How to buy my 1st car....(dun dun DUN!!)

Discussion in 'Community' started by Abstract, Jan 26, 2005.

  1. Abstract macrumors Penryn

    Abstract

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    #1
    Okay, here's the low-down: I'm moving (back) to Australia after having lived there for 1 year, and now that I know I'll live there for at least another 3 years, I'll need a car when doing my PhD. This is my 1st car, so I've never dealt with car salesmen. My parents won't be around to help me, since I'll be in Oz while they're in Canada. :(

    The car I want to get is called a Hyundai Getz or possibly a Toyota Echo 2D hatchback (auto). The Getz costs $15853 AUD, or around $12500 USD. The Echo will cost around $16600 (not sure exactly with the Auto). Both cars are supposed to be good.

    Questions:

    1. Should I negotiate the price? If so, how much do you think I can negotiate? The price of the 2-door, 1.5L Getz (auto.....I'm a lazy North American driver) is $15853. Since its a cheap car, they're probably not making a lot of money/overhead on the car, so my negotiating room isn't much, right? I'm thinking of trying to get the Getz for $15000, but I'm not sure if that's too much of a markdown to ask for, or too little. :eek:

    2. Should I lease the car for 3 years instead? I don't really know the benefits. If I sell the car in 3 years, I figure I'll sell it for 50% of its original value (ie: I'll sell it for around $8000, a net loss of around $8000), but my stepdad thinks it's better to just lease the car and give it back to them after 3 years. I think leasing may be more expensive, but since I'm not in Oz, I can't find out an exact lease price. But if it's $300 per month, I'll end up spending a total of $11000 after 3 years rather than $8000.

    3. How about using a "Car price negotiator"? You go to the dealer, get a quote, and this negotiating company "promises" that they'll get you a price that's better than the quote you get from the dealer. One person told me that it worked for his friend here in Canada. Not sure about Australian negotiators. It still sounds too good to be true, though. Here they are: Carbroker negotiator
     
  2. CorvusCamenarum macrumors 65816

    CorvusCamenarum

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    Birmingham, AL
    #2
    Yes you should negotiate. Rare is the person who goes to a dealership and pays full sticker price. As to how much, maybe try doing a little research into things like average selling price, the cost of the vehicle to the dealer, etc etc etc. That way you have an idea of what other people have gotten the car for. Don't let the salesperson try to talk you into getting a bunch of things you don't want/need. Compare the sticker to the actual invoice.

    I don't know how it is there, but here, from the time you buy a brand new car to the time you drive it home, it's already lost about 1/3 of its value. The first year depreciation is the worst. Again, research is called for. How well have other model years of this car hold its value? Maybe get some paper and compare the costs if leasing vs. buying. This will depend upon factors like how much your loan is for, taxes, etc.

    That sounds kinda iffy. The last time I bought a car, my preferred tactic was to walk into the dealership with cash. Having a large quantity of banknotes mysteriously caused the price of my new car to drop 20%. Salesmen like cash, and it's much easier to talk them down a bit if you're prepared to pay on the spot. Be sure to compare various sources of financing, it will make a huge difference.

    More importantly, don't ever say that you're shopping around. That will generally lead to an increase of sales pressure. Also, if you don't like what you're hearing from the salesperson, don't be afriad to walk away. And most importantly of all, read both what and before you sign. Carefully. Read the fine print twice.
     
  3. Abstract thread starter macrumors Penryn

    Abstract

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    #3
    Are there books and such to find out the cost of the vehicle to the dealer? Would they let this info known to the public? Seems that if everyone knows this info, then anyone could just say, "I'll pay you $xxx.xx on top of the cost of the car to you."

    Is it actually better to buy a car at the end of the month? I heard it was better for negotiating because the dealer may be trying to reach a sales goal. However, I'm thinking that if he hasn't made enough money from sales that month, he'll try to milk ALL customers near the end of the month.

    The price negotiator does sound dodgy, but you don't go to him unless you already have a quote. Then they go out and try to do better. It seems too easy, but it doesn't sound like you need to commit.
    If I don't say "I'm shopping around", then how am I going to pressure them into giving me a better deal, because "I'm shopping around" was going to be my tactic. :eek: Hell, I was going to make up a quote and say that another dealer offered me this price for the same car.
     
