Ahhh… buying a new car. I’ve attached a video I recorded some 6 years ago on this very subject. Nothing has changed, except I no longer maintain andrewboughton.com which I reference several times in the video. You are holding an auction in which new car dealerships compete for your business. Assuming you’ve already decided the vehicle you’re interested in, here’s a quick summary of the process.
- Locate 8 or 9 dealers in your area (within 50 miles or so)
- Contact each dealer, ask if they have your vehicle in stock or can get one
- Tell them you are buying the car this week (very important), and the lowest price gets the business
- Tell them you’re contacting several dealers in the area to solicit bids
- Give them the format to submit their bid. I always have them include at least the MSRP and the sale price. The MSRP helps you compare the cars between dealers, it should be identical if it’s the same make, model, and option package. I will take bids over the phone or email.
- Tell them you will get back to them within 24 hours with a decision (very important)
- After you’ve received all the bids (you only need 2 or 3 bids for this to work), start calling them back
- START WITH THE HIGHEST BID FIRST!! (most important step) You want to give them a chance to improve their offer before you make a decision
- I say, “You were close, I want to do all my service at your location, if you can match $XX,XXX you will get the deal”. Please note, I always subtract an additional $1,000 from the lowest current offer (i.e. if I have 3 bids $50k, $49k, $48k I will set the target at $47k). Call all bidders highest to lowest, say exactly the same thing. Even the lowest bidder gets a chance to improve their offer.
- Pick the best offer, and tell them to prepare the paperwork you’re on your way to pick up the vehicle
This process will save you 5% -10% off any price you’re able to negotiate in person and it will only take you about 90 minutes to complete. I also compare bids along the way to Truecar or Costco pricing to make sure it’s competitive. On occasion you will find a better price through Costco depending on the car you’re interested in purchasing.