Why engage in a back-and-forth with these people? Configure the car you want on the manufacturer website, note the list price, then send the configuration you want to a few dealers in your area and ask them to quote for delivering you that car. Accept the best quote. If they want to debate you about it, ask them to either quote you or forget it. There are even apps which enforce this - they get to quote you but can't communicate otherwise.
That's a great approach, and when there's a glut of cars sitting on dealer lots, you might even get responses. Right now, when most cars are selling for more than sticker, you won't. If you don't buy a car, that's fine, there are others who will.
People said this at the height of the used car shortage. It still wasn't true. In my experience, suckers were buying Corollas at 25%+(!) over MSRP. All I had to do was go to another dealership.
Let me put it this way: you've got the entire continental US you can buy a car from and shipping a vehicle coast-to-coast usually costs under $2,000.
So, what do you think is truer? Is the market excruciatingly tight, or are there just a lot of people making bad purchases out there?
Yup, last time, I just started looking for a particular few cars, got by parameters down (desired trim levels, cost limits, etc.) and emailed requesting quotes. Most wouldn't play, but I found one who was just "yup, this is what we've got, this is how we can configure it... cost is $xyz". After a few rounds of email, maybe a couple tel calls, I had a deal, went there for the first time to pick it up. When my wife needed a new car in the next year or two, guess who we called first? Same no-hassle deal.
It's a bit of a drive to get there in the adjacent state, but totally worth it.
Edit: Also, we made deals for vehicles they had in stock, not custom-configured from mfgr.
I did this in 2017 and none of the dealers I contacted would play ball. Every one of them told me I would need to come in. When I went in, they couldn't tell me the final price until they knew if I would buy a service contract, if I would be financing through them and if so, what my credit score was, etc...
I ended up leaving with the car I wanted and paid about $500 more than I wanted to but they wore me down.
I think if you buy through Costco you can avoid some of the bullshit, but you do pay more than you probably have to. It might be worth it though just to have an easier experience.
Seriously. If they have a glut of the model they can't sell enough of then they'll probably play along -- but otherwise they know you know what you're doing and they'll make very little money on you, and they'd prefer to make more money with somebody else. They're maximizing profit, not number of cars sold, and for many cars it's supply that is the limiting factor, not demand.
Costco seems to have suspended their car buying program. I tried to use it a few months ago and couldn’t even get started. Probably no dealers near me are even participating in the program in such a seller’s market.
I purchased my Jeep Wrangler in 2018. I found the color I wanted Online. Pre-qualified with my bank. Contacted the internet sales address, told them I wanted the car and I'd be by at 6 to pick it up and they had it ready.
My best car buying experience has been Tesla though. Ordered on the app. Put 500 down. Got a build date. Got a notification when it was in delivery. Added my payment info. Got a time to pickup car. Drove home.
The words "Meh, if you can't do this, I'm probably fine with a used one. CarMax doesn't haggle. Can you make a quote, or am I leaving" usually get them to move.
Right now, some might balk. But you know what? That salesperson cares about their quota, and if your purchases pushes them over today's goal number, they twitch. Because the inevitable next buyer tomorrow isn't going to get them over the quota they need to meet today.
And if your dealership really plays hardball? Move on to the next one. Or buy used from a place that doesn't haggle.
The way to lose this is if you want a specific year/make/model - they'll get you. If your entire attitude is "anything within that set of parameters", it's much harder for them.
That’s how it used to work (and still does for some less in demand/in short supply models), but if you’re after something that’s even moderately popular (most SUVs and EVs), you’ll hardly see any replies nowadays. That was the case when trying to get my wife a new crossover recently. We ended up placing an order in person with a dealer that “only” charged MSRP without a bunch of crazy add-ons, albeit with an additional dealer fee (pure profit) of $800. But when the car showed up 3 months later it was missing power seats due to a supply shortage. We walked from the deal and are now shopping again. Fun times.
Just like mortgage brokers are obligated to send you an official, standardized "loan estimate" when you ask about a mortgage, dealership should have something similar with cars.
Specifically: the car is only the first part, then there's extra warranties from dealership, financing, etc.
A standardized quote that gives you the price of these optional items would go a long way in making the experience smooth.
