Buying new - am I a fool to pay sticker price? How do I negotiate?

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#2368201 4-Dec-2019 16:17

Which model of the Kia are you looking at?

I went and saw our local Kia dealership, did a test drive, got a price from them. I mentioned that I will be test driving other models from other manufacturers which i have been doing. Rang back the Kia dealership today afternoon as that is the car i want to go with after testing multiple Toyota's, Kia, Honda and Mitsubishi. The sales rep at local Kia said they cannot do any better price than what he said as it's $6k off the advertised price on Kia website already which is just plain marketing. The price of Kia cars you see on their website is inflated by $5k to $6k on all their cars over $30k range. When you go into the dealership, they will tell you the $36k car we can do for $31k or $30k which is it's normal price and will always stay it's normal price.

Anyway, I offered the local Kia dealer $1750 less ($1250 ORC they want and $500 less for the base price of new vehicle) than what he wants which is same as another nearest regional dealer (Auckland) I rang randomly to inquire. I then sent an email to all Auckland dealers individually and offered my price with my mobile number and to call back if they can match it. One Auckland dealer came back with being $2k more expensive than local and another Auckland dealer. Another Auckland dealer came back and offered what I wanted and said there is a wait on the colour of what you want as it's a new model car and they are all sold out. I said I can wait for 2 months, do the paperwork and get a Year 2020 registration. Local dealer incidentally rang me back after 10 minutes and said best they can do is waive off the ORC and I will have to take the colour of the single piece they have in the yard. If I want my colour, they will charge full price incl ORC and I will have to wait for it arrive. I said all sorted with Auckland dealer as he is offering what i want which is $500 cheaper than what you are now offering and said thank you. Local dealer rang me back within 2 minutes and said they will match the deal and I said done.

Do not be afraid to negotiate and play the dealers with each other. As someone mentioned above, they hate loosing a customer to another dealer of the same brand more so than a competitors brand.

Do whatever you want to do man.

Grunta47

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#2368203 4-Dec-2019 16:19

1 - Always look to purchase the run out model.....unless you really need the latest/greatest. Buying at this time of the year there will be a few more options on runouts and dealers will offer extra discount/incentives to get rid of older stock, even from the warehouse.

2 - Buy towards the end of the month, as car dealers are usually trying to make their numbers look better (they only worry about the current month, not the next one) so are more likely to give bigger/better deals.

Both tips were given to me by a car dealer.....who just happened to be at Toyota well before they changed their selling model.

Obviously the first item doesn't work for 2nd hand cars:-)

Good luck!!

FineWine

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#2368208 4-Dec-2019 16:28

We purchased a brand new 2019 white Kia Sportage 2.0L EX Urban incl ORC in March 2019 for $36,535 including accessories of; weather shields, small pot of white touch-up paint, mats & rear bumper protector from Kia Tauranga. With trade-in of a 2005 Suzki Aerio $4,285 ended up with a change over of $32,250. We plan on keeping this vehicle for 8-10 years till my partner retires then we will be shopping again.

Kia are now offering the same vehicle for $35,990 from $39,990. But the Sportage really has not changed for quite a few years now so is due for a radical overhaul.

Have a look at this Topic - Advice in buying SUV

Some dealers can be a bit more sympathetic towards the end of month IF they have met their monthly targets.

I do agree that if you can get an ex demo go for it but if you are going to keep the vehicle longer than 5-6 years then haggle on for a new vehicle.

Good luck.

Whilst the difficult we can do immediately, the impossible takes a bit longer. However, miracles you will have to wait for.

allio

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#2368209 4-Dec-2019 16:30

Thanks heaps for the advice. Honestly really, really helpful - I have felt lost throughout this whole experience.

In response to a couple of questions:

We're looking to trade in our existing cars (two NZ new mid-late 2000s hatchbacks) which are probably worth about $5k each on the open market. I've been led to expect around $3500-4000 per car by the dealers we've spoken to (except the Toyota guy - when I said $4k to him, he said "for both?") Not sure if we can be bothered with private sales (both cars have a few minor niggles that I don't have the energy to fix) but it might make sense to just sell to Turners and remove that whole aspect of the transaction.

We were looking at the Kia Seltos, which we like in basically every respect except for the considerably smaller boot than the RAV4.

We are super open to ex-demos but were told by Toyota that these basically sell as soon as they become available, which I can believe.

