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

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allio

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#261575 4-Dec-2019 15:06

Due to an unexpected windfall and a need for a bigger car, my wife and I are looking at buying new. Not dead set on it and we may end up going for a 1-2 year old second hand vehicle with low Ks, but new is in the mix for the first time in our lives.

I've always understood that you'd be an absolute fool to pay sticker price for a new car and that you could expect a discount in the realm of 5-10%, but that's not based on any actual experience, and our initial inquiries have left me unsure what to do. Kia offered a $5k discount on a $36k car without us even asking, while Toyota seemed entirely unresponsive. When I mentioned that we have a fixed cash budget and can't quite meet the sticker price (true), they just suggested we get finance to make up the difference. The impression Toyota gave was very much that they sold new cars about as fast as they arrived, and the price is the price - take it or leave it. But of course they would say that...

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.

Those of you with more experience buying new cars, can you give me some tips? How realistic are my expectations of a $3-4k discount on a mid-$30ks new car? If so, how do I ask for it - just go in and say this is what I'm willing to pay, end of story?

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#2368154 4-Dec-2019 15:14

Toyota operate "no haggle" policy now across the board - so yep, you pay the sticker price.

empacher48

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#2368155 4-Dec-2019 15:15

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!

allio

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#2368156 4-Dec-2019 15:16

chevrolux:

Toyota operate "no haggle" policy now across the board - so yep, you pay the sticker price.

I wondered about that. What about other brands?

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!

Honda and Toyota were indeed the two manufacturers we were most interested in. Might be wasting our time in that case.

Thanks for that example - that's a big help.

tripper1000

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#2368157 4-Dec-2019 15:17

Toyota won't "discount" because they changed to new system for selling cars to cut out the sales-yard B.S and make it more like a shop - the price you see is their best price and that is it. No inflating the price to rip-off meek customers or discounting back to normal to make hard-nose customers feel like they got a deal.

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xpd

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#2368158 4-Dec-2019 15:17

My wife loves haggling, and just bounced two different dealers pricing between them until one stopped - and even tho they stopped dropping the price, they threw in a premium stereo instead of the standard.

But as mentioned above, may find theyre wise to that now and what you see is it - but even then, without dropping the price, try to get them to add things such as WOF's, services, etc. "if it came with 5 lots of servicing you'd have a deal...."

XPD / Gavin

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dclegg

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#2368162 4-Dec-2019 15:22

Aside: Ex-demos may be a good fit for you. We purchased an ex-demo Mazda 3 a few years ago. It had 70KMs on the clock (nope, not missing a few zeros there), and it was treated as a new vehicle in every respect, except we had a few thousand shaved of the new vehicle price. This included the standard new car warranty and free servicing regime.

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wellygary

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#2368164 4-Dec-2019 15:26

tripper1000:

Toyota won't "discount" because they changed to new system for selling cars to cut out the sales-yard B.S and make it more like a shop - the price you see is their best price and that is it. No inflating the price to rip-off meek customers or discounting back to normal to make hard-nose customers feel like they got a deal.

Link 1 - Stuff

Link 2 - MTA

Merc in Australia have just gone the same way....

https://www.news.com.au/technology/innovation/motoring/motoring-news/mercedes-new-sales-loophole-to-prevent-dealer-ripoffs/news-story/b917e7e03488fe538ae32393b505d9de

More and more marques are likely to go this way as

1) They want to make buying a new car more attractive to "non traditional" buyers AKA women, youth etc,

2) They can see that on-line cars sales are coming eventually (Tesla etc) so taking the dealers price variability out of the equation is the first step to eventually moving the transaction on line in the future..

Nikras

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#2368165 4-Dec-2019 15:28

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!

meesham

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#2368166 4-Dec-2019 15:29

I bought a new CR-V last year, while Honda won't hassle on the sale price of your new vehicle, they'll definitely negotiate on the trade in value of your old vehicle as well as accessories (I got window tinting thrown in).

Hunter

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#2368169 4-Dec-2019 15:38

As per most post says, Toyota and Honda no haggle price.

As was explained to me after I just about punch out the lights on the sales person when he would not bulge

Reasoning is that Tier 1 customer can get some 50% discount
It becomes un-fair to all other customers when comes to selling.
Here you are trying to sell a 48k car at 20k and a Tier 1 at 24k sells it at 8k

Even suppose free stuff like carpet liner, tow bars, fire extinguisher, first aid kits and boot liner
are counted as a "Discount" so not allow.

I like that concept, as is fair to everybody
Since you have a option, try out buying a new car
At least just for the experience of saying that you have driven a new car out of showroom

alasta

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#2368180 4-Dec-2019 15:46

Are you planning to trade in your existing vehicle?

One strategy is to get them to add a bit extra to your trade-in value, but first you need to make sure you understand what your trade-in is really worth. Most people over-estimate the true market value of their trade-in.

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wellygary

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#2368183 4-Dec-2019 15:51

alasta:

Are you planning to trade in your existing vehicle?

One strategy is to get them to add a bit extra to your trade-in value, but first you need to make sure you understand what your trade-in is really worth. Most people over-estimate the true market value of their trade-in.

Unless your trade is less than 3 years old and you have had it from new, the chances are you will likely get a better price on TM or at Auction than what the dealer will give you.. ( esp if its a different brand)

As you say, 2nd hand cars aren't worth much these days

duckDecoy

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#2368187 4-Dec-2019 16:02

chevrolux:

Toyota operate "no haggle" policy now across the board - so yep, you pay the sticker price.

What this means in reality is that the haggling has shifted to the price of the tradein

SheriffNZ

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#2368190 4-Dec-2019 16:04

Nikras:

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

I was looking at cars last year. I ended up buying new from a dealer in Wgtn, got it shipped to the dealer in Chch (from the manufacturers national storage facility in Auckland). The dealer in Chch was offering second hand cars with 20k on the clock at the same price I paid out of the dealer in Wgtn for a new one.

The dealer in Chch was actually ok to deal with as they had to put the accessories on. Still - behind the scene they were probably seething.

ajobbins

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#2368194 4-Dec-2019 16:07

alasta:

Are you planning to trade in your existing vehicle?

One strategy is to get them to add a bit extra to your trade-in value, but first you need to make sure you understand what your trade-in is really worth. Most people over-estimate the true market value of their trade-in.

The advice i've seen on this (and it's the same if you're buying new or 2nd hand from a dealer), is don't disclose you have a trade in until after you have settled on a price for the new car, otherwise they are likley to add value on your trade in, but make it back up (and more) on a lower discount on the new car. People are impressed with the trade in amount (generally expecting it to be very low), and then overlook the lower discount they then get on the new car.

Other than that - shop around. If there are several dealers where you are that sell the same make of cars, play their quotes off each other.

@nate may have some advice on if it's possible to tap into fleet discounts

Twitter: ajobbins

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