Need some advice/tips on buying a new car for family

[max_boost]

If I may, you really can't compare saving thousands to saving $20 lol but I understand your point.

At the end of the day, it's business. If the deal works, it works, if it doesn't, no hard feelings, it's just business.

[Wrinkly]

Originally posted by pathwaydon
Understood.

So what you're saying is that a business person shouldn't make a fair profit.

Absolutely not what I'm saying at all. Sorry, I was generalising - not putting it in relation to a specific vehicle price point. I meant what I said - why pay $21 if I can pay $20? That's just common sense, and as a consumer rather than a salesman, I'm sure you'd agree.

Originally posted by pathwaydon
My I ask a question?

When you go to Wal-Mart and see a product or service advertised at a certain price, do you haggle with the manager for a further discount even if there is no defect, it isn't a floor model, etc..?

On a $20k vehicle the dealer makes a 3-6% profit. At almost any retail store where you spend money and don't even think about it the margins are 10-50% in profit, but a customer will 9 times out of 10 pay the price on the shelf. Isn't that extra $10.00 or whatever equally better in your pocket then the retailer's?

No - I don't. But I have read about people who do - and it apparently works. I think we've become programmed to the way things are - you go to a regular store and pay the sticker price. But when it comes to big ticket items like cars and real estate, you're 'expected' to haggle and it's assumed that "wiggle room" is built into the pricing in the first place.

Finding Carcost canada was great - takes the guess work out, saves the customer from insulting the salesman/dearlership and removes the feeling that you've been ripped off. It's a win win.

Originally posted by pathwaydon
or else why would they come in to the dealer in the first place?? We aren't giving out free hot dogs...

Because they do actually want to buy a car, yet have no idea just how much profit the dealer makes and is afraid of being ripped off so they 'low ball'. The average Joe on the street has no reference point. This is why I like Carcost so much, it was quite an eye opener for me, and it provides that reference point. People automatically assume that a car salesman is going to be full of BS so it doesn't matter what you tell them regarding how much profit you do or don't make - they won't believe it. Carcost is a third party 'mediator' of sorts and provides that information. More people will no doubt discover it's benefits and use it over time.

.....and sometimes there are free hotdogs...lol

[pathwaydon]

Originally posted by Wrinkly

Absolutely not what I'm saying at all. Sorry, I was generalising - not putting it in relation to a specific vehicle price point. I meant what I said - why pay $21 if I can pay $20? That's just common sense, and as a consumer rather than a salesman, I'm sure you'd agree.


No - I don't. But I have read about people who do - and it apparently works. I think we've become programmed to the way things are - you go to a regular store and pay the sticker price. But when it comes to big ticket items like cars and real estate, you're 'expected' to haggle and it's assumed that "wiggle room" is built into the pricing in the first place.

Finding Carcost canada was great - takes the guess work out, saves the customer from insulting the salesman/dearlership and removes the feeling that you've been ripped off. It's a win win.



Because they do actually want to buy a car, yet have no idea just how much profit the dealer makes and is afraid of being ripped off so they 'low ball'. The average Joe on the street has no reference point. This is why I like Carcost so much, it was quite an eye opener for me, and it provides that reference point. People automatically assume that a car salesman is going to be full of BS so it doesn't matter what you tell them regarding how much profit you do or don't make - they won't believe it. Carcost is a third party 'mediator' of sorts and provides that information. More people will no doubt discover it's benefits and use it over time.

.....and sometimes there are free hotdogs...lol

[pathwaydon]

I agree I like carcostcanada as a salesperson. I just fail to understand why it is automatically assumed that a dealer "must" discount the price.

Isn't a good deal simply a car you want, at a price you can afford from a dealer that you trust will take care of you after you buy? What is a dealerships motivation to look after problems afterwards if you didn't let them make any money to begin with?

As a hypothetical, if EVERY dealer everywhere got together and said..."NO DISCOUNTING ANYMORE" would people still buy cars? I'm sure they would.

Also, it's not called "wiggle room" it's called "profit". My point is still valid, it's ego. Like you said, it's just generally accepted that you should haggle on price. So people will do it.

Lastly, how is the dealer "ripping you off" if he makes a full profit? 90% of the items you buy on a monthly/weekly basis are full profit for the retailer.

I didn't mean for things to get confrontational. All I was trying to point out is this: If you don't want the hassle of haggling price, then pay the price. It's only $1000...that's about $10/month if your financing. 1 less coffee every 2 days.

[Wrinkly]

Originally posted by pathwaydon
I didn't mean for things to get confrontational. All I was trying to point out is this: If you don't want the hassle of haggling price, then pay the price. It's only $1000...that's about $10/month if your financing. 1 less coffee every 2 days.

I didn't think it was getting confrontational - until that ^ post that is - it kinda comes across that way (apologies if mine did - wasn't meant to at all) It's very difficult to gauge on the interwebs. I actually thought we were having a good, intelligent discussion (I know that's a rarity on this site..lol).

