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Aug 12 2008

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Smoke and Mirrors: Buying a New Car

Smoke and Mirrors: Buying a New Car

In general, I keep my vehicles about 10 years, so it’s been awhile since I have been in this game. Some things have changed but the overall process is the same. Last time, I actually researched what vehicle I wanted by test-driving the selected models to eliminate the least desirable. The Internet was in its infancy at that point; so little information was readily available without visiting the dealer. One dealer advertised that they sold at three percent over invoice. I contacted that dealer and was astonished that they actually provided me with all prices for every option. I then configured the desired model right down to the color and all options, and then faxed to all dealers within an hour’s drive of Belleville. Many called me to come in for the best deal, but there were several who actually provided written quotes. With the best quote in hand, I went to the dealer, completed the paperwork with no hassle whatsoever. I had done my homework and got a fair deal.

Fast-forward to today and things are a bit different. You can now fully configure a car and get the MSRP price online, however, you still need to go to the dealer and negotiate the final price. Still one issue remained. What is the dealer’s cost? If you don’t know their cost, how can you determine a reasonable offer?

What’s really interesting is that I stumbled upon a web site www.carcostcanada.com. For $39.95, you get five price reports, meaning you can configure up to five different cars including options and their service will provide you with a price report showing both MSRP price as well as the dealer invoice price. They also provide the current dealer incentives that are available. This site is well worth checking out! You can even view a sample report.

As recommended by carcostcanada.com, I printed out the report for the vehicle I wanted and presented to the salesperson. Surprisingly, he was familiar with the report and verified their numbers were indeed correct. This sends a clear signal to the salesperson that you are in fact serious about buying the car, so negotiation, in my opinion, is much easier.

If you absolutely hate negotiating, carcostcanada.com offers a secondary service. For $99 they will seek out the dealer willing to sell the vehicle to you on your terms. You specify the percentage over invoice, maximum administration charge, maximum distance you are willing to travel to get the vehicle, plus a first and second choice on exterior color. If they can’t find any dealer willing to meet your criteria, you don’t have to pay that $99. The service probably works well in a large metropolitan area where there are many dealers in a small geographic location. I did not try this option.

As car purchases are a big-ticket item, it pays to spend a bit of time to save money.

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