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Author
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Topic: Buying a new vehicle versus used?
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Lonny
PANTS ON THE GROUND
Member # 19
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posted March 18, 2016 04:00 PM
I hate buying a vehicle. That is probably a big part of the reason why most of the vehicles I do buy stick around for at least 15 years or more. I don't enjoy the bargaining or all the ways numbers can be twisted and manipulated. Not to mention, the time wasted making multiple trips to the dealership to hammer out a deal that should in reality take 20 minutes, tops. It seems like such a fucking game.
Now that I got that off my chest, recently, I noticed a 2016 Ram 1500 with 3500 miles at the local dealership. I drove, liked it, and sparred with the sales guy for a bit. Anyhow, the bottom price they would take was only $1000 cheaper than a brand new 2016 with the exact options, engine, etc. I made an offer that was $1500 lower to test the waters of how much they were willing to lower the price on the used Ram compared to the new one, and they wouldn't take the offer.
Now, you'd think they royally screwed the guy who traded it in with only 3500 miles, so you would think they more than likely make a profit on the used truck.
They told me it was all the incentives right now on new trucks make the price very competitive with lightly used. I did call another dealership and they did say the incentives were going to be easing the prices on new until early April.
So does anybody know how this bullshit really works and if there really are "incentives" to sell new that makes new price comparable to almost new?
[ March 18, 2016, 05:52 PM: Message edited by: Lonny ]
Posts: 1209 | From: Lewiston, Idaho USA | Registered: Jan 2003
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Dave Allen
Hi, I'm SUPER DAVE, IN CHARGE OF Q STUFF (and Goat Leader) "I'm really not trying to be a dick".
Member # 3102
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posted March 18, 2016 04:34 PM
It's complicated Lonny & I really don't have an answer for ya.
However I'll share some experience's. A guy I work with went thru the same thing last summer when he bought a 2015 Silverado, he was looking for a late model used pickup.
The salesman came straight out and said, I'll sell you one a year or couple three years old, or a new one for a grand or two more. I think my friend paid 29 something for a loaded non-leather 4x4.
Same kinda deal in December we were looking for a late model Ford Fusion. My wife calls her cousin, he works for Lithia Ford in Boise. We leased a new one for about $200 a month. Looking back probably should have bought it as the price was $18.500 loaded non-leather.
Anyway same deal used low mileage was almost the same !!
I think it's real and a guy is better off to buy new. It makes a guy wonder what the dealers are going to do to sell the late model used stuff though ?
[ March 18, 2016, 04:43 PM: Message edited by: Dave Allen ]
Posts: 1986 | From: Jordan Valley Oregon | Registered: Aug 2008
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Lonny
PANTS ON THE GROUND
Member # 19
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posted March 18, 2016 05:54 PM
Dave, Yeah, I wish I knew the car buying game better... It seems the common advice is buy used and save thousands. Everybody has a story about saving a bunch of money on lightly used and the original purchaser took the depreciation hit.
The problem is I've looked into used market a few times and never found the killer deals. Maybe finding a private deal could be the way to go or maybe I'm not looking hard enough?
Posts: 1209 | From: Lewiston, Idaho USA | Registered: Jan 2003
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Leonard
HMFIC
Member # 2
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posted March 19, 2016 07:12 AM
The question I have never answered for myself is; buy or lease? I always buy, and buy new. I can't get it out of my head that there is a reason why a perfectly good vehicle is for sale?
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EL BEE Knows It All and Done It All.
Don't piss me off!
Posts: 31462 | From: Upland, CA | Registered: Jan 2003
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Lonny
PANTS ON THE GROUND
Member # 19
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posted March 19, 2016 08:22 AM
I'm always skeptical of a almost new vehicle too Leonard. But, like I said above, buying vehicle isn't something that happens often in our house. When we do buy, its paid off as soon as I pull off the lot.
