I hate car buying

We bought two cars in 2012/13. They were both straight cash deals, so this may or may not apply to your circumstances. I negotiated them both the same way.

1) Know what you want -- exactly what you want. Make, model, exact package on the car. We only visited dealerships to test drive cars and once we knew what we wanted, we had no intention of stepping foot into a dealership again. 2) Know the invoice price of the car you want -- with the exact options you want. 3) If possible, try to get a handle on what the going dealer incentive package they are giving on the car. It's nearly impossible to know for sure, and can differ from dealer to dealer, but do as much Internet research as you can to see if you can figure how little over (or under) the invoice price they are selling for. Also, sites such as Truecar.com give you a range of how much people have paid for the car you want with the options you want. You can hit the bottom of the range if you put in just phone work.

In our case, we were paying cash -- which a lot of dealers don't want to deal with, because financing is their actual way of making money. They don't make a ton from selling cars. But the phone calls in my case went this way: I want this car, with this package. This is how much I am willing to pay -- everything included (you can add an asswipe fee if it suits you, but the bottom line cost, minus tax and title, needs to be $X). I am not coming into your dealership (what they want to make it into something emotional, which gives them control). I am calling every dealer reasonably nearby. First one who has the car I want at the right price with no BS gets a deal. Fax through a contract today and I will give you a credit card for a deposit and be in within a day with the rest of your money.

My experience: On popular cars, it is difficult to get the exact options you want in inventory. But if they have a car that is close -- with a bunch of factory options you don't want, but they have to keep attached to the car they have in inventory -- they will still meet your price and just throw the useless options you would never have chosen to pay for.

You will have to go through a bunch of bullshit artists, to find someone ready to work on this terms, but I did find dealers who understood that I was really going to hang up the phone and move on to the next. It just takes one who, for whatever his reasons, is ready to take about a 3 percent profit over his invoice cost minus incentives -- for a no hassle sale that moves a car quickly. And I found that both times within a week or two.

 

That Consumer Reports service is TrueCar's service branded with Consumer Report's name on it. If you put in the specs you want at TrueCar for the cars we bought and waited for solicitations from dealers, you wouldn't have gotten the pricing we got. It's fine if you want to do it more easily, but you will pay up for that ease.

The purpose of the phone was simply that it wastes as little time as possible -- if you are holding to a price, don't waste any more time with dealers than you have to UNTIL you have a contract in hand. They do return phone calls, so there is no need to ever waste your time walking into a dealership.

Know what you want. Have a really good idea of the dealer cost (this is the key, but doable with all the info available nowadays), so you can make a tough, but not entirely unreasonable offer. Leave as little meat on the bone as possible where someone may be ready to move the car you are looking for so it isn't sitting in inventory for them. The time a car sits in inventory is money lost for them.

Be prepared to have to make a bunch of phone calls to find the one dealer ready with the car you want.

I don't have a ton of experience buying cars, but that strategy worked pretty well twice within the last year and a half -- getting us pricing that TrueCar's site put in its "unusually low price" category (actually at prices the bars on the chart suggested you shouldn't be able to get).

 

How do I know what? That you can negotiate a better deal on your own than 99.9 percent of people get through TrueCar and other websites that broker for dealers?

I know because I did a ton of research about how those sites operate, the pricing dealers offer via those sites. ... and more importantly, what the actual dealer costs were for the cars we wanted, which is all that mattered in knowing what the best price they can possibly sell a car is and keep the lights at the dealership on.

It's common sense. TrueCar is nothing more than a broker for dealerships. They get paid a commission on the sale by the dealer if the dealer makes a sale based on a lead that TrueCar sent them. Logically, the money that TrueCar takes as a middleman is money that you could have saved negotiating on your own without a middleman. That alone should tell you paid SOMETHING for the ease of your 90 minute transaction. But on top of it, dealers know the type of customer they typically get via those sites and try to maximize their chance of a sale at the highest price possible. As a result, they are basically looking to give what most customers perceive as a "good" price, but they are not giving their rock bottom price.

For what its worth, TrueCar (and that Consumer Reports service, which is simply TrueCar) takes your info and then sends only three dealer quotes. So I'd be curious as to why 12 to 15 dealers to responded to your TrueCar/Consumer Reports inquiry.