I agreed to a price via email on the assumption the car was in good shape. I didn't want to drive 200 miles to haggle and told them that. Once we had a price, I drove to the dealership and knocked another $500 off for three door dings they didn't tell me about. Fixed for $350 and I'm very happy.

 

Basically I start at NADA Clean Trade-In value then subtract for any items that will require a significant amount of money (e.g., new tires). I figure it's not my business how much they paid for the car (less or more) but that's what a car is worth if I need to sell it to a CarMax or trade it in at a dealer. However, I will go higher than that if the car is exceptionally nice and exactly what I am looking for. Private sellers I just try to be honest with. Dealers I enjoy beating them down until the beg me to drive the car off the lot and leave them alone.

 

i look at the s and say SOFFFFTTTT TOPPPP WEARRRRR, LOOK AT ALL THOSE RIPS, OH MAN IMA GET WET WHEN I DRIVE IN THE RAIN. and get off a good decent amount haha.

 

To OP: Interesting post - I think your method of hard ball tactics works on cars that are sub-par or low demand or otherwise hard to sell. Of course if it works for you on that particular day you might have caught them on an off-day too so kudos if successful.

I've bought many cars in my lifetime and I can tell you sometimes just being honest is the best policy. If the dealer truly has a gem of a car, they won't be eager to sell to you and you will just walk out with that wasted cashier's check. I think printing those checks out is funny but not needed, must bring your checkbook and be polite / straight-forward.

Every car deal has a story behind it so what works in your area may not work in a hotly contested region. You may be paying cash, the next guy might need financing, the 3rd guy might want to pay a higher price since dealer will take his junker in trade. You seem to forget dealers offer some benefits for many such as the financing, trade-in, or warranty that may/may not be important to you but others find it worthwhile.

It's all about your final goal and set of circumstances.

Most of the cars I buy are private party but I have bought a few high demand cars from dealers and most of those are at MSRP and non-negotiable. Of course if you are buying a Camry then you have some more wiggle room. We recently bought a Lexus CT200h and that is a pretty popular car. We ended up paying invoice for the car but had to travel (incur expenses) to get it.


Good post though

 

just bring a duffel bag full of cash....exit wounds style

 

I'm surprised that your responses to the dealer(s) doesn't sour the whole deal. I understand how it can work but you are a bit off-puting right up front. Is that part of the tactic? BTW, I've been walking around to dealers in SF bay with $20k in cash and many have seen it, none of which cared. I've even been told by a few that cash isn't significant to them because once a loan is secured, they are paid up front regardless.

I went to this dealer with an 06 Silverstone for $20k. I pointed out scratches (beyond buffing out), tearing top, and 6" of water in the trunk and mentioned these were all significant hits to the value of the car. He said the water was news to him and it would get fixed ASAP regardless, what's my offer. I told him that I had cash to the sum of $17k and that was where I thought it should be. He said he wasn't going to lie, not a lot of people come looking at these cars because they are a niche market but that he couldn't take my offer. I left it at that and gave him my info, and he did call me 3 times, but never with any interest in my $17k offer.

Another dealer down in L.A. was asking $20k for an 06 New Formula Red. I emailed him that I'd be willing to come see the car if he could do 20k out the door. Figured he could work the paperwork any way he wanted but that $2k under asking wasn't so big of a deal for him. He emailed back and said he couldn't do it due to market demands. That car is still on Craigslist ~6 weeks later down to $19.2k and he still hasn't emailed me back. I just don't think these guys care about cash or even negotiations as much as they should. Who knows.

 

jguthrie: You are absolutely right, cash to the dealer means CRAP - my friend is the finance manager at X dealership and he is the most important guy there, you know why?

Cuz he can make a $15k sale into a huge profit margin by financing. Dealers WANT YOU TO FINANCE, clients who pay cash have little value to them and are the worst type of buyers they want.