The whole deal churns my stomach. From the phony handshakes, to "You wanna take it for a drive?" to "Let's go inside and talk" and "What kind of monthly payment do you want to make?"
I had a salesguy ask me the other day if my possible trade-in was paid for? It is 18 years old and I've been the only owner and he knew all of this. Are you shitting me? Who in the hell would be making payments on a rig they owned for 18 years?
Why can't buying a vehicle be like buying a washing machine?
Posts: 1209 | From: Lewiston, Idaho USA | Registered: Jan 2003
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Dave Allen
Hi, I'm SUPER DAVE, IN CHARGE OF Q STUFF (and Goat Leader) "I'm really not trying to be a dick".
Member # 3102
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posted March 19, 2016 08:35 AM
I used to work for a couple new car dealers Lonny. Trust me the way things work now, they've ran off anybody who is honest and actually gives a shit.
For the most part dip-shits work @ these places now.
When we got our new car even though my wife's cousin is a salesman. I still did most of the deal on-line and on the phone. Everything was set up when we got there, she wanted white or black. When we got there she chose black, those two went for a ride.
We went inside signed some papers and where gone !! I despise the environment of dealerships !!
Posts: 1986 | From: Jordan Valley Oregon | Registered: Aug 2008
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Leonard
HMFIC
Member # 2
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posted March 20, 2016 05:40 AM
Yes, a car dealership is a place where they are not your friend.
I don't know if this is a solution, but. What I did was, I called the fleet rep and made an appointment. No preasure, at all. He asked what I wanted, he punched it in and quoted me a price. No haggling. I wrote a check.
But, the normal routine where the salesman talks to you, then leaves and comes back with a slightly different offer, etc. They usually do this three times and by then, you feel really anxious that maybe you will be allowed to buy a vehicle after all. What a relief!
And, this deal when you lease. Payments for 39 months. My brother is a general manager, and I know that they all claim to be the general manager, but there is really only one person who is. Anyway, he pointed out that you pay for your registration once a year; right? But, then you pay at 36 months and turn in the lease, and pony up the excess mileage money. Nice of you to pay for a year's registration and not use it. But when they get it back, the license has been paid by you, good for another 9 months, several hundred dollars.
If I'm wrong, straighten me out, please.
Good hunting. El Bee
PS I hate buying a car!
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EL BEE Knows It All and Done It All.
Don't piss me off!
Posts: 31462 | From: Upland, CA | Registered: Jan 2003
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DanS
Scorched Earth (AZ Sector)
Member # 316
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posted March 20, 2016 02:55 PM
quote:
But, the normal routine where the salesman talks to you, then leaves and comes back with a slightly different offer, etc. They usually do this three times and by then, you feel really anxious that maybe you will be allowed to buy a vehicle after all. What a relief!
Last time I bought a vehicle, I asked the salesman if he knew how much he could sell the vehicle for, if not find out, when he said yes, I told him that if he had to talk to God or whomever was in the backroom, I was going to leave. They do not want you to leave. You can almost hear them snicker when you tell them you are going to ask several different dealers until you find the best price, with no haggling.
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futuaris nisi irrisus ridebis
Saepe Expertus, Semper Fidelis, Fratres Aeterni:
Often Tested, Always Faithful. Brothers Forever!
Posts: 1465 | From: flyover country | Registered: Feb 2004
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jimanaz
2nd Place RICHARD FARNSWORTH LOOK-A-LIKE CONTEST
Member # 3689
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posted March 20, 2016 04:50 PM
What Dave said. Do your due diligence online. Figure out what you want exactly. Search local dealerships for it (or closest facsimile). Contact the Fleet Department, ask if there are any factory programs in place on your particular choice. You should already know the answer through your research. If you get the right answer, tell them the amount you are willing to bring them a check for. There may still be a bit of haggling at this point, but do it all before you go to the dealership. They'll offer you a ride, but it should be autopilot by this point.
