HOME. Don't talk numbers at all.

3) Go home and go to the manufacturer website, build your vehicle, know exactly what options you want. Then go on Buy Cars Online, New & Used Car Search, Auto Classifieds or New Cars, Used Cars, Car Reviews and Pricing - Edmunds.com and punch in the car with all the options in the menu. The websites will tell you what the invoice price is. What the dealership pays for that vehicle.

4) Go back to the manufacturer build website (BMW North America) and use the "locate a dealer" function. Then choose the option that shows all dealers within 200 miles (or more if need be.) PRINT THAT LIST OF DEALERS. that printout is going to be your "manual" your "book of resources" for your car purchase. So staple it and keep it close. You're probably going to call anywhere from 25-30 car dealers..

5) Lets talk about pricing. I assume that almost ANY car can be found and purchased for $500 over invoice. That is my mantra. In all the cars I have ever bought the only car I didn't get for $500 over invoice was my Porsche Turbo. I paid MSRP but literally, I had one of the first ones in the country. Most dealers were charging $10k premiums and I bought mine at MSRP. Yes, I did go to Portland Oregon for that deal but it was worth it to me. So again, my point is, I assume EVERY car can be bought for $500 over invoice and if my local dealers say, "no" then I cast my web further until I find one or multiple dealers who say yes. Inevitably I almost ALWAYS find one or multiple dealers who say yes.
- I purchased my BMW 750i for $500 over
- I purchased my wife's Q5 the week they came out, $500 over invoice
- I purchased my brothers M5, $500 over invoice
- I purchased my X5 4.8is, $500 over invoice.. I could go on and on.. I also help my friends buy their cars... $500 over invoice.

6) When I call dealers what I do not do is negotiate the price. When I call dealers what I do is tell them how much I'm willing to pay. I already know the invoice price w/options and I say, "I want your BMW M5, Gray, invoice is $93,500, I'll pay $94,000. Do you want the deal? If not, thank you. If yes, great, I am ready to pick up the car ASAP.

7) While I'm calling all the dealers on my master list, I take careful notes. Who am I talking to? What car do they have? Color? Options? etc. Believe you me, it gets confusing and fast if you don't take careful notes. I attack the master list like it's my job to get the perfect car at the perfect price and I don't mind if I have to drive 100 miles or 200 miles to get it.

8) I almost always lease. It has a lower cost of ownership for certain drivers. But this is not a lease vs. purchase thread so I won't get into it. When you lease, the residual of the car is set by the factory. I negotiate the sale price and the only remaining factor is the money factor (or interest rate). Now the Money Factor is set by BMW Financial Services but some dealers can and will put additional points on the lease deal. The consumer doesn't know they are buying the rates cheaper and selling them to you for a profit. So when i call dealers, I will ask several of them what the Money Factor "BUY RATE" is and whoever gives me the lowest one, I generally assume that's the real buy rate.

9) Now some dealers will give a better "buy rate" but a higher priced car. Other dealers give a bad "buy rate" but a lower priced car. I compile the information and then make an offer to the dealer. If they don't want my deal, I have 25 other dealerships that I can call after that may be willing to except it. So when I go to buy I use the lowest sale price "500 over invoice" and the lowest "buy rate" And I say, I want this car for this much and at this rate. Do you want the deal?

Car salesman will almost always complain that they aren't going to make any money for the sale but don't believe them. They are still making a little, just not a lot. They are not screwing you but selling you a car on your terms. Now of course this model might not work if the M5 just came out and everyone wants one but there is only two in the country. But for any reasonable car, this method ALWAYS works for me. And there is often even more room in the deal if I wanted to really squeeze the dealer for every penny but I'm not trying to be a cheap ass. They do deserve to make a living.

But again.. All my work is done on the phone, in front of my computer with a pen and a master list. I know every detail of the purchase before I go in. I know the drive off fee's, I know the invoice prices, I know the money factor, the residual.. And I have all terms on paper before I step foot into a dealership. When I go in it's to sign the paperwork only. And that's how I wrangle my deals..

Any questions?

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askhao · #2 05-08-2009, 11:11 PM

Quote:

Originally Posted by B-Line

Since you asked

2) *** Never, *** ever, ***EVER, negotiate a car purchase in person at the dealership. Go test drive the car, figure out what options you want, then GO HOME. Don't talk numbers at all.

y not??

B-Line · #3 05-08-2009, 11:18 PM

Quote:

Originally Posted by askhao

y not??

Cause they are better at selling than you are at buying. They've been trained. They talk fast, throw out terms that you don't understand, etc. It's a high pressure sale.

I even the playing field by doing my due diligence. And you can't do that standing in a dealership with your: wife, mother, sister, friend, whining "I want the car..."

You don't have a calculator, you don't have a pen and you haven't called 30 other dealerships..

As long as you stand in the dealership, your ass belongs to them. They are in control. You want control, GO HOME. Pull out your computer, a pen, a master list... And make calls. And if a dealer won't negotiate with you by phone and email... SCREW THEM.. They are trying to fuck you.

