Buying A New Car? Here’s My Shopping Strategy with my own Dealer Incentive!

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Modern_Family_old_car

This past weekend, the transmission of my 2001 Honda Odyssey died. The car has over 130,000 miles on it and has done a fairly good job raising our family. It sort of reminds me of the latest “Modern Family” episode (see “The Old Wagon“) where they just can’t seem to part with the old family “junker”, at least until it rolls off a cliff and is totaled. Unfortunately for me, the Kelly Blue Book value of our Odyssey as a trade-in is less than the cost to have the transmission replaced. Ouch! I will be donating my Odyssey to charity though.

Modern_Family_old_car

So now I’m currently on a mission to find a new family car at a set CASH price of $18,000. I don’t want to finance. I just want to drive off the lot having paid ONLY that price. And I live in the San Francisco Bay Area (dealers are you listening?! Read through this post for my OWN Dealer Incentive for YOU!)

You might think that this is a piece of cake, but I have learned otherwise. The problem is, we are a bit picky on the type of car we want/need to get (and get soon). Our requirements:

  • Good safety ratings –> must protect my family
  • New –> for a good warranty (see below)
  • Comfortable –> for a family of 5 (sub-compacts and compacts don’t quite work for us)
  • Techy –> in some way (my request)
  • Good gas mileage –> gas prices won’t be coming down any time soon
  • Reliable –> tired of spending money on repairs
  • Warranty –> don’t want to purchase a warranty on a used car, dealer certified perhaps but you don’t know the true history of a used car & how it was driven or cared for
  • Automatic –> while I like and can drive stick shifts, my wife cannot

That’s not too much to ask for, is it? Well, what I have found over the past few days is that there is an unwritten price point that is really hard to break when you are looking at those main requirements above. It seems that you simply cannot get into a car that matches those points for under $21,000.  I guess that is why so many Americans either lease or finance their cars. I am trying to avoid increasing any of my debt, so cash is the way to go.

Cars that I’m Looking At

I’m a bit selective currently (but getting more flexible) on the Makes and Models that look appealing. For the most part, these are entry-level, base models with no frills (or thrills?). We need a reliable car to get from point A to point B (e.g., to and from school and activities and a few road trips). And we don’t plan on getting a new car in the near future after that.

Auto Buying Collage

Currently on the list (2011 models):

  • Ford Fusion – want with a Ford Sync simply because after reviewing it, I don’t think I could be without it. Many people really have great things to say about this car. Looks like I4 S (w/ Sync) or SE (w/ Sync) – MSRP for S is $19,420 & SE is $21,100 (after rebates)
  • Nissan Rogue – my wife likes this car, simply because it is a bit higher off the ground, has a hatchback for hauling stuff, and is NOT a sedan. MSRP for S Trimline is $20,810.
  • Nissan Altima – has a better Consumer Reports rating than the Ford Fusion. Pretty decent looking and good reliability it seems. MSRP for the 2.5 Trimline is $19,900.
  • Hyundai Elantra Touring – a bit of a step down from the cars above, you can feel it when you just sit in it, but still it matches my requirements and has a great warranty (better than others). A bit less powerful than other models (at about 130 hp). MSRP is $15,995.
  • Hyundai Tucson – fits the right price point for a cross-over (like the Nissan Rogue). Don’t know much about the Tucson (Santa Fe looks a bit nicer but outside of the price point). MSRP is at $18,745.
  • Subaru Forester – another cross-over type that I thought I would throw into the mix. Model may be different due to standard vs. Automatic transmission. MSRP starts at $20,295.
  • Subaru Legacy – to round out the sedan vs. cross-over mix, the Legacy matches many of my requirements. MSRP starts at $19,995.
  • Subaru Outback Sport – I always like hatchbacks for the cargo room. Has a good entry level price point as well. MSRP starts at $19,995 like the Legacy.
  • Chevy Cruze – feedback that I have received is that this is a great contender in the slightly larger than a compact car. Features and warranty look solid as well. MSRP starts at $16,275.
  • Chevy Equinox – another crossover contender to compete against the Nissan Rogue or Hyundai Tucson but a bit more pricey. With solid gas mileage at 32 MPG highway, it looks great! MSRP starts at $22,745 so it might be out of reach for me.

So those are the Makes and Models that I’m considering. What others have I missed or should consider? I will add more models as I find possible contenders.

My Current Shopping Process

Shopping for a new car (or potentially a Factory-Certified Used Car) is definitely a confusing and time consuming process. Personally, I would rather get a new car but there is something to be said about having a Used Car that has a dealer warranty. My only concern with that is around how the car was used, why it was traded in (especially if it has low mileage), and generally not having the “new car smell.”