One other caveat, a new vehicle depreciates about 10% when you drive it off the lot, but many times factory programs offset this
Posts: 940 | From: AZ | Registered: Oct 2010
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DAA
Utah/Promoted WESTERN REGIONAL Hunt Director
Member # 11
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posted March 21, 2016 03:13 AM
Between my personal vehicles and the many more than that I've bought for work, I've bought a couple dozen new cars and trucks in the last ten years.
It's not that hard...
For my most recent, I just used the Costco program. $500 below invoice agreed to before walking in the door. First thing after walking in, is they showed me the invoice.
Actually ended up ordering one and it took a long time to come in and there were some issues. Every issue was a chance to back out or get a better deal. Ended up $1500 below invoice, plus incentives, plus a lifetime Mopar bumper to bumper warranty included.
None of this was as difficult as choosing a steak at the grocery store.
Lease is the way to go if you plan on getting a new one every few years. Yes Leonard, you are wrong on that registration deal. At least in Utah.
- DAA
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"Oh yeah, they're gonna talk to you, and talk to you, and talk to you about individual freedom, but they see a free individual, it's gonna scare 'em." -- George Hanson, Easy Rider, 1969.
Rocky Mountain Varmint Hunter
Posts: 2676 | From: Salt Lake City, UT | Registered: Jan 2003
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DAA
Utah/Promoted WESTERN REGIONAL Hunt Director
Member # 11
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posted March 21, 2016 04:46 AM
Also on leasing... I did lease two of my new trucks and it made sense and worked out for me, but on this last one, purchase made way more sense.
Almost all the vehicles I've bought for work have been leases though. No idea how it adds up anywhere else, but the accountants and lawyers say that for us the fully deductible expense of a lease is better than the depreciating asset of a purchase.
And, lastly, if you have a trade-in, look at sales tax. In Utah, it can makes doing a trade-in a better deal than selling it yourself. I sold my old truck for $31K. Trade-in offer was only $30K. I had other reasons for doing the sale instead of trading in, but I would have been money ahead to do the trade-in, since sales tax on $30K is about twice the $1K more I got from the sale.
- DAA
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"Oh yeah, they're gonna talk to you, and talk to you, and talk to you about individual freedom, but they see a free individual, it's gonna scare 'em." -- George Hanson, Easy Rider, 1969.
Rocky Mountain Varmint Hunter
Posts: 2676 | From: Salt Lake City, UT | Registered: Jan 2003
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booger
TOO BIG TO FAIL
Member # 3602
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posted March 21, 2016 06:41 AM
Lonny,
Let me give you my .02 worth. I ran a Ford store in my hometown in the late 90’s. I got out of banking for a while with the intention of my wife and I eventually buying the dealership.
I went into this with my eyes open and had the opinion that most people liked buying a car as much as getting a bad rope burn, and I was right.
I turned the experience on its head, and it worked well for the 3 years I was there. I didn’t play the back and forth games, as my first price was the best I could do…fortunately, most of the folks I was dealing with knew me and trusted me when I told them that was my strategy. Word of mouth spread pretty quick...of course there were those that liked to haggle, and I knew I had to add $500 or $750 to my best price and negotiate down just to make them think they got the best of me.
I know it has been almost 20 years since I did this, but I still use what I learned to buy vehicles now.