  4. Chip NoVaMac macrumors G3

    Chip NoVaMac

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    Northern Virginia
    #4
    Keep in mind folks he is talking about Australia. It is possible that the way cars are sold is different down under. I am waiting to hear the tales from our Aussie friends. :)

    As to brands. I know here in the states Hyundai is really doing wonders with the quality based on press reports. Toyota has always been a good bet though worldwide.
     
  5. Abstract thread starter macrumors Penryn

    Abstract

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    #5
    Really? I haven't paid attention to Hyundai (or cars in general) recently, so its hard for me to say. I'm absolutely sure Toyota has a good rep, so thats why I'm considering the Echo.

    One negotiating "tactic" (cough) I was thinking of using was the fact that I was quite set on buying a Toyota because I have a long history with them, and their cars are great. Also, my parents find it a safe purchase if it's a Toyota, but if they could sell me the Getz (a cheaper car than the Echo) at a price that makes it worth it for me to buy Hyundai rather than Toyota, say $1500 less than the Echo, then I'd definitely consider it.

    It's corny, I know, but I'm actually being honest. :) Too bad it's probably a line they've heard 476 times each year.
     
  6. Bibulous macrumors 6502a

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  7. Chip NoVaMac macrumors G3

    Chip NoVaMac

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    #7
    Might work. :) Best to have a contract in hand showing your interest though. At least for here in the states.

    The other thought that came to mind is that since you will only need the car for three years, the quality probably won't matter. The warranty should cover you during that period. The only thing to look at then is the resell value difference between the two after three years. That may offset the extra cost of the Toyota. For example look at the resell values of the Cavalier verses the Corolla. Part of the issue on resell values here in the states is the amount of rebates that some American made cars have during the model year. IMO these heavy rebates then affect the resell market value to heavily.
     
  8. allisonv7 macrumors 6502

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    #8
    I bought a Civic LX back in September. Luckily my dad was there to help and we were able to get it for $3000 under the sticker price. Basically what we did was decided we wanted to buy it from a certain dealer because friends had good experiences there in the past. Before we went there though we visited the other large Honda dealer in our city and got a quote. We then went to the dealer we wanted to purchase it from, we told them what we wanted, that we had been to X dealer first though, but still thought we'd give this guy (the dealer we liked) the chance to sell to us.

    They were itching to know what the other dealers quote was but we didn't tell them and they kept coming back with offer after offer and my dad would tell them that it wasn't good enough. Basically it got to the point when they couldn't go any lower and we were happy with their number. So we bought it from there :) The big thing we had in our corner was the fact that we had visited their competitor and gotten a quote, though we didn't reveal what it was, it definetly made them nervous enough to keep bringing their price down.



    allison.
     
  9. Lyle macrumors 68000

    Lyle

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    #9
    In the U.S. one would check out the information at the Kelley Blue Book or Edmunds sites to determine the dealer invoice prices. And yes, people (including me) do use this to gauge how much they're willing to offer on a car.

    But as Chip said, this may not be all that useful to you in Australia. I tried looking up the Hyundai Getz and couldn't even find a listing for it, which I assume means it isn't sold in the U.S. For the 2-door Toyota Echo Hatchback (with Automatic): Edmunds says that the base Manufacturer's Suggested Retail Price (MSRP), a.k.a. the "sticker price", is $11,155 but the dealer's invoice price is only $10,485. But that still only gives you a handle on what these cars cost in the U.S., which probably has very little relation to the going prices in Australia.
     
  10. Lyle macrumors 68000

    Lyle

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    #10
    I love to hear good car negotiation stories. ;)

    My wife and I make a pretty good team. I tend to do all of the research, to help decide what price range is going to be acceptable, but when it comes down to the actual negotiations I'm no good because I get too nervous. She, on the other hand, doesn't have the patience to do the research but can keep her cool during the negotiations. (She teaches 8th graders, so dealing with a car salesman is nothing to her.)
     
  11. OutThere macrumors 603

    OutThere

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    #11
    Here are a couple little tips I have picked up:

    Do not tell the dealer your maximum price when you go into the dealership. You can take one of two options: Offer up a middle price that you like (not your maximum), and discuss it with the dealer. The other option that you can take (which I would recommend), would be to use the method of offering up what you think is a bare minimum price, and tossing prices back and forth until you find a mutually agreeable price. Do not let the dealer push you around. Remember this: He wants to sell the car no matter what. He would rather sell the car at a really low price than to not sell it at all.