Private companies can solve the issues themselves (Carvana), but that's coming at a significant $ premium so far.
The FTC rule mentioned in the article mentions this:
> Require full upfront disclosure of costs and conditions: The proposal would require dealers to make key disclosures to consumers, including providing a true “offering price” for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees. It would also require dealers to make disclosures about optional add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms.
If we're talking about the US, why layer on even more regulation to an already unnecessary industry? Just eliminate the dealership model & allow people to order directly from the manufacturer.
In the UK, you have 28 days to change your mind and arrange your own financing. So for informed buyers, a common tactic is to agree to whatever shitty high interest loan they're selling to keep the sticker price down, then just call the loan company and cancel and pay it off with cash from the loan/savings you actually want to use.
I also had the experience where I placed an order on ford website, routed it to a dealer who agreed to honor the online price. 5 months later, when the car was delivered onto the dealer lot, they wanted 10k more.
Even better, if you're a AAA member they will do the quote hunting for you. The last two times we bought cars, we test drove a few models, found the one we liked, and then relayed our preferences to the AAA guy. Picked up the car from his office with no dealership drama.
I did exactly what you mentioned - many didn’t play ball but one made an appointment with confirmed inventory. Drove 2 hours only to be told car I wanted “just” sold and by the way we add $10k to MSRP - classic bait and switch.
Make sure to triple check the paperwork at the end, someone went viral yesterday for accidentally paying $6k over what they believed they were for their Toyota Corolla.
You really have to try not to read what you're signing for something like that to happen. My fiance bought a car less than a year ago and the final loan price was everywhere, even highlighted. I've bought cars in two other states and it was never exactly hidden.
TrueCar used to be a pretty good one, and was the service behind Sam’s Club and USAA’s auto buying programs. But it’s pretty much no longer worth the bother now. Don’t know of anything newer that’s better. Keep in mind that no app can work miracles in a crazy market. They all ultimately depend on dealers competing with each other to deliver any value, but dealers just haven’t needed to compete in the last couple of years.
I've been buying cars second-hand from private parties for my last three cars. It's been a great experience. Everyone's been honest so far, and I've never had unreasonable problems with any of the cars.
I'm not sure I'd ever go to a dealership again. They make things so painful, and wring as much money and stress out of you as possible. There seems to be zero benefit for the consumer.
I anticipate moving to Los Angeles within the next 12 months and am absolutely dreading the inevitability of needing to buy a car. I haven't needed a car since 2007 since I've lived in a series of major cities with excellent train/bus/subway systems. Every single day, I've said a silent prayer of thanks that I haven't had to pay for gas or insurance / sit in traffic / deal with road rage (mine or that of others) / worry about someone keying my car or stealing my catalytic converter.
Reading the comments here about peoples' experiences at dealerships, I kept thinking "Do I really need to move to LA? Is there any other way I can accomplish my goals?"
I'm glad to see you've had success dealing with private parties. This is absolutely the way I will go when it comes time for me to bite the bullet and buy a car.
Well, LA has some nice weather...Have you considered maybe looking into a three-wheeler like a Can Am Spyder [https://en.wikipedia.org/wiki/Can-Am_motorcycles]? (As someone who is a big fan of motorcycles, I used to recommend folks to consider the wonderful life of 2 wheels, but i understand not everyone would be into it...plus LA traffic might make conventional motorcycles risky for new riders.) Of course, I'm assuming that an alternative like that a three-wheeler might be cheaper, or more obtainable (either new or used). Then again, if your job is not far from where you will live, could a bicycle fit the need - either electric or conventional?
Los Angeles resident here. Depending on where you work, there's actually some great options for biking here. For one, there's an awesome bike trail on the beach ranging from Malibu all the way down to Torrance. Occasionally there are creeks going inland that have protected bike lanes and act as "bicycle freeways". Look for Ballona Creek bike trail for example. Finally, there's a great Metro connection between Santa Monica and downtown Los Angeles (expo line).
I bike to work everyday on my electric bike and run most errands by bike (doctor, haircut, groceries). While I do have a car, I only use it for trips outside of town on the weekends (plus monthly Costco runs).
LA has one of the best (if not the best) used car markets in the world. Prices are admittedly high for any vehicle right now, but if you do your research and are ready to jump when things pop up on CL, you can never overpay for a car again here.