I have a feeling that it's easier to get a sizable discount on a higher-end model than on a base or base+1 model, which is what we're looking at - but will definitely try my luck with the non-Honda/Toyota dealerships.

nate

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#2368216 4-Dec-2019 16:40

One of our subsidiaries buys and disposes of large fleets of new vehicles on a regular basis. My two bits of advice:

Don't trade your cars into the dealer or use an auction house. Tidy them up yourself and put them up on TradeMe. You will get a much better return (unless you can't be bothered, then use Turners, however be prepared for a lowball offer).

Negotiate with the dealer around warranties and service plans. Wife bought a new Mazda3 last year, and it has a 5 year warranty and 5 years of free servicing. Can't complain.

Good luck.

billgates

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#2368217 4-Dec-2019 16:42

@allio - Kia Seltos is what we have selected as well (EX model). The local dealership and all other dealership straight up said 0% negotiation on the LX model ($26k + ORC) and the LX+ ($30k + ORC). If you were offered the LX for $31k + ORC, I can confirm that atleast 2 dealerships offer it for $30k + ORC.

Do whatever you want to do man.

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#2368221 4-Dec-2019 16:48

Nikras:

Firstly, you're right to say, NEVER PAY STICKER PRICE!!

However, Toyota and Honda have done away with Price Negotiations.

They introduced a "No Haggle" policy to their prices, so it becomes take it or leave it.

https://www.stuff.co.nz/business/102774053/car-buyers-urged-to-do-homework-due-to-toyotas-no-haggle-policy

To me, this is great! Because it sucks to haggle, and no one like to do it. They are doing very well with this too! Their cars really are selling like hotcakes. The brand new Toyota Rav4 is sold out in Dunedin and you won't be able to get one until June next year (so i've heard).

However, for other car companies who doesn't have this policy. You can haggle as much as you want.

I'd recommend looking up John Cadogan from AutoExpert.com.au. He's in Aus but you can apply most of his policies here too.

He absolutely hates dealership sticker prices and has a video somewhere to guide you into haggling.

In my own experience, I bought a Hyundai Tucson brand new with a sticker price of 52k at the price of 42.5k.

My friend was also able to do the same. We haggled by being disinterested in the price and mentioned we could easily swap to a different dealer.

Dealers hate you going to another dealer... even if they're from the same company!

Main takeaway when haggling is to not be afraid to walk away.

Other pro tips: Don't cave and buy extras. i.e. extended warranty / paint protection / dealership insurance (they suck)

Make sure when researching a car too, don't just google how good it is, make sure you google the problems too. Every car has them, and some are more prominent than others. I regretted buying my 2017 Tucson. The DCT Gearbox was horrendous, it kept slipping between gear 1-2. Even after going back for warranty (changed clutch), it still happened. :( I got it swapped for a RAV4 instead. Now im happy as can be.

Good luck to you!

it's demand and supply. i had successfully haggled many times with dealers tripping over backwards to beat each other, when sales are low. there are times where you ask for a discount and they slam the door in front of you. (different dealers, different times). but if you want to haggle dress nicely but not too nicely. if you look overly rich you won't succeed but if you look homeless you won't be entertained. it's interesting.

mortonman

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#2368225 4-Dec-2019 17:00

Beware excessive On Road Costs (ORC) when buying new. Sometimes they will negotiate the price then add ORC. VW wanted $1250 for a new allspace. A tank of gas and one years rego only comes to $250! I ended up buying one of the demonstrators to save on both the new price and the ORC. Still got servicing / warranty etc included in my deal. Only got my second choice colour but still worth it to save ~$5-6K over new.

mattwnz

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#2368253 4-Dec-2019 17:35

empacher48:

You won’t get a discount on a new Toyota or Honda as that is the way they sell them now. The price is what head office tells the dealer sells them for and there is no negotiating. When Toyota began this method the prices on their vehicles fell by 5 to 10% across the board.

For other manufacturers you’ll be able haggle, not just on price but extras like servicing and accessories. The last vehicle I bought we got 8% off, plus three years or 100,000km servicing, towbar, seat covers, floor mats, spoiler and bonnet protector.

Good luck!