    I would go with the toyota, because, while Hyundai has come up in quality in recent years, Toyotas are extremely good quality cars, that will serve well for a long time.
     
  12. bigandy macrumors G3

    bigandy

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    #12
    buy a second hand car, save a ton of cash.

    even something nearly new and you'll save yourself hundreds, maybe thousands.

    i have bought my last 4 cars through ebay, and they're all great, not to mention the one that i mention on my sig ;)
     
  13. Abstract thread starter macrumors Penryn

    Abstract

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    #13
    Isn't that below cost?

    You know, I'm actually going to do that --- get a quote from somewhere else, and keep it a secret. But how do they know you aren't making it up, saying you got a quote from somewhere else? Again, that was my 1st plan. ;)

    @ChipNoVac: Yeah, I'll make sure to bring a contract from the other dealer, but I won't show them the quote. ;)

    Thanks guys, I'd be dead in the water if it weren't for you. I'm sure car dealers love seeing unknowing "noobs". :p
     
  14. Chip NoVaMac macrumors G3

    Chip NoVaMac

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    #14
    It could be, or not be. No offense meant, but sometimes there are two stickers, particularly on Hondas since so much can be added on by the dealers.

    Save yourself a lot of trouble and time. It is good that you will not have a trade-in.

    Two choices that I would recommend. If Austrailia has something like Edmunds.com or Consumer Reports who sells pricing guides on the vehicle of your choice. Get it for the two vehicles you have in mind. These will generally also have any rebates being offered, both to the consumer and the dealer. Get an idea of how the cars are optioned on the lots down there. Figure out what its final cost is after rebates, and what the markup that is customary down there. Go in with that figure in mind.

    When it comes time to buy, look at the salesman square in the eye, and let him know that is what you want to pay. If he says fine, then you did well IMO. If he has to check with is sales manager, let him know that he and his sales manager has only one chance to come back with their bottom line offer, and that you expect that not to take much more than 15 minutes. If the salesman does not come back in 20 minutes walk out the door.

    The second much easier, and not too much more costly method is using a Buying Service. The way it works in the states is that you call them up and tell them which car you are interested in buying. They will then tell you that that vehicle can be had for X dollars over invoice minus dealer/consumer rebates. For the two times that I used this type of service, it was between $100 to $200 over the invoice. They will tell you which dealers will accept the offer. You go and buy. They then review the final purchase and refund any overages that the dealer may have made. You can generally find buying services at Credit Unions in the US. And most don't require proof of membership to a credit union to get the deal done.

    Sure if you want to make it a sport of it you can spend hours trying to get every last penny from a dealer. But your time is worth something. I have known some people who have spent 4 to 8 hours trying to get the car for next to nothing.

    Just go in as an educated consumer, and they will generally treat you more than fair. Keep in mind the above applies to the US market. We have yet to hear from anyone that has direct experience in buying down under. The first tactic may get you the bums rush out of the dealer for being an arrogant American.

    Good luck!

    Edit: oops, I just saw who I was replying to. :eek:

    Much may apply to you up north of the border. Thanks.
     
  15. jsw Moderator emeritus

    jsw

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    Andover, MA
    #15
    I'm not sure if it's mentioned above (if it is, I missed it), but financing rates are also negotiable and important - it doesn't matter if you get the car at a great price if they screw you with financing fees. It's worth a bit of back-and-forth and trips to a couple of dealers to find out exactly how much you're paying for the car, what your rate is, what fees there will be, etc. Your total cost (somewhat obviously) is: (any down payment) + (monthly payments X months) + end-of-term payments (if any) - that's the total cost of the car, and well worth calculating.

    And another thing - no matter how good a deal they'll give you "if you buy today", always - ALWAYS - walk out and come back the next day, preferably after they call, because you "need to talk to the other dealer" (which is easiest to do if, in fact, there is another dealer).

    Go during crappy weather. Go at the end of the month. Pick a new guy.

    In the end, you'll pay more than you should, but hopefully less than someone else would have. Good luck!

    Edit: Also, note that any "I need to go talk to my manager" stuff is essentially crap. Just answer with something like "should I talk with him directly? it seems like it'd be easier and save time...."

    Another edit: the invoice price is NOT what the dealer paid for the car. There are often kickbacks, incentives, etc.
     
