New car purchase negotiations - Has anyone manage to haggle a decent chunk off the RRP?

Forums › Transport (cars, bikes and boats) › New car purchase negotiations - Has anyone manage to haggle a decent chunk off the RRP?

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#2642798 27-Jan-2021 08:24

BlinkyBill:

mudguard:
... They can't offer two prices depending on how you pay. You are perfectly entitled to negotiate a low price for cash then turn around and say actually I'll take the interest free deal at that price.

Of course they can. If you are negotiating on the basis of cash, then you aren’t negotiating on the basis of interest-free (a.k.a. 0% interest). You can try and take the cash price on 0% interest you are changing the basis for negotiation. Good luck, it might work or it might not.

From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

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BlinkyBill

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#2642814 27-Jan-2021 08:52

turtleattacks:

Cash at the end of the day, will always get you a better deal.

one thing is certain ... dealers are better negotiators than you or me, and always get the better end of the deal.

turtleattacks

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#2642816 27-Jan-2021 08:53

BlinkyBill:

turtleattacks:

Cash at the end of the day, will always get you a better deal.

one thing is certain ... dealers are better negotiators than you or me, and always get the better end of the deal.

Damn right, they do it day in day out and have more 'information' up their sleeves. (i.e. cost price, possible rebates).

Effectively, you are going in blind apart from going in with the RRP.

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Andib

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#2642827 27-Jan-2021 09:05

turtleattacks:

From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

Dealer financing is a pretty interesting thing, Car yards have a company that does their “floor planning”, which essentially means they can lend X amount based on their floor space and how risky the finance company think their customers are.
Based on that calculation they then get a buy rate (around 5/6% for a decent sized dealer in a good area) which they then will sell to customers at 7-9%. They can then use that margin to offer 0% finance (and build the cost of their buy rate into the sale price, aka not discount the rrp as much) or be negotiable on deal they offer either by lowering the sales price of the car, giving you a lower interest rate or a mix of both. Due to how easy it now is to compare competing dealers selling the identical cars throughout the country, dealers will often list decent discounts off RRP to "have the best price" and get to you in the door in the hopes they can then up sell you on the model, accessories or finance (the latter two are where there are decent profits)

So while it may "cost" them more to sell a car on finance due to the extra work involved, They make up for it in their margin / commission from the finance company

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Bung

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#2642841 27-Jan-2021 09:25

turtleattacks:
From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

Unless the franchise was having to contribute to the cost of 0% interest financing, taking cash would mean they don't get the commission from the finance co and while the customer is filling out all the paperwork it's a good time to upsell. Why would car dealers be any different to appliance salesmen, they sell finance with shiny toys.

tchart

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#2642860 27-Jan-2021 10:12

Bung:
turtleattacks:

From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

Unless the franchise was having to contribute to the cost of 0% interest financing, taking cash would mean they don't get the commission from the finance co and while the customer is filling out all the paperwork it's a good time to upsell. Why would car dealers be any different to appliance salesmen, they sell finance with shiny toys.

Yep, Im told the same, they make more money from selling on finance as they get a cut.

You shouldnt tell them you are paying cash until you have negotiated a better price.

Batman

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#2642906 27-Jan-2021 10:41

turtleattacks:

From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

As my son says, you're gullible!

Rule no 1.

Never believe anything a sales person says.

Rule no 2. If a sales person is charming convincing and full of knowledge refer rule no 1.

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BlinkyBill

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#2642913 27-Jan-2021 10:52

Batman:
turtleattacks:

From speaking to multiple dealers, I've been told that it actually cost them more to sell a car on finance, whether if there's an interest deal attach to it or not.

Cash at the end of the day, will always get you a better deal.

As my son says, you're gullible!

Rule no 1.

Never believe anything a sales person says.

Rule no 2. If a sales person is charming convincing and full of knowledge refer rule no 1.

A bit like believing the best time to do a deal is at the end of the month. The best time to do a deal is today.

kobiak

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#2642917 27-Jan-2021 11:07

BlinkyBill:

A bit like believing the best time to do a deal is at the end of the month. The best time to do a deal is today.

hmz. the last car I purchased (second hand):

- started searching around mid november, all dealers - firm on price
- from mid december the same dealers started texting me offers with 5-10% discount
- by the end of december the same dealers offered extras to discounts
- mid january same dealers, same cars offered 15-20% off, I counter offered one car and got 25% off initial mid november price + new tyres, cheap but still :)

another 2 dealers called me around end january and asked if i'm still interested. one told me off when I told him I purchased another car. whaaaat????

helping others at evgenyk.nz

BlinkyBill

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#2642919 27-Jan-2021 11:10

I’m referring to new cars.

Hunter

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#2642942 27-Jan-2021 11:36

Batman is so correct,
Rule no 1. Never believe anything a sales person says.
Rule no 2. If a sales person is charming convincing and full of knowledge refer rule no 1.

We manage to talk from 69k to 50k.
Am sure they will go lower, but I ran out of patience and voice.
My work, manage to get from 49k to 22k
Tier 2 I think.
Rather not fair to normal person.
Toyota and Honda fair price system works much better

Turtleattacks, talk more, trust me they will come down much much more than what they say

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#2642950 27-Jan-2021 11:48

When I was selling cars (a long, long time ago in a galaxy far, far away) we could sometimes do what appeared to be a cost price sale, earning zero GP, if the finance was substantially profitable.

If you're not paying 100% cash, then the sticker price rapidly loses relevance. The actual price becomes your trade-in, maybe some cash & $X per month for X years. The actual retail price number is merely an indicator which the other numbers hang from. What does the selling price matter when the deal gives you the vehicle you want & fits your budget?

It's a matter of identitying the buying motivations of the customer, then working with those to make them feel that they have a great deal. Some want that sticker price down, others want their trade-in to be well recognised & so on, but when it comes to finance, the monthly difference didn't really matter so long as it fitted their budget - & as such was a vital part of buyer qualification.

Mr Hardnut Negotiator grinds the window price down, shakes hands & signs to own - then gets financed with an extra 2% interest rate plus income insurance & mechanical warranty added in - suddenly the zero profit business is looking rather lucrative.

The finance company would take the contract & pay us a discounted proportion of the total profit - instead of $10,000 over 4 years, we'd get paid $6,000 up front - which justified the low to zero GP initial sale.

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ripjack

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#2647171 4-Feb-2021 16:01

billgates:
We bought 2020 Kia Seltos EX when it was first launched in NZ for $32800. RRP for this model is $38k

I'm interested in getting a Sportage... any tips for a noob at negotiations?

The 2020 LX model is currently being advertised at $30k regular price, and the 2021 model is also "on special" @ $30k.

Any tips on how I can get a deal on the 2020 model? And how much should I reasonably expect to get off?

Thanks!

mattwnz

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#2647181 4-Feb-2021 16:24

BlinkyBill:

turtleattacks:

Cash at the end of the day, will always get you a better deal.

one thing is certain ... dealers are better negotiators than you or me, and always get the better end of the deal.

That is true, because obviously they are trained and do this sort of thing every day. But a car buyer also doesn't have to buy from that dealer , whereas dealers do have to sell cars. There are all sorts of strategies for buyers and some youtube videos on them. Consumers negotiating price isn't something that is discussed very much, or taught in schools.

mattwnz

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#2647184 4-Feb-2021 16:28

Hunter:
Toyota and Honda fair price system works much better

It probably works better for people not comfortable negotiating.

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