They're not doing you a favor by selling you a car. Your ignorance is their profit margin. The way to turn that around is to go home and do WORK.

JCL · #4 05-08-2009, 11:19 PM

Quote:

Originally Posted by B-Line

Any questions?

How do you determine the value of the subsidies back from the manufacturer to the dealer, particularly when they are volume based? Is that money being left on the table?

Do you attach any value to quality of after-sales service based on buying the car from the dealer that will be doing the servicing?

B-Line · #5 05-08-2009, 11:26 PM

Quote:

Originally Posted by JCL

How do you determine the value of the subsidies back from the manufacturer to the dealer, particularly when they are volume based? Is that money being left on the table?

Do you attach any value to quality of after-sales service based on buying the car from the dealer that will be doing the servicing?

Good question.. I don't. Whatever money they get for holdbacks, volume sales, etc. That is how they make their money from my sale. They are not making premiums on my sale and they do have a right to make money... So I consider the subsidies to the dealer as not being on the table.
That's why I say, they still make money... They make the $500 over invoice. And whatever sub they get..

I do not attach ANY value to quality of after sales service. Why cause they give me a loaner? Even that's difficult to get. If I want quality, after-sales service, I'll slip the service manager a $20.
But I have never, ever, found any correlation between buying a car from a dealership and getting good service from the same dealership.
They treat you the same either way... At least in my experience.. Especially since they call you with those stupid surveys..

askhao · #6 05-08-2009, 11:34 PM

Quote:

Originally Posted by B-Line

Cause they are better at selling than you are at buying. They've been trained. They talk fast, throw out terms that you don't understand, etc. It's a high pressure sale.

I even the playing field by doing my due diligence. And you can't do that standing in a dealership with your: wife, mother, sister, friend, whining "I want the car..."

You don't have a calculator, you don't have a pen and you haven't called 30 other dealerships..

As long as you stand in the dealership, your ass belongs to them. They are in control. You want control, GO HOME. Pull out your computer, a pen, a master list... And make calls. And if a dealer won't negotiate with you by phone and email... SCREW THEM.. They are trying to fuck you.

They're not doing you a favor by selling you a car. Your ignorance is their profit margin. The way to turn that around is to go home and do WORK.

ic...that makes a lot of sense!

4.6is Ryder · #7 05-08-2009, 11:38 PM

All of this goes out the window with a trade......another reason a lease is a positive thing. I would add....avoid telling them you have a trade until numbers are met in your favor......Phil

FSETH · #8 05-08-2009, 11:44 PM

Good info. Thanks for sharing.

RxGuy · #9 05-09-2009, 12:05 AM

How about preparing a detailed "Purchase Order" type document with all the options, etc. that you want for you car, then getting a list of dealers and the "Fleet" contact persons. Then, you email/fax your PO and tell them that you are doing a competitive offer and whomever gives you the lowest price gets the car bought from them.

Whittle that down to 5 dealers, try to play them off each other, and then go to the lowest dealer. I wonder if this approach would get you close to or below the $500 over invoice.

I read of this approach from Fool.com: Stock Investing Advice | Stock Research

B-Line · #10 05-09-2009, 02:46 AM

Quote:

Originally Posted by RxGuy

How about preparing a detailed "Purchase Order" type document with all the options, etc. that you want for you car, then getting a list of dealers and the "Fleet" contact persons. Then, you email/fax your PO and tell them that you are doing a competitive offer and whomever gives you the lowest price gets the car bought from them.

Whittle that down to 5 dealers, try to play them off each other, and then go to the lowest dealer. I wonder if this approach would get you close to or below the $500 over invoice.

I read of this approach from Fool.com: Stock Investing Advice | Stock Research

I would suggest that any system that keeps the buyer out of the showroom and puts dealers in competition with one another for your business is probably a good one. My way is not the only way and the way you suggest sounds quite reasonable..

The only caveat being, I have done on several occasions, tried the "REQUEST A DEALER QUOTE" option on the cars.com and edmunds.com. Without fail I have come to realize that no matter how specific my request is, color, model, options, etc. They universally almost NEVER respond with answers to the questions you ask. They use the tool as a lead and then start blitzing you with phone calls and emails.

My point is, at least from my experience, there is no substitute for getting on the phone and asking direct questions. Most sales people will skirt any and all questions with comments like, "come on in and we can discuss it" or they'll only answer 1/2 your questions. They'll give you the residual but not the money factor or invoice price. Again, they know the more information they give you the less power they have to upsell you. So I have to pull the information from dealers like I'm pulling teeth. And this is ALWAYS the case.

But I don't let them play that game. I tell them, I will not come in, I will not sign the paperwork, I will not entertain the sale unless they give me all the numbers while I'm sitting at home from my cpu. Then of course I always cross check the numbers on a lease calculator.

So the fax trick may work but don't be surprised if more often than not, you do not get your direct questions answered directly. And that's why sometimes you need to compile the information for yourself by calling multiple sources and then not ask dealers for their pricing but instead, telling them exactly what numbers you want that will close the deal.

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