Purchasing a New Vehicle?

[Toad-O-Line]

I see from the ads in the papers that the car dealers are gearing up for some spring cleaning. I purchased a new vehicle a couple of years back & it was a learning experience.

Watch out for those 0% financing deals. Pay attention to the cash purchase price vs. the 0% financing price (it is always higher). Get your figures and run them by your banker - If you are a secured creditor you may get a better deal by borrowing from the bank and paying the cash purchase price as opposed to the 0% financing option.

Pay attention to the extra add-on costs such as freight, license, registration, etc. These costs can add up in a hurry.

Also, once you think everything is done there are other options such as extended warranties, rust proofing, security systems, CD player and various upgrades. Again, these costs can add up in a hurry.

Another thing to watch out for is when the dealer calls to inform you that your new vehicle is ready. Dealers call around to different dealers to see if your model is availalbe (Green Dodge, power windows, keyless entry, etc.) Sometimes they find your model & specifics however it may have a couple of options on it that you didn't ask for. If they pressure you into paying for these options tell them to forget it. Chances are they will give them to you for free just so they can close the deal.

And last but not least - Taxes!!!

Hope this helps.

[james t kirk]

Just another comment about rust proofing....

It's a huge scam.

It's NEVER been proven to work.

In fact, all new cars carry a perforation (holed through) warrantee which is usually in the area of 6 years.

Do you know if you get your car rust proofed on day one, you void your factory warrantee (albeit, the rust proofer's warrantee now takes over)

I don't know about you, but i would rather have a GM warrantee than a joe blow rust proofing company warrantee.

You have to watch because sometimes these guys have weasel clauses written in that says if you don't take your car in for some sort of rust proofing servicing, then their warrantee is void.

Most cars today have steel panels that are corrosion protected by one form or another.

My car is now 5 years old (GM) and was never rust proofed when purchased new. I was underneath it the other day and other than the odd clip, there is not a spec of rust on the under carriage.

I find rust proofing to be a sticky gooey mess that hardens with time and then cracks at the stress points.

Water gets into the cracks and sits there or travels underneath the rust proofing making it even worse.

The best recipe for a rust free car is a clean car. Wash the wheel wells frequently (hopefully with fresh rather than recycled water) in the winter, as well as underneath.

[Animal]

I work at a dealership and agree with the rust proof opinions stated above.

One other word of warning LEASES.
Be very careful here as there is more small print in a lease than anywhere else.After you return your vehicle you may get a bill a few months later for stuff that should have been fixed or mileage.
Be very careful!!!!!

Keep all paper work for the vehicle even after it was returned at least for a year.

[SDFeuerzauber]

If you wouldn't buy on your first visit, then why make an offer? Is KarateKid's word not worth anything? If you make someone an offer on anything, then you really should keep to your word. If you are making an offer you know is crazy, then of what use is it? I would think someone posing as an "industry insider" would have something intelligent to say.

If you want an extended warranty, then there are many types to choose from. Usually you can buy a warranty (like auto insurance) with a deductible or no deductible. It depends on how much you want to spend. Some people think that $50 is a small price to pay for a transmission repair. If there's any real sticking point, it's that the markup is about 80% on most manufacturer warranties and maybe you can negotiate yourself a deal for some type of discount.

As far as rust is concerned, most manufacturers including GM, DCX, and Ford use what is called galvanized steel. It is a zinc layer applied to the sheet metal and the zinc rather than the steel will corrode, thus sparing you rust. Rustproofing is generally not required. The main benefits of rustproofing are possible reduced roadnoise and sometimes the paint is also protected from sun fading.

Freight is almost always over $400. And anyone who thinks he negotiated this out of his car purchase is simply uninformed. It's part of the cost of the car and the dealer is billed for it by the factory. If a dealer said to you "ok you don't have to pay it," then what they did was lower the selling price of the car.

Dealers do not simply call around to find a car you might like. Each manufacturer has in place a network which a franchised dealer has access to. A vehicle can be located from the other side of town or a thousand miles away. However, sometimes a color or option group is in short supply. To get your "lightning blue," you may need to be flexible and purchase a power passenger seat because that's the only one that exists. You can always place an order for what you want, but most customers are too worried about losing some type of rebate or incentive. If you weren't obnoxious when negiotiating your deal, maybe the dealer will lower the cost of the undesired option for you; but there are no free options on any car, except for some allowable substitutions such as cargo doors instead of a hatch or instead of a sliding door. You can tell the dealer to forget it but then you still don't have a car.

There should be no difference in the selling price of a car when an incentivized rate is used. If there is, then it's up to you to ask for the same selling price. A dealer will still typically earn a profit on a 0% finance rate; the reserve is earned because it will typically tie up the factory finances for a shorter period of time. No private bank will give you 0 or even 3% fianancing and no dealer really wants you to pay cash. If you do, then it's impossible for the dealer to earn a reserve from the bank. GMAC and Chrysler Financial pay as much as US $575 to a dealer for handling a 36Mo term loan at 0%.

[tboy]

Now is it just me or does SD sound like he works for a dealership???