In a private party sale, CASH is king but not at a dealership. It's funny how news is so mis-understood these days. If you look at post above, regions have a big part in the deal. In east coast and certain parts of the US, s2000's have much less value than on the west coast. As you have found out dealers don't care about your cash, they have plenty of buyers and rather wait for some profit than a loss.

 

It's true that some dealers stand rather firm. I had some of those too in the past.
Especially at some point if the buyer act needy or desperate
Like I said before, for large car dealerships (and even some small ones), clearing inventory isn't their one of their priorities, and hence they can just leave the vehicle out for years just to scout for the right buyer with high price

But it's funny how a dealership will post a price of 19.2K but didn't want to sell it to you when you offered 20K
Probably forgotten about you or lost your phone

The salesperson doesn't really play a big part of this most of the time, since the manager seems to step in when a buyer like this step in
Different car dealerships have different strategies in terms of the pricing: some like to lower their prices to appeal to the consumers; some like to put right at book value; while some like to put above the book value (this is a psychology practice, consumers tend to think higher prices = better quality and condition. Which of course is not always the case)

The point of "lowball" isn't really to achieve that particular price
If you throw in your "target" price right from the start, chances are you won't get anywhere close to your target price since the dealership will demand higher (unless it's a target price that will make a huge profit for the dealership right from the start, they'll usually say something like "I talked with my manager and we think that your offer is acceptable".)
My goal is just to go back and forth on the price with the dealer, and hoping this back and forth negotiation will converge close to my "target" price

 

I should have also mention about something important
Telling the dealer you have a certified cheque with their company's name on it implies a couple things:

1) You're most likely serious about the purchase
2) Not just any purchase.. rather an immediate one
3) This immediate purchase can throw some sales/managers off guard. Especially if they have a quota/amount to reach in a given month/year, if they're worried about not reaching it, they'll be more willing to work things with you
4) Usually there's a time frame where the full amount has to be paid, and suppose you decide to purchase the vehicle, they KNOW that they'll receive $$ really soon

Some of you are saying how showing cash up front isn't useful since everyone will be paying in full amount for used vehicle anyways
But cash is cash afterall, most companies would like to receive it sooner the better.
Of course not all companies are the same, but it doesn't hurt to tell them you have the cash, and you can pay them real quick if they could work out a deal with you

 

I take a very different approach to car buying that I believe is worth noting. Here are two main points that I believe help me get great deals and save me lots of time

1. Contrary to what has been said in earlier posts, I find it easier to negotiate on rare or hard to find enthusiasts cars. The key point to remember here is that rare cars have rare buyers. What may be interesting to you or me (manual trans, no soft top (CR), powerful engine) could actually be a drawback for the typical auto buyer. so for instance, I may want a manual Cadillac CTS-V wagon with the recaro seat option, but a car like that might have very few people interested in it. Every car I have bought has been limited/rare. The S2000 is actually the most common run of the mill car I have ever owned. Dealers try to use this as a selling point. "oh this car is so rare and hard to find, you won't find another one like it." I respond with, "buyers interested in this car are an even greater rarity." I can scoop up a rare car cheap, because many dealerships won't risk having it sit on the lot for a long while.

2. Work out your purchase price before you get there. I can save myself lots of time and money by simply calling the internet sales manager or department and having them describe the car and answer questions over the phone. I'll have them take it for a drive and let me know how it runs, They can do a visual inspection and tell me the flaws over the phone and they can email me pictures if needed. I don't go to dealerships to negotiate, I go to dealerships to pick up my new car. Once we agree on a price I show up and test drive and inspect the car. Any flaws or problems that were missed during my thorough over the phone process can be used as a point of negotiation to further reduce the price. I typically spend under an hour at the dealership, only deal with one person, and avoid the typical sales guy run around. I absolutely hate wasting my time with a salesman who runs back and forth to some supervisor. It is a waste of time to haggle with a sales guy to only have him call over his manager to haggle with you some more.

I have used these points along with a few others to negotiate all of my car purchases, and every vehicle has been bought cheap enough that I can put lots of miles on them and sell them a few years later and break even or make a slight profit.