  16. kaylee macrumors regular

    kaylee

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    Mar 21, 2004
    Location:
    Australia
    #16
    Hi

    I've actually been looking at getting a small car recently (and I live in Australia), so I thought I'd give you some help/ideas.

    With the Getz and the Echo - you will be paying extra for safety features (ABS extra on Getz, and ABS and Front airbags extra on Echo). For me I think they are important to have- for you, well thats up to you.

    Some other cars you could consider:
    Honda Jazz (ABS and airbags are standard - however aircon is not on the lowest model, and must be added in package with keyless entry), VW Polo (a little more expensive, but pretty much everything you could want is included as standard), or the Mazda 2 (safety features (ABS+EBD, and more airbags) are added with the safety pack on the bottom two models).

    Saving money:
    Given the time of year, there will be 2004 plated models that the dealers will be trying to clear out, so maybe save yourself some that way. Or consider buying a demo model - for a few km's on the clock, you get new car warranty and a discount.
    Also, there is the alternative of getting a second hand car.
    On one hand, its cheaper, its already had its big depreciation in value (you lose up to 25% in a new car's value the moment you drive it out the car yard), will likely be cheaper to insure, and you won't be as upset (as if it were a brand new car) when people decide to do things like scratch their keys down the side of your car or fling their car door into yours (for me, this is one thing putting me towards a second hand car, seeing i work part time at a shopping centre, and I get enough damage to my current car).
    On the other hand, you probably won't get much in the way of warranty unless some of the factory warranty is still left (second hand cars are only required to have 12 months if sold from a dealer, and you need to be careful as to what they cover).

    Before you decide on a car, it's probably an idea to visit a few car yards, and just have a look (Hint: if you don't want salespeople to bug you while you look, go when they are closed). Once you have chosen one, or a few different ones - work out the most you can actually afford to spend (and don't go over that), and if they try to make you a deal you aren't entirely happy with, walk away rather than take it and regret it - if they are serious about the sale, they will make a better offer rather than you walk away.

    Resale value: After 3 years, you would get MORE than half the original new cost back selling it private (at least with small cars you do), not too sure how much if you traded it in to a used car yard. To get an idea, look at cars that are 3 years old now, and see how much they are compared to their new price 3 years ago.

    Best of luck getting a car.
     
  17. jsw Moderator emeritus

    jsw

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    Andover, MA
    #17
    Great advise, kaylee - the only thing we differ on is the "walking away" part. I've found I always get a better deal on the 2nd or 3rd day, esp. if I go near the end of the month and make sure the dealer calls me before I go back (and make sure i get there an hour after I said I would). But YMMV!

    In "real" life, I like to be nice, attentive, punctual, and reasonable. When buying cars, though, I like to be sarcastic, late, and a bit rude, and never seem all that interested. In other words, like a car salesman. It has worked for me.
     
  18. stubeeef macrumors 68030

    stubeeef

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    #18
    Very good advice also go to kelly blue book www.kbb.com or NADA at www.nadaguides.com if I remember correctly they do both new and used car values and for different countries.

    Like jsw said, bad weather, end of the month, new guy.
    I just got a used Honda minivan, had the guy drive it to my mechanic, gave him a list of what to fix, and talked him down over the breakfast I was buying him while we waited for the inspection to finish. Got a great deal on a very used minivan, pick it up saturday. He was the new guy! :)
     
  19. wdlove macrumors P6

    wdlove

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    #19
  20. kaylee macrumors regular

    kaylee

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    #20

    With the "walking away" I wasn't meaning to not ever come back and try to negotiate, but rather just leave a deal that isn't what you want and/or is unreasonable when they won't seem to budge from it - you getting up to leave can suddenly change their minds in some cases.

    There is the opposite tactic too - don't leave until they give you what you want - my boss is apparently very good at this.
     
  21. Chip NoVaMac macrumors G3

    Chip NoVaMac

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    #21
    Sure, but the dealer does need to make something. Yeah, I know that dealers make a ton on repairs. The kickbacks, incentives, etc. have become their new profit margin. On lower end cars I would be surprised to hear that their gross margin is much more than 5 to 10% with these hidden deductions.
     
  22. Mechcozmo macrumors 603

    Mechcozmo

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    Jul 17, 2004
    #22
    My grandpa told me that the best day of the year to buy a car is the last day-- that is the day when they want to sell cars to boost their overall totals.

    So go in a day or two before, then come back December 31st. Only problem is that you have another 350+ days until then...
     

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