Depending on where you live in LA, and your interests, you may not need a car. LA's public rail system can get you to Downtown, Pasadena, Long Beach, Inglewood, Redondo/Manhattan Beach, Santa Monica, Culver City, and Hollywood/Universal City. The bus system can get you to 95% of the county. The commuter rail system can get you out to Ventura, San Bernardino, Riverside, and Orange County.
I know a number of NYC and Chicago transplants who moved to LA without cars and get along fine. Pre-COVID I commuted to work by rail for several years, and occasionally take the rail to work now.
My last two car purchases were off of Craigslist. So far they have both been good. But I did have to walk away from a few bum deals to get those cars. That said, the last time I tried to use a dealership they weren't exactly honest[1] so it's just part of the process of buying a used car.
[1] They insisted the car was in perfect shape and passed their 87 point inspection even though it was listed as totaled due to flood damage when I ran the Carfax. Plus it had this weird thing where it was listed as garaged in New York but titled in Florida and it seemed like nothing on the report matched up. That and the VIN was obscured by the black goop they used to glue the windshield on when someone replaced it, I had to use the VIN from the door. This was back around 2006-2007, so maybe the situation has improved, but I kind of doubt it.
The only benefit to the consumer is you can go to a location and see several different car models at the same place. If buying used you need to go to some person's house at a time that works for the seller and then hope the car is insured and if a big purchase price hope that they are not currently driving it so that you can take it to your mechanic to have it checked out.
But other then that the dealerships have no benefits in my opinion. The multi point inspections they do are basically a joke. The person doing it is some 10 month mechanical school graduate tasked with the jobs that don't make the company any money but that they are forced to do like warranty work and inspections. You would be much better off taking it to a mechanic that knows what he is doing and is being paid by you to find issues. I am very thankful I am a backyard mechanic and can buy used with much more confidence then the average buyer. I can also buy cars with known issues and fix them.
The last time I was at a dealership was with a friend and she was so set on a used car from them. I tried to convince her to buy elsewhere but she just had to have it that day. As you can guess they knew this and took advantage of it.
On the contrary, I only buy older used cars - the savings on a car with some warranty isn't near as much. I've always had good luck with merely taking a car I'm considering to a mechanic to get it checked out. One day the luck will run out, but whatever that will cost will come nowhere near the amount I've saved over the years.
Dealing with a dealership is all about psychology. They are playing a psychological mind game with you when they make you wait for so long while they're in the back doing "paperwork". They want you to get antsy so you make bad decisions.
The trick to making this interaction go your way is to not play their game. If they seat you at a table and make you wait, just get up and walk away. Go start looking at another car. This will freak them the F out. My last interaction with a car dealer was hilarious. When I started playing mind games with them (walking away while they made me wait, fake-scrolling through ads on my phone, wondering out loud about the dealer across the street) they literally bent over backwards. They lowered the price on the car I wanted significantly. They offered me more than KBB trade-in value for my old car. They even offered to buy my wife and I lunch because we acted like we were going to go think it over while we ate.
It's all mind games. Don't play theirs. The dealerships tactics are not very effective if you take control. They just get a lot of practice and they know that new-car-smell is addictive.
The only winning move with the manipulative is not to play. Their games tend to waste your time and resources.
Somewhere, somebody interested in delivering customer value will sell you a quality car at a price that is respectful to all parties. Buy that one. Do note that a respectful price preserves a margin for the dealer.
This is good advice. I discovered by accident a really good technique. Just tell them you don't make any big decisions without sleeping on it. Then don't budge. Once they know they can't get you to sign that day, a lot of the tension goes out of the process. They have to switch gears and be respectful to entice you back tomorrow.
> To be fair to dealerships, they do provide important services. They offer a distribution and service network, which is vital to both manufacturers and car buyers.
Until they don't. Throwback to that time "the world's largest Chevrolet dealer"[0] went under like Jacques Cousteau[1].
Disclaimer; I run a popular youtube channel educating consumers on car buying.
Greg did a good job documenting the challenges of buying a car in today's market. Fortunately, we are starting to see a softening in consumer demand which has led to used car prices to begin to drop in some areas and for certain types of vehicles.