Here are the facts:
A vehicle has the same invoice price in New York City, Russell, Kansas, or Boise, Idaho as long as the options are the same;
USUALLY, there is around $3,000 to $3,500 difference between the invoice price and the upper retail on the sticker;
Every dealer will be able to produce and show you the invoice price…don’t believe them if they say they can’t;
Unscrupulous dealers always want to put you in a lease over a purchase as they CAN make more money on the vehicle. Most people are ‘buying a payment’, and salespeople know this. It used to be that it was only a $50 per month increase in a lease payment for every $1,000 over invoice. If you are dealing with an honest dealership, the cash price for a car will be the same as what the price of the vehicle would be on a lease transaction;
Never trade a car on a lease vehicle—especially if you don’t owe anything on the vehicle. All you are doing is lowering your payment and you lose all of that equity;
As a banker, I would never recommend a lease to anyone that could not deduct the lease payment from their income;
As Dave indicates, leasing might be a good option if you don't mind a payment, don't exceed the mileage allotment for the lease term, and turn vehicles quickly;
Buying the vehicle is ALWAYS a better option if you plan on having the vehicle for 4 years or longer;
If you have a trade in, always know the value of your vehicle. NADA and Kelly Blue Book online sites are good places to start;
If you are buying a new car,demand to see the price they start with...dealers like to give you the illusion that they are giving you more than what your trade in is worth. This is why it is important to know the value of your trade in…initially they take the wholesale value of your car and subtract it from the invoice to get the trade difference, which is called wholesale to wholesale…THEN they work off of retail and add back the difference from invoice to sticker price to your trade in…in both cases the trade difference is the same, but therein lies the illusion of ‘getting more for your trade’;
Big dealers sometimes are best to deal with as they do give more in reality for your trades. It is simply due to volume…they have more contacts to move your trade in quicker. It is not that your small dealer does not want to give you more, but they have to factor in how long your trade might have to sit on their lot.
With all of that said, buying a late model used vehicle is a bit more confusing as you really don’t know what the dealer cost is in the vehicle…you don’t know what he had to pay at auction or what kind of money he had to put in the trade to make the sale on another transaction.
Once again, be prepared when you get there to know what a like vehicle is worth from the 2 sites above. For the most part, dealers don’t get too crazy on trades as they know they have to turn around and sell them, so the retail price you find shouldn’t deviate too much from what they are asking.
Hope that didn’t muddy the waters too much!
PS: LB…here in Kansas, at the end of a vehicle lease, the lessee can go back to the county treasurer, turn in the vehicle tag, and get a pro-rata refund on the property tax.
[ March 21, 2016, 10:52 AM: Message edited by: booger ]
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If we ever forget we are one Nation Under God, then we will be a nation gone under--Ronald Reagan
Posts: 911 | From: Bob Dole Country | Registered: Apr 2010
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UTcaller
NEVADA NIGHT FIGHTER
Member # 8
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posted March 21, 2016 12:13 PM
I hate buying trucks too. That's probably why I've only owned 3 in my life. Got my first in 1983, an old beater 74 chevy half ton. Cost me $1000.00 if I remember right. Drove that one until I bought a Brand new 1990 Mazda 4x4 pickup. That one cost me $12,000.00. Drove that one or should I say beat the shit out of it until 2009 when finally decided to get another truck. That little sucker was one hell of a truck, got rid of it with almost 300,000 miles. Then in 2009 I bought a 2005 Nissan Titan 4x4. That one cost me $16,000.00 Had 45,000 miles on it when I bought it. Now has 160,000 miles and again it has been one hell of a truck. No problems whatsoever. So I guess I've been pretty lucky with trucks.Hoping to get another 5 years or so out of this one.
Posts: 1612 | From: Utah | Registered: Jan 2003
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Lonny
PANTS ON THE GROUND
Member # 19
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posted March 21, 2016 05:51 PM
Thanks a lot guys for the very good info.
Booger especially thanks. That post took more than a cup of coffee to hammer out and it was very helpful.
Almost embarrassed to admit it, but between the wife and I, we've only owned 6 vehicles in our entire lives. Three were purchased new. My everyday driver is 18 going on 19 years old. It might sound old fashioned, but both the wife and I don't believe in making payments on cars.
I did quite a bit of research over the weekend and feel more comfortable with the prices they are throwing at me. They are bringing in a new truck later this week that has what I want. We have hammered out a price, if I want to take it. The noose is definitely tightening, but I guess we'll see if it is a done deal?