5-10% drop doesn't make up for the discount I got which was close to 20% at a farmers field day on a RAV 4. I wouldn't buy a new vehicle from a dealer where I couldn't negotiate on the price, as that is the way things work in NZ and OZ when buying a house or car. This new way of pricing perhaps benefits those who don't like to haggle. When I negotiate on price, I avoid any 'freebies' that they may want to throw in, as that just complicates things, and you can often buy the extras far cheaper elsewhere. .Things like car mats and servicing are normally provided with the car these days. When I negotiate I base it on the lowest price that another dealer is selling the car for. So in the case of field day specials, that was the field day price one dealer was offering, so I just asked a more local dealer if they would match that price, and they would. They don't seem to do field day pricing as much these days, at least not with the really good discounts.

mattwnz

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#2368255 4-Dec-2019 17:37

mortonman:

Beware excessive On Road Costs (ORC) when buying new. Sometimes they will negotiate the price then add ORC. VW wanted $1250 for a new allspace. A tank of gas and one years rego only comes to $250! I ended up buying one of the demonstrators to save on both the new price and the ORC. Still got servicing / warranty etc included in my deal. Only got my second choice colour but still worth it to save ~$5-6K over new.

Yeap, the price you negotiate should be the drive away price, including all ORC.

mattwnz

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#2368299 4-Dec-2019 17:42

allio:

For context, we're looking at a base model 2020 RAV4, which has been out since April 2019 - I know RAV4s consistently sell well but it's more than half way through its life cycle now.

If you are looking at the RAV4, why not look at the Mazda CX5?

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#2368316 4-Dec-2019 18:49

Everyone has covered Toyota and Honda plus extras.

We recently bought a new Golf and in Auckland its a buyers market given there are 3 VW dealers all within a 10km radius, and found the following:

1) Showing up in person in important - they are all reluctant to discuss prices over the phone and shows you're more serious.

2) Make it clear you're not in a hurry and are actively trying other cars/dealers. You hold the power.

3) You will have less haggle power if you trade in or buy on finance (through the dealer) - We made it clear we were cash buyers.

4) Don't limit yourself to your home city - if you're open to going to another city to buy you may get a better deal.

5) Ex demos are a great option if you're willing to wait for the right car (colour/kms) to come along.

6) There is ALWAYS a sale.

7) DON'T FEEL GUILTY HAGGLING! They won't sell it for a loss, and if they do, your gain.

8) I forgot this - Targets. Go in on the last weekend of the month and twist their arm.

Grunta47

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#2368320 4-Dec-2019 18:52

FineWine:

Some dealers can be a bit more sympathetic towards the end of month IF they have met their monthly targets.

I do agree that if you can get an ex demo go for it but if you are going to keep the vehicle longer than 5-6 years then haggle on for a new vehicle.

Good luck.

I think you have misunderstood my post as these comments seem to be directed at mine.

2008 - Toyota Corolla Sedan run out, advertised from $37990 down to $31990.00. Called in 3 days before the end of the month and took an interest. Dealer chased me for 2 days and then 2 hours before closing on last day of month he offered me $29000.00 as long as we sign that night. I took the deal and it was him who told me the 2 items I noted. This was a new car, not an ex demo and arrived with 20km on the clock

2017 - Nissan Qasquai run out and the same thing. An extra sweetener of around $3k discount on the one sitting in the yard, but the wife didn’t like the colour so got one for the same deal. It arrives with 20km on the clock.

2018 - Hyundai Santa Fe run out. The Hyundai dealer didn’t like losing out to Nissan in 2017 and gave me an extra deal for end of month. There was already the $16k discount and I got another $8k. Brand new though with 100km on the clock.

All were the latest models but on runout sales as the new model was due in 1-2 months.

For the Toyota dealer he had 2 targets - sales volume and profit. He had made his profit for the month so used this to offset the discount to me to make his numbers target.

cheers

mattwnz

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#2368325 4-Dec-2019 19:04

Nate001:

7) DON'T FEEL GUILTY HAGGLING! They won't sell it for a loss, and if they do, your gain.

It is also in our culture to haggle on price when it comes to high ticket items, including Houses, cars, and TVs and whiteware. Unlike some other countries, we don't tend to haggle on lower value products. I have also found it good to put the decision for the maximum amount you can spend, on someone who isn't actually present at the negotiation. eg. Your wife may set you a strict limit that you can't go over, but if she is not at the meeting, then she can't be pressured into spending more than you want to spend.

jonathan18

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#2368351 4-Dec-2019 19:58

With some car brands having such great servicing and warranties, one doesn’t need to stick to only demos, but can still be confident purchasing privately.

I’m thinking Mazda in particular - someone above mentioned they now come with five year warranty and servicing, and this is transferable with a private sale. I bought my car privately when it was 12 months old, and enjoyed two years of free servicing (offered three years total at that point). It was still in perfect condition at the time, and provided a significant saving over buying either new or a dealer model.

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