How to Avoid Driving a Hard Bargain : Consumers: Car buyers who dread negotiating with dealers can turn to brokers, bidding services and professional buyers.
Many car buyers would rather gargle castor oil than negotiate with auto dealers.
“Twenty-five years ago most people who bought new cars were geared toward price negotiations, a horse-trading approach,” says Rick Popely, senior auto editor for Consumer Guide Magazine. “Most consumers today are not inclined to do that. They feel intimidated by the dealership.”
“It’s because we’re matching wits with a seasoned professional negotiator,” says Jack Gillis, author of The Car Book 1993, a guide to car buying. “Most consumers aren’t good negotiators, and they hate the process.”
Aware that many buyers tremble when they enter show rooms, dealers have tried to reduce the pressure to buy.
“Some dealers will pamper you to death,” says Ted Orme, spokesman for the National Automobile Dealers Assn. “They will offer exquisite treatment in the show room and the service lanes.
“And if you’re out shopping and don’t like the experience, go to the next dealer. There is someone who will sell you a car in a way you’re comfortable with. We are constantly changing. It’s hard to convince people of that. But it’s a big ship. It doesn’t turn overnight.”
Meanwhile, dealers and consumer advocates have developed alternate ways to buy cars. Some arm consumers with new information such as the real price the dealer paid for a car. Some use intermediaries who secure reduced prices through volume buying. Some provide a fixed price and no negotiation with the dealer.
Here are several ways to buy a car that minimize or avoid horse trading with salespeople:
Use a Broker
Brokers buy cars from dealers at a volume rate and deliver the car to the consumer, who can avoid the dealer until the car needs service.
Critics say that because the broker’s fee is part of the sale price, the buyer might negotiate a better deal independently.
Get a Fleet Sale Price
Membership stores such as Fedco, the Automobile Club of Southern California and many credit unions refer members to car dealers for a fleet-sale price based on volume sales.
Fedco charges a $10 lifetime membership fee. After a referral from the store, a buyer makes an appointment with a designated salesperson at the dealer, usually someone who works in fleet sales, and who makes the deal for the fleet price. (Other sales people, unaware of the referral, may not offer the bargain price.)
“If your credit union has a program by which they buy cars from dealers at $100 over dealer cost, those are great,” says Gillis. “The only downside is sometimes dealers will limit the number of autos they will sell for $100 over cost.”
Use a Competitive Bidding Service
Car Bargains, a Washington-based, nonprofit consumer organization, operates nationally. It sends customers at least five competitive bids from local dealers for the car they want.
It also provides information on reasonably priced car loans and extended-service contracts.
The service refunds its $135 fee to anyone who buys a car at a better price than its best bid.
Information: (800) 475-7283. Get Dealer Invoice Prices
The price dealers pay for cars is available from many sources.
The dealers’ invoice price is usually hundreds to thousands of dollars below the manufacturers’ suggested retail price.
Buyers should pay as close to the dealer’s price as possible, consumer advocates say.
It’s also possible to pay below that price if the dealer has a glut of cars or is receiving an incentive from the manufacturer. Consumers are usually unaware of these situations, however.
Dealer prices are available to members of the Automobile Club of Southern California. They also may be purchased at newsstands in the Consumer Guide Auto Report ’93 ($4.95).
Buyers can also write the Consumer Reports Auto Price Service, Box 8005, Novi, Mich., 48376 or call (303) 745-1700 in Denver, Colo. Cost is $11 to receive the price of one model, $20 for two and $27 for three.
See Dealers Offering a Fixed Price
About 1,000 of America’s 23,000 new car dealers offer cars at a fixed price. All Saturn dealers are among them.
“It’s always nice to know up front how much you’re going to pay,” says Consumer Guide’s Popely. “It’s also nice to know that you’re paying the same amount as everybody else for the same car.”
This tactic will displease those who enjoy negotiating. A fixed price also might be higher than a consumer could negotiate.
Use a Buyers’ Service
These companies pledge to find the car you want at the lowest price.
Here’s how one such service works. The national firm AutoAdvisor obtains a lower price than the consumer because, in addition to dealer cost data, it conducts research into hidden money that auto manufacturers provide to dealers. It also surveys the market to determine the supply and demand situation for specific models.
Fees at the Seattle-based firm range from $339 for factory orders to $1,200 for one-day service.
If a customer finds the same car at a lower price within seven days, the fee is refunded, but the car must be identical, even in color, and may be hard to locate.
Information: (800) 326-1976.
Buy a Year-Old Car
A car depreciates rapidly during its first year.
“The best buy is a 1-year-old car, especially if you know where it’s coming from,” says Jim Wangers, senior managing partner of Automotive Marketing Consultants, a consulting firm to the auto industry.
“Was it in a fleet of cars where it had more highway use than in the city? Was it in a place where it wasn’t abused by a kid? The best way is from a private party. Most people will sell for what the car is worth.”
Even if alternate services provide good value, it might make sense to buy from a dealer, consumer advocates say.
Popely of Consumer Guide Magazine says his concern about any kind of buying service is that middlemen might develop long relationships buying in volume from the same dealer.
“Whose interest is really being served, the consumer or the bidding service?” he asks. “There’s not necessarily anything wrong with this type of arrangement, but there’s a possibility there could be. Can I, as a consumer, get a better deal on my own? I would suggest that people shop at a few dealers to find out.”