I am having some belief in the incentives now that I've checked into invoice prices and talked with a couple dealers. The Costco thing is interesting, I had no idea Costco was into vehicles?
Posts: 1209 | From: Lewiston, Idaho USA | Registered: Jan 2003
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Lonny
PANTS ON THE GROUND
Member # 19
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posted March 21, 2016 05:58 PM
One question for those who might know...
Can you really get a little better deal later in the month? Like the last few days of the month?
Posts: 1209 | From: Lewiston, Idaho USA | Registered: Jan 2003
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DAA
Utah/Promoted WESTERN REGIONAL Hunt Director
Member # 11
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posted March 22, 2016 03:04 AM
I think the end of month thing is possible, but not anything to count on.
My Jeep when I bought it, I went and looked and made an offer in Nov. and the offer wasn't accepted. New Years Eve, wife is watching TV and says they are saying "no reasonable offer refused" and that I should call and make them the offer again.
So, I did. And they said no, again.
An hour later, they call me back, say if I can take delivery within a couple hours, they'll accept my offer. So I did.
They claimed they were pulling out all the stops to be the #1 volume dealer in the state for the year and had only a couple hours to go. Might have been BS. But, they did sell me that Jeep for what I'd offered and they had declined a couple times already.
- DAA
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"Oh yeah, they're gonna talk to you, and talk to you, and talk to you about individual freedom, but they see a free individual, it's gonna scare 'em." -- George Hanson, Easy Rider, 1969.
Rocky Mountain Varmint Hunter
Posts: 2676 | From: Salt Lake City, UT | Registered: Jan 2003
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Aznative
FARTS ON CLUELESS LIBERALS
Member # 506
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posted March 22, 2016 05:38 AM
My current hunting rig is a 1997 Dodge Dakota with V-8 and 4x4. I purchased it in 1998 with less than 20,000 miles. It now has 200,000 on it. I purchased it for 500 bucks above NADA Guides low book value. My credit union doesn't use Kelly Blue book because the values on retail are too high.
This type of deal is the best way to buy a used vehicle. You need to get it while it is still in warranty in case you are getting a lemon. You need to get it as close as possible to low book. The problem I had 18 years ago is people purchase cars at retail and owe more than high book because of all the dealer add on costs. Then they expect to sell this overpriced car for a small profit above what they owe when they are really upside down on the car. It is tough to find a good deal.
Good luck
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Never thought the devil would need a teleprompter but I could be wrong.
United State of America: RIP
Born July 4th 1776 died November 6th 2012
Posts: 1924 | From: Phoenix Az | Registered: Jan 2005
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booger
TOO BIG TO FAIL
Member # 3602
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posted March 22, 2016 05:43 AM
Dave brought up an interesting point. We were a small dealership...the 'Sales Force' was myself and the owner's brother, so while we had pre-determined goals we wanted to hit...it was a bit more laid back than a big dealership.
The big dealers have to have quotas in order to meet sales goals in order to sell cars so they can pay their bills.
Every time you go by a dealership, count on the fact that they are paying a MINIMUM of $300 per month per vehicle just in finance charges from the manufacturer.
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If we ever forget we are one Nation Under God, then we will be a nation gone under--Ronald Reagan
Posts: 911 | From: Bob Dole Country | Registered: Apr 2010
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Kokopelli
SENIOR DISCOUNT & Dispenser of Sage Advice
Member # 633
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posted March 22, 2016 06:02 AM
I'm confused ???
"$500 below invoice."
Does that mean that they're losing $500 on the sale ??
That doesn't seem likely.
![[Confused]](confused.gif)
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And lo, the Light of the Trump shown upon the Darkness and the Darkness could not comprehend it.
Posts: 7580 | From: Under a wandering star | Registered: Apr 2005
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DAA
Utah/Promoted WESTERN REGIONAL Hunt Director
Member # 11
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posted March 22, 2016 06:54 AM
Invoice is what they pay before incentives etc. from the manufacturer. So they can sell well below invoice without losing money.