Here are the avenues I’m pursuing:

  • Friends & Family Discounts – because I have done some reporting/blogging work with both Ford (here & here) and Nissan (here), they extended to me a Friends and Family Discount. These seem to be pretty good deals because you pay only slightly over the Dealer Invoice price and you get to take advantage of Rebates or other incentives. I qualified for the X-Plan (Ford) and the VPP C-Plan (Nissan). With this plan, there is no negotiating or haggling, you basically get what you get.
  • Consumer Reports New Car Price Service – many years ago, I worked with Consumers Union on a phone version of the New (and Used) Car Price Service as well as on a web-enabled version. It’s good to see that this service still exists as it is definitely worth the money if you are shopping for a new or used car and want to see all of the Invoice details. For details, see their information page.
  • Consumer Reports Bottom Line Price/Build & Buy – get price quotes, work with pre-screened dealers, do it all anonymously, and more. See their site for more info. I plan on testing this out on a few of the models above. Also, if you subscribe to the “Cars Best Deals Plus” service, you get to see Bottom Line pricing when you are looking at specific vehicles. Start your negotiations below that point if you can!
  • Costco Auto Buying – I have heard different things using this service. Some people love it, others say that you can do better by just haggling.
  • Mass Email – a friend who works as Editor in Chief of a Auto Content website had a really good strategy. Contact all of the fleet managers or dealers in your area via email. Tell them exactly which model you want, the features, the trimline and how much you will pay and then wait for responses. He knows of people who have gotten amazing deals from this. I may resort to this.
  • Cars.com or similar sites – I haven’t tested this out either. Might be a viable option but you need to have some flexibility to really find the deal (e.g., drive far to go to a dealer).
  • Haggling at the Dealer – this is probably the most stressful of all of the options above. You MUST be prepared to walk away, even after a few hours of negotiation. Watch out for the hidden gotchas on these. DON’T use the MSRP as your starting point. Come armed with the Dealer Invoice amount (e.g., get a New Car report from Consumer Reports). Learn about Dealer Incentives or Holdbacks.

I realize that there are more options out there and creative ways to get rock-bottom pricing. There are many techniques but sometimes they are incredibly convoluted and time-consuming so they might not be worth a savings of $500. The bottom line is, the Dealer has to make a little bit of money.

An Opportunity from Me to the Winning Dealer

So here is where I have decided to get creative. Word of mouth is a huge factor when it comes to these high-ticket items. If a particular individual or dealer bends over backwards to help you get an amazing deal, most likely, you will want to talk about it and recommend them. Conversely, if a dealer or sales person is horrible, condescending, has an attitude, forces you into buying something you don’t want or employs shady sales tactics, you will want to talk about that as well.

Just yesterday, I went to a dealership (I won’t mention who – yet), and the sales guy was impossible to find (it was towards the end of the day). I started asking some questions as I was simply looking around and he flat out said to me “are you planning on buying today?” to which I answered “no but within the next few days”. His attitude changed immediately, seeing that he was not going to get a sale and basically ending the dialog there. My feeling from that? He’s NOT getting my money, nor is that particular dealership.

Because I’m a technology blogger with a solid following on Social Media and the blogosphere in general, I have a little bit of leverage here. I have written about Customer Service and issues I have had with other cars of mine (here too). I’m not afraid to do it again. On the flip side, if my experience is good or GREAT, I will definitely acknowledge that in an article. That is my intention for writing this initial post.

So, here is my Personal Dealer Incentive. The winning dealer will receive recognition in my follow up blog post about my shopping process (provided they want the positive press and marketing). I do not have a value for this but I must say that I have worked with MANY different technology companies and they can directly attribute sales to my reviews and articles about them. This is better and more effective than paid advertising in my and other people’s opinions.

There is it. I’m looking for a car with specific features and a non-negotiable price point. If I get what I want, I will give back in a different, more modern way.

Who will take me up on this challenge? Ford, Nissan, Hyundai or Subaru? Or perhaps a brand that wasn’t named?

Oh, and I plan on Twittering about my buying experience once it comes down to negotiations! I will use the hashtag #HTDcar if you want to follow the fun. Also, I will be fully disclosing everything in the end.

Update (10/3/10): I realized recently that some dealers might NOT want me publicizing a rock-bottom deal. So, I will respect which ever dealer wins here. If they want me to disclose how much I got the car for, I will do so, if they do NOT want me to disclose things, I will respect that as well. It’s basically up to the dealer to win the deal and make the call!

