I'm new to the whole car buying thing. I want to go to a main dealer as I feel more comfortable. The car I want is a Honda with a few options (alloy wheels, red met paint etc), and I want to buy used. My local dealer has said they can get any car from a UK Honda main dealer. I've seen one on the net at a dealer in Bournmouth (I live in Birmingham), But it's a 1k over parkers 'Franchised dealer' asking price.
I'm in the fortunate that I can pay cash, so I have some room to negotiate. but I'm wondering whether I'll have to, or whether it's advisable to go down to Bournmouth to negotiate a better deal. What are the advantages in sourcing the vehicle through a main dealer and what are the disadvantages?
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My solution (which worked well sourcing a new Suzuki for a relative) was to ring around all the dealers and ask to speak to the sales manager (you want the organ grinder, not the monkey). Tell them what you want and that you want to buy right now - then ask for their best price.
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Cash is of very little incentive to salesman as you have just cut off a source of income commissionon from the credit company,Also Hondas seem to sell themselves so I do not see any massive discounts.
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Visit the websites of a few car brokers such as the ones advertising here. It could save you a lot of money and your contract is direct with your local dealer.
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When we bought SWMBO's old Fiesta Zetec-S (1yr old ex-demo) and the MX-5 (2yr old approved used) from main agents, the following secured a good discount, assuming you like, and are prepared to buy the car you are looking at:
Buy a copy of Autotrader, and circle all comparable, cheaper cars (within a year and say 10k of the one you're looking at). When it comes to the negotiation stage just say you're ready to do a deal now, but you've found these (and show them) which seem to be a similar offering but at a lower price. Explain that much as you want to buy the car today, you can't justify handing over £xxx extra without at least looking at these alternatives. Say that if the price difference was smaller (pick your figure), you would be happy to chance missing out on a better deal elsewhere and sign there and then, but at the moment it's not possible. Be prepared to walk if they refuse (another car will be along soon)
That got us £600 off their "best offer" on the Zetec-S, and nearly a grand off the MX-5 which initially was at screen price only. Both cars were in main agents, and therefore overpriced. The trick is to prove you're serious, be polite and reasonable, and try to make them see it from your point of view.
Cheers
DP
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I think if you're serious about buying on the day and have a fair price in mind (i.e the dealer is allowed to make a profit!) then you can usually get a decent discount.
The last couple of cars I've bought I've saved a substantial amount over the screen price by telling the dealer what I would like/can afford and then walking away if they can't match it. In both cases the dealer rang up a few days later and offered me the deal I asked for originally. Both cars were bought around December/January which is probably a quiet time for them.
Its worth a try at least - it saved me £1000 on my Avensis and £600 on a Ford Focus. Thats £1600 the dealers would have taken in extra profit from my pocket. I don't begrduge them their earnings, but they still took a decent profit on the cars overall.
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Best way if you can afford cash is the following
Most salesman - be it Kitchen's, Bathrooms or Cars get a commission (or kick back dependent on your point of view) of 1-3%. Therefore just offering cash will mean sweet fanny adams to them as their commission is based on the sale price.
However if they finance the deal it means they'll get back an additional 1-3% on top. This is where you can 'haggle' as this can lop up to 10% off the price if you take their terms of up to 5 years. (dependant on the finance house etc)
Now the clever part is as follows.
The salesman can lop off up to 10% because that's how much the dealership gets back off the finance house - The finance company hopes that you will keep the finance deal going for 5 years or so (as they'll make more money over the term than the intial 10% they give back). But due to the finance laws you can repay your 'loan' at any time over the period. You will generally lose 1 month's interest as a penalty (check the forms before you sign though!). So the day after purchase phone the finance house and ask to pay off the balance. I bet this 1month interest (not the montly amount as that'll include capital so about 80% of your monthly amount) is a lot less than the 10% savings.
Now the salesman will be happy as he's getting his additional 1-3% bonus (more wiggle room for matts, free tank of fuel etc) and you'll save up to 10%. However the salesman won't be happy a month later as generally this 1-3% is clawed back by the finance house upon redemption of the loan - hence he may tell you that you can't repay early!. Still them's the rules and when we know them we can all play the game!
However a double bonus may occur if the finance house doesn't claw back the commission - which some don't! Therefore everyone wins bar the finance house & they don't mind as only 30% repay early and they make more than enough from them!
Also don't feel too bad for the salesman as he's probably only lost 10% on the 10% saving (net of the clawback) and probably may qualify for some other target related bonus!
Happy haggling!
Cheers
Benjurs
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Too complicated for my simple mind. I just ask for the best cash price and if I don't like it I go elsewhere.
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I can't be bothered with all the haggling. I just go to an auction and get an 18 month old ex fleet car. It is still on manufacturers warranty so that greatly reduces any risk.
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