It's a good, consistent, documented number to start from. Any dealer that won't show you the document on request - or just volunteer to show it right from the start, just leave without looking back.
- DAA
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"Oh yeah, they're gonna talk to you, and talk to you, and talk to you about individual freedom, but they see a free individual, it's gonna scare 'em." -- George Hanson, Easy Rider, 1969.
Rocky Mountain Varmint Hunter
Posts: 2676 | From: Salt Lake City, UT | Registered: Jan 2003
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booger
TOO BIG TO FAIL
Member # 3602
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posted March 22, 2016 07:20 AM
Koko,
Invoice is basically the 'cost' to the dealership.
If a dealer sells $500 below invoice, he has to make that up when he pays off the vehicle to the manufacturer. The invoice amount has to be paid when the title is transferred to a new owner.
On each invoice, there is an amount called 'holdback'...it varies from vehicle to vehicle, but a good average on a new vehicle 20 years ago was from $1,100 to $1,600.
That is paid by the manufacturer back to the dealer. In a small dealership like the one I ran, it got paid to us in January and July...in a big dealership, I would bet it gets paid monthly.
[ March 22, 2016, 07:22 AM: Message edited by: booger ]
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If we ever forget we are one Nation Under God, then we will be a nation gone under--Ronald Reagan
Posts: 911 | From: Bob Dole Country | Registered: Apr 2010
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Kokopelli
SENIOR DISCOUNT & Dispenser of Sage Advice
Member # 633
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posted March 22, 2016 08:24 AM
Ok........Thanx !!!
Good info to know should I ever decide to buy a new truck that cost more than my first house did.
![[Eek!]](eek.gif)
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And lo, the Light of the Trump shown upon the Darkness and the Darkness could not comprehend it.
Posts: 7580 | From: Under a wandering star | Registered: Apr 2005
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Leonard
HMFIC
Member # 2
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posted March 22, 2016 09:53 AM
Something my brother told me about quotas. They are definitely real. Each salesman is actually out on a limb. I will make a guess at the numbers because I'm not sure, but it's close. He has to sell between 4 and 7 cars a month, or he's on thin ice.
Also, the part about the end of the month is very real. These guys are as desperate as they will ever be, approaching the end of the month. And, they say, go looking when it's raining. Not sure about that, but it sounds valid?
As far as I know, Costco is a good deal but I have not used them? I think they are exactly the same as going through AAA referral service, which is what I used.
Good hunting. El Bee
edit: My first house cost $15,000. My first truck cost $1830; 1969 Datsun. My present truck, (2004 Titan 4X4) cost about $36,000. Kinda sick, eh?
[ March 22, 2016, 09:56 AM: Message edited by: Leonard ]
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EL BEE Knows It All and Done It All.
Don't piss me off!
Posts: 31462 | From: Upland, CA | Registered: Jan 2003
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Dave Allen
Hi, I'm SUPER DAVE, IN CHARGE OF Q STUFF (and Goat Leader) "I'm really not trying to be a dick".
Member # 3102
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posted March 22, 2016 08:24 PM
Lonny, yeah, end of the month is the time to buy. Like Leonard said salesman have to sell @ least seven as far as I know to stay employed, or @ least average that.
I will say this though. If the local dealer has what you want. And the price is right there, don't fret over a few bucks.
I just went thru that buying and selling a house. Yeah probably left 5k on the table selling and probably spent 5k too much on the buying end.
Who care's ? If it make's ya happy it can't be that bad !! I love Sheryl Crow tunes..
(edit) 1st house-new. 1993 cost 72k..
[ March 22, 2016, 08:28 PM: Message edited by: Dave Allen ]
Posts: 1986 | From: Jordan Valley Oregon | Registered: Aug 2008
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