I never once said a dealer shouldn't make a profit. I believe in a fair day's work for a fair day's pay. I was just trying to give you (my opinion only) of the consumer's side of things. I don't understand either how it came to be that dealers are expected to discount - I've just never known it be any other way - it just 'is'. I also never said we were being ripped off, I'm pointing out that with no knowledge of just how much profit is in the deal for the salesman, the consumer may PERCEIVE he's beng ripped off. This is where Carcost comes in handy - it removes those unknowns, and actually helped me see just how little profit there really is in some instances. Quite eye opening.

It would be interesting to see what would ensue if they did all say "no more discount". As you say, I'm sure people would still buy cars, yes. But - If they did stop discounting, and with the dollar almost at par again, I think many more Canadians would be looking south of the border.

I think another issue, is possibly all the large discounts that have been seen of late. I just got a very, very good one myself and I also saw a $14k disount on a 5 Series BMW (as an aside - and more relevant to your other thread, they didn't seem interested in financing it, they were looking for a cash buyer ). Maybe as a result shoppers feel that if a $10k or more discount is possible on a car, albeit at luxury/executive level, they mistakenly believe ALL dealers make HUGE profits on EVERY vehicle and therefore there is room for bigger discounts, regardless of price point? Again - it's all about perception.

[pathwaydon]

I was trying to bring some levity to the conversation. Apologies if it came off confrontational.

Typically when you see those large discounts and rebates you have remember that they are coming from the manufacturer, not the dealer. And often, they will say "cash deal only" but that is because they are also offering sub-vented financing (i.e. 0% or 1.9%) something so low the bank couldn't touch it. When they offer those finance options, it's the auto maker that is making sure that the bank get's paid for financing you. So instead of paying off the bank to offer 0% they will offer you a huge "cash only" discount.

It's 6 of one 1/2 dozen of the other. Believe me, the manufacturer has accountants and bean counters working around the clock figuring this stuff out.

[luv2ride_bikes]

Originally posted by pathwaydon
I agree I like carcostcanada as a salesperson. I just fail to understand why it is automatically assumed that a dealer "must" discount the price.

They don't call them stealerships for nothing. IMO, dealers have been ripping off customers for years. I think a dealer should make a profit, but do they deserve a 2K or 3K profit for a few hours work? A lot of dealers also try to add on all these little extras (documentation fees, vehicle etching, vehicle prep, etc..) to increase their profit above the 2K or 3K amount.

Originally posted by pathwaydon
Isn't a good deal simply a car you want, at a price you can afford from a dealer that you trust will take care of you after you buy? What is a dealerships motivation to look after problems afterwards if you didn't let them make any money to begin with?

Well their motivation is the high prices they charge for service

Originally posted by pathwaydon
Lastly, how is the dealer "ripping you off" if he makes a full profit? 90% of the items you buy on a monthly/weekly basis are full profit for the retailer.

The 90% of the items most people buy regularly are low priced items. How can you compare this to a $30K+ vehicle? When you buy a new TV, do you not try to get the lowest price possible?

[pathwaydon]

Well there's a lot to reply to there.

Let's deal with the profit margins. As a previous poster has indicated consumer websites like carcostcanada.com will give you this information. I'd be suprised to find more then a few vehicles in any line-up that have $2K-$3K in profit. That vast majority of vehicles, at least at Hyundai and I know Toyota have less then $2K in profit. But even if you're correct, if the dealer makes a $27000 investment of capital to purchase the vehicle from the manufacturer is he not entitled to a 5%-6% return on investment? That is likely the lowest return in retail! And most deals don't take a few hours work, in somecases it takes days or weeks. The dealer needs that profit to:

A. Pay the sales rep
B. Pay support people
C. Keep the lights on
D. Pay himself

It's a business. It's not like the dealer gets every dime of a $1500 or $2000 profit. He gets what's left after everyone gets paid.

High Prices in service:

What is the going door rate for an independant mechanic in your area? Let's say Canadian Tire or something. Around here it's about $85/hour. Our door rate at the dealer is $106/hour. Now, if you're going to have to pay to get repairs and whatnot done on yourt car anyway, is it really worth the $20/hour you save going to an independant mechanic? Has he had the specialized training that techs at the dealership are REQUIRED to take. How well does he know your particular make/model/year. If you just spent say $40k on a new 2010 Genesis Coupe, would you take it to Canadian Tire to have work done. Maybe you would, but I wouldn't.

To Rip off or not Rip off.

It really doesn't matter the sticker price of the item. By that prevalent logic, if a new car was only $150.00 no one would ever haggle for a lower price. I doubt it. I will shop around for a less expensive T.V. when I'm in the market, but once I find the one I want at the least expensive price assuming they are both the same make/model year/trim I'll buy it. But I won't try to haggle the guy over the price.

And what about service? I assume from your use of the word stealerships that you have had a few bad experiences with sales reps or a particular dealer. Did you do any research before hand with the BBB or local consumer affairs advocate? Would that have been worth it to you in the long run?