We expect that as automakers increase production we'll go away from markups. The timeline for that is tricky since Asian brands (Toyota and Honda especially) are struggling MUCH more than American automakers. MSRPs are rising fast too, so while dealer markups may disappear as demand weakens and supply increases, don't be surprised if you see MSRPs that are 5-10% higher year over year.
Wait times right now for hybrid vehicles are over a year. The push to PHEV and BEV will continue to be delayed due to ridiculous prices. The average transaction price for a new EV last month was north of $66,000. Not affordable.
Great insights in Greg's article. I wish we could have helped him before he embarked on the journey.
The current supply shortages made the process less bothersome for me in some ways because I didn't really expect to have much luck haggling. Wasn't perfect. "In transit" meant it wasn't built yet and I was in a bit of a hurry. (Had car but car had problems.) Doc fee was high. A couple of 50% BS sets of "factory installed options." (Though got price tacked onto my pretty generous trade-in.) Some annoying attempts to upsell but "no" worked fine. Didn't need financing.
But overall, it was a couple of visits and a few hours and I got the vehicle (Honda) in six weeks.
I hope the example of Tesla's successful direct sales model, and Ford and GM's current frustration with dealers marking up popular EVs, will result in the large auto companies lobbying to remove the protectionist laws that force the dealership model on consumers.
Unlikely -- Saturn had consumer-friendly no-hassle pricing (and vehicles) in the 1990s. That model hasn't returned.
(Also, the superlative owners' manual for my wife's Saturn was a user-friendly document designed with the end-user in mind. Never seen anything like it before or since.)
During my studies when I was overseas we had a seminar on how to buy a car in NZ. The guy was absolutely awesome, he told us about a lot of the tricks employed by dealers from subtle things like mirrors where you are supposed to park the car (you see yourself in the mirror) to things like working you with two people (it's much harder to resist 2 people arguing with you, also why you should never go by yourself). He also gave some good tips: go at certain days of the month when they are about to get new stock in, try to find the underperforming salesperson (they get away with worse deals, because the others feel sorry for them), give the impression you are planning to buy for much less than you really want, because they always try to get you over your budget.
I managed to use those tricks when I bought my first car. Managed to get it at about 40% of the sticker price (used car). Haven't been as successful since though.
> At least some automakers know this. Earlier this year, Hyundai Motor Company sent a letter to its dealerships urging them to end deceptive practices, such as advertising a low price online and then charging a much higher price when customers go into the store. The company complained that sky-high markups were "damaging our brands' long-term ability to capture new customers and retain loyal ones."
From the vehicle owner or dealership? I had the worst experience with Toyota. I don't think I'd ever buy a Toyota again. The manufacturer was like... We only make the cars and don't care what happens at the dealership.
Also what is up with dealerships and mandatory arbitration agreements? So you can't buy a car now without signing an arbitration agreement?
Readit News
Let me put it this way: you've got the entire continental US you can buy a car from and shipping a vehicle coast-to-coast usually costs under $2,000.
So, what do you think is truer? Is the market excruciatingly tight, or are there just a lot of people making bad purchases out there?
It's a bit of a drive to get there in the adjacent state, but totally worth it.
Edit: Also, we made deals for vehicles they had in stock, not custom-configured from mfgr.
I ended up leaving with the car I wanted and paid about $500 more than I wanted to but they wore me down.
I think if you buy through Costco you can avoid some of the bullshit, but you do pay more than you probably have to. It might be worth it though just to have an easier experience.
My best car buying experience has been Tesla though. Ordered on the app. Put 500 down. Got a build date. Got a notification when it was in delivery. Added my payment info. Got a time to pickup car. Drove home.
Right now, some might balk. But you know what? That salesperson cares about their quota, and if your purchases pushes them over today's goal number, they twitch. Because the inevitable next buyer tomorrow isn't going to get them over the quota they need to meet today.
And if your dealership really plays hardball? Move on to the next one. Or buy used from a place that doesn't haggle.
The way to lose this is if you want a specific year/make/model - they'll get you. If your entire attitude is "anything within that set of parameters", it's much harder for them.
Specifically: the car is only the first part, then there's extra warranties from dealership, financing, etc.
A standardized quote that gives you the price of these optional items would go a long way in making the experience smooth.
