I tried several different ways to get a good deal on a new car. Maybe you can learn something from my experience to make yours better. Here’s how it went:
Costco Auto Buying Service and Discount
A complete waste of time and effort. You sign up through the Costco.com website and are given a “savings certificate” to take to a local dealer, whose name and location aren’t disclosed until you sign up. So right off the bat, you’ve got no idea if the dealer is within a reasonable (to you) radius. Mine was.
When I got to the dealer, I showed them my Costco card, looked at the cars, test drove myself silly (hello, I can’t actually see through that enormous sticker in the rear window!), and then they told me the “discounted” price. The dealer actually said, “Costco wants us to only offer its customers the models with the protective coating and floor mats.” Really? Costco makes you up-sell its customers options they don’t want? Do I have to buy 50 pounds of oats, too?
The bottom line was the sales manager showed me a piece of paper which purported to be their factory invoice and then said the Costco price was their invoice + $375 + cost of options. There was no opting out of the “options.” When I produced evidence that several other dealers offered much lower prices, the manager got patronizing and clicked his tongue at me. “The Costco discount is the best price we offer,” he said.
The Costco deal amounted to $400 under MSRP. That’s no deal. Plus it pissed me off to be patronized.
This is a completely online service. I created a free account and then selected the car and options (none, thank you very much, just the standard stuff is fine). The next screen directs you to choose three dealers who will be contacted to provide an offer on the car you want.
The process is supposed to work by having dealers email prices to you; you compare and respond with counter-offers based on these prices; you negotiate completely online and get the best deal by playing the dealers against each other.
There were a couple dozen dealers to choose from, problem was only two were in my county and of those two, only one was reasonably close. There were dealers listed who were more than 100 miles away. Maybe their prices would be awesome, but who wants to drive 200+ miles round-trip to find out?
I clicked on three anyway, but I’ve received at least six offers from six different dealers. So maybe it doesn’t matter what you click. Some of the prices were good deals, but I have no way to know if they’ll honor those prices once I actually show up and I’m not driving to Honda of The (Death Valley) Desert to find out.
I think this would only be helpful if the dealers are geographically convenient.
USAA Auto Circle
This is the car buying service available to USAA members. I only found out about it while chatting to the insurance rep about getting kid #1 added to my policy after passing his driver’s test. It’s a PITA to find on the USAA website, so I just typed “auto circle” into the site’s search bar and went from there.
You select the make of car and are directed to their preselected dealer. In this case, the Honda dealer is about 20 miles from me, an improvement over CarWoo.com. The dealer then responds to you within 24 hours with pricing information. You also print the savings certificate and have a fairly short timeframe before it expires (three days or so).
I got the pricing email lickety-split. But I also got a follow-up phone call within two hours to my home phone. Apparently, USAA shared that tidbit with the dealer without my realizing it. I never give my home phone out to salespeople, I always use my cell phone number (because when I’m not harassing my kids via cell, it’s off and I don’t have to talk to wienies). So be aware.
The price was good, but again I had nothing to compare it to without going in to the dealership. It’s just a starting place. As with Costco, once you get to the car lot, you may discover that the price is accurate, but you also “have” to buy gold-plated floor mats or whatever.
Internet Research and Contact
I searched the inventory at local dealers online and clicked through their various “contact us” or “get an instant price quote” buttons. Only one was willing to actually give me complete pricing information, which I really appreciated. At the very least, I could see what the current DMV and state-mandated fees might be. That allowed me to work backwards to a price range on the car that would get me the off the lot price I was looking for. It’s not helpful to be quoted $15,995 only to find out that there are $4,500 worth of options and fees at the last minute while you’re signing the contract.
I read a lot of articles on edmonds.com, cars.com, and kbb.com. There were plenty of warnings about the slimy tactics used by car dealers. And I experienced several of those tactics. Most of the articles also claimed that now (in the autumn) is the best time to buy a new car because the new models are coming out and dealers want to get rid of last year’s models. I didn’t find that to be true. The dealers I met or talked to were pushy and angling to squeeze every dollar they could out of me.
I absolutely believe car dealers should make a profit, but the guys I dealt with (and they were all men) were completely focused on beating me. There was very little negotiation, in fact, there was mostly sleight of hand resulting in a big profit margin for them.
Most car buying tip sites also advise that you make your new car purchase separate from your old car trade-in so as to maximize the trade-in offer. It’s also helpful so you don’t get bamboozled about the actual cost of the new car. I’ve had three dealers offer three very different amounts on the trade-in, but all were well below Kelley Blue Book for a trade-in. That frustration has led me to step back from car buying for awhile. I may take the minivan to Carmax for (yet another) appraisal, but I’m finding this whole process discouraging. It really doesn’t need to be this difficult.