Update (10/4/10): Reflecting back at taking the family car shopping yesterday, I learned some important things. Some car sales people still employ the same tactics as 20 or more years ago. My wife and I realize how much we dislike the “write down on this piece of paper what you want to pay” and then they go back to the manager behind closed doors. Personally, I find that process to be not only annoying but insulting. The fact that we have a firm price should not then initiate a back-and-forth negotiation. That may work with others who may have a negotiable price point, but not for me. I really like the concept of pre-negotiated rates, either though a Friends and Family program, or an internet car buying service. While I realize that it will take time for dealers to understand the value of social and online marketing, it is something that they definitely should start considering now, as customers will be expecting it.

HTD says: Help me get a new car now!

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11 Responses

  1. Hey Michael! Came across your post – have you heard of CarWoo.com ? We actually specialize in getting dealers to compete for your business online. It’s pretty nice – can just sit back at home and watch your offers come in. The dealers can see the other offers you’ve gotten as well so they know the price to beat. Would love to have you try it out!

  2. Very cool! Thanks for letting me know. I may try it out. Who knows what might come from it. Will read more about your site.

  3. Thanks for this great info, I was exactly looking for this website and finally find it.

  4. Awesome idea, great execution, very practical! Social media has taken the sociological hierarchy and squashed it into a pancake. People can no longer be judged by their “status” or “stature”, instead they’re judged by what they bring to the table. Anyone with a voice and a personal commitment to honor the intention to achieve their goals will be able to do so. That being said, who ever told you that you need $18,000 to buy a car? Who ever told you that you needed money? Isn’t time equivalent to money? Do you have time to spend on getting a free car? How would you feel driving off the lot in a brand new, entirely free, vehicle of your choosing? Feels good doesn’t it?

    That being said, here are some out of the box suggestions to get your brain in gear :) Your passion, expertise, and experience in the technological field is worth something. How about making a barter with a company for you expertise and influence? Microsoft Sync is a big part of the marketing plan for the new Ford Fusion (a vehicle that’s on your list), how about seeking a sponsorship from Microsoft? What if you did a 365 daily blog as you drive to work and have it be sponsored by the car company that you get to sponsor you? Why not write some letters to their corporate offices and offer a partnership? Word of mouth marketing is undisputedly the fastest spreading, most effective means of marketing a product. If you trust your friend and your friend tells you to buy something – you probably will. Even if you don’t buy the product that was recommended you’ll probably go around telling your other friends how awesome it must be from your original friend’s description. Use this to your advantage, offer them something they can’t refuse!

    “Your success, or failure, in life is a function of your expectations.”
    What are you expecting?

    Sincerely,
    Brian Swichkow
    http://www.trutricks.com
    ~ We help people grow ~

  5. Love the ideas. Here’s one to add that we last used a couple years ago: pit dealers against each other, and be clear you are doing it. You could do that in combination with contacting the fleet managers (if by email, being sure not to use BCC–let them see each other), otherwise when you go into a dealership. We ended up cutting through a lot of hassle and wasted time doing this as well.

  6. Thanks Scott. Great ideas and that is somewhat similar to what my friend suggested. I like the “full disclosure” method of NOT BCCing the recipients.

  7. http://www.truecar.com is an awesome service that may help you find out if the dealer is giving you a good price or not. I’m not affiliated with them at all, but I’ve been using it as I look around for a new car for my wife.

  8. hello Michael
    I have recent visited on your blog I seem it really informative..Thanks for this great info, I was exactly looking for this website and finally find it…great website!!!

  9. The In Dash Car DVD

    Navigation for Audi A6 device is compatible with CD, VCD,

    MP3, MPEG4, CD-R, WMA and JPEG and supports DVB-T, enabling you

    to watch digital TV anywhere you are. Of course, you cannot do

    this while driving

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Disclosure: This is a global disclosure for product review articles on HighTechDad. It does not apply to Automobile reviews and there are other exceptions. Therefore, it may or may not be applicable to this particular article. I may have a material connection because I may have received a sample of a product for consideration in preparing to review the product and write this or other content. I was/am not expected to return the item after my review period. All opinions within this and other articles are my own and are typically not subject to the editorial review from any 3rd party. Also, some of the links in the post above may be “affiliate” or “advertising” links. These may be automatically created or placed by me manually. This means if you click on the link and purchase the item (sometimes but not necessarily the product or service being reviewed), I will receive a small affiliate or advertising commission. More information can be found on my About page.

About HighTechDad

Michael Sheehan (“HighTechDad”) is an avid technologist, writer, journalist, content marketer, blogger, tech influencer, social media pundit, loving husband and father of 3 beautiful girls living in the San Francisco Bay Area. This site covers technology, consumer electronics, Parent Tech, SmartHomes, cloud computing, gadgets, software, hardware, parenting “hacks,” and other tips & tricks.

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