Private companies can solve the issues themselves (Carvana), but that's coming at a significant $ premium so far.
The FTC rule mentioned in the article mentions this:
> Require full upfront disclosure of costs and conditions: The proposal would require dealers to make key disclosures to consumers, including providing a true “offering price” for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees. It would also require dealers to make disclosures about optional add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms.
I'm not sure I'd ever go to a dealership again. They make things so painful, and wring as much money and stress out of you as possible. There seems to be zero benefit for the consumer.
Reading the comments here about peoples' experiences at dealerships, I kept thinking "Do I really need to move to LA? Is there any other way I can accomplish my goals?" I'm glad to see you've had success dealing with private parties. This is absolutely the way I will go when it comes time for me to bite the bullet and buy a car.
I bike to work everyday on my electric bike and run most errands by bike (doctor, haircut, groceries). While I do have a car, I only use it for trips outside of town on the weekends (plus monthly Costco runs).
I know a number of NYC and Chicago transplants who moved to LA without cars and get along fine. Pre-COVID I commuted to work by rail for several years, and occasionally take the rail to work now.
You'll probably have to pay the difference between sales tax in your current state and CA tax when you register it in CA though.
When buying used from a private seller you really can find almost anything you want at a substantial discount if your timeline is not urgent.
[1] They insisted the car was in perfect shape and passed their 87 point inspection even though it was listed as totaled due to flood damage when I ran the Carfax. Plus it had this weird thing where it was listed as garaged in New York but titled in Florida and it seemed like nothing on the report matched up. That and the VIN was obscured by the black goop they used to glue the windshield on when someone replaced it, I had to use the VIN from the door. This was back around 2006-2007, so maybe the situation has improved, but I kind of doubt it.
I would personally avoid private for cheap cars or those that transact often. As you might end up dealing with "jobbers" that is unofficial resellers.
The trick to making this interaction go your way is to not play their game. If they seat you at a table and make you wait, just get up and walk away. Go start looking at another car. This will freak them the F out. My last interaction with a car dealer was hilarious. When I started playing mind games with them (walking away while they made me wait, fake-scrolling through ads on my phone, wondering out loud about the dealer across the street) they literally bent over backwards. They lowered the price on the car I wanted significantly. They offered me more than KBB trade-in value for my old car. They even offered to buy my wife and I lunch because we acted like we were going to go think it over while we ate.
It's all mind games. Don't play theirs. The dealerships tactics are not very effective if you take control. They just get a lot of practice and they know that new-car-smell is addictive.
Somewhere, somebody interested in delivering customer value will sell you a quality car at a price that is respectful to all parties. Buy that one. Do note that a respectful price preserves a margin for the dealer.
Until they don't. Throwback to that time "the world's largest Chevrolet dealer"[0] went under like Jacques Cousteau[1].
[0] https://web.archive.org/web/20070202025849/http://www.billhe...
[1] https://web.archive.org/web/20170901203212/http://www.tbo.co...
Greg did a good job documenting the challenges of buying a car in today's market. Fortunately, we are starting to see a softening in consumer demand which has led to used car prices to begin to drop in some areas and for certain types of vehicles.
We expect that as automakers increase production we'll go away from markups. The timeline for that is tricky since Asian brands (Toyota and Honda especially) are struggling MUCH more than American automakers. MSRPs are rising fast too, so while dealer markups may disappear as demand weakens and supply increases, don't be surprised if you see MSRPs that are 5-10% higher year over year.
Wait times right now for hybrid vehicles are over a year. The push to PHEV and BEV will continue to be delayed due to ridiculous prices. The average transaction price for a new EV last month was north of $66,000. Not affordable.
Great insights in Greg's article. I wish we could have helped him before he embarked on the journey.
But overall, it was a couple of visits and a few hours and I got the vehicle (Honda) in six weeks.
(Also, the superlative owners' manual for my wife's Saturn was a user-friendly document designed with the end-user in mind. Never seen anything like it before or since.)
I managed to use those tricks when I bought my first car. Managed to get it at about 40% of the sticker price (used car). Haven't been as successful since though.
Also what is up with dealerships and mandatory arbitration agreements? So you can't buy a car now without signing an arbitration agreement?