Just a couple of things:

1) At no time did anyone say that they should make an unreasonable offer, but if you make an offer and the seller baulks at it, and you don't want to pay any more, then why NOT walk? You mean to tell me that if you make an offer on a car then you HAVE to buy it at that price? I thought that no contract was binding until a document was signed?

2) As for calling around, that has happened to me also, and yes, they also tried to sell me the vehicle and charge me for the options on the car that I didn't necessarily want (and no, they weren't part of a package). I said no thanks, find me the car I ordered.......(waited 3 months for it) but I got what I wanted.

3) There are good dealerships with a long term commitment to good business practises and there are some ones out for the fast buck. My family has been involved in the automotive industry for over 20 yrs and this is a favourite story of mine: A lady goes into a dealership and puts down $500.00 on a vehicle. But wants to talk to her husband about the deal. Well the husband says that they should wait until they get their income tax return back before buying the car. So she cancels the contract. yes, the dealership cancelled the contract, but they kept the $500.00. Well, this customer had bought her previous 3 cars from this dealship.......and she never went back.

Anyhow, just my two cents worth.....as always, take someone with you when buying a vehicle and do your home work. Know what you want, what you want to spend, and what it is worth to you.......

[super]

the only one that makes sense here is SD. All the others are obviously ignorant" AKA" lot lawyers. The auto industry is one of the most complicated business around and unless your're in it for a long time(29 years in my case), most people know nothing of it. So spare the advices since you obviously know not much (nothing).

[tboy]

Hmm could this be another case of one of those not so professional dealers I mentioned???? ONly someone like that would say "ignore all opinions except for the ones I agree with....." I guess since he told everyone to ignore my advice which was "know what you want, know what you want to pay, and do your homework" he wants to sell you something you don't want, wants you to pay too much, and doesn't want you to do your homework. Hmmm now doesn't THAT sound honest???

I can see his lot now "Super Duper Car Sales"..... probably out of a broken down trailer in an old A & P car lot!! heheheh You know the ones, where they have Canada's inventory of 1974 Dodge Omni O24s in Banana Yellow with the wonderful Plaid interior! hahahahha

Oh yeah, and the only reason the auto sales industry is so complicated is to protect the consumer against corrupt dealers and crappy product.

[Animal]

As far as freight charges, they are the same for every dealer.The parent company sets the rate on an average.It does not matter whether, say an Intrepid, left the Brampton plant and was delivered to a Brampton dealer, Calgary dealer, or a newfoundland dealer. Charges are the same.These charges can't be altered.

The charges that piss me off are the administration charges.Who cares about the administration or the owners cottage.This is a ploy to get more money from you.
If you are selling cars the licensing and paperwork is part of the business.Don't tell us you have to charge for it.If you do at least hide it in the price and not out in the open as a slap to our face and intelligence.

[tillithurts]

Salesreps in this industry are useless. Most don't know squat about the products they sell (Ask a technical question about any model in the showroom and see what kind of answer you get). The only thing that they are there for is to put their sales training in action to entice the ignorant or gullable. If you know what vechicle you want and which options, it all comes down to price. Again you are shown some meaningless numbers and your only option is to compare the same model at different dealerships for the best price. God I wish we could lose the salesreps and have a fixed price list and let competition dictate a fair market price. The only thing you need to do after is arrange the best financing available. Each and every time I purchase a new vehicle, I dread having to deal a salesrep. You know they are trying to screw you the minute they lay eyes on you.
I know I am going to get flamed buy the various dealers and salesreps for this so I'll respond now by saying this..... get a real job.

Shall we talk about insurance now?

[Toad-O-Line]

The thing that bothered me about purchasing a new vehicle was after the deal was done they tried to tell me that they had my vehicle in stock but it had extra options on it & it would cost me $1,500 more.

I politely told them to forget it & that I would gladly cancel the deal. After badgering back & forth they finally gave the extra options to me for about $50 (Yes, it was that much of a difference).

What gets me is this. If I was hired to paint your house using this color and it would cost $X, how could I go back to the client and say "I ran out of that color so I chose a different color & the paint was more expensive so you owe me more money".

I do realize that if I had asked for a special or rare option that my waiting period could be a long time, however all I requested was the standard upgrades - Which to me should have been quite easy to fulfill my request.

[mr. x]

a few comments:

1. i have walked away when the dealer wouldn't meet my priice - they never call to follow up or offer a better deal.

2. salesmen will say anything to get you to go to the dealership - they will lie or withhold information (such as if the car was already sold). they figure that once you are in front of them, they can close you - and if they are honest they gain nothing.

3. rustproofing is a scam if you buy it from the dealer-becauseof manufacturer warranties and high mark-ups. however, on OLDER cars it may make sense to use an oil-type rustproofing (the type that drips when new) - or to at least buy some stuff at canadian tire and spray it on yourself inside the wheel wells and on the floor pan just behind the wheels.

4. if you are buying a car in high demand, beware of this scam: the dealer will call you and say that they have a car identical to the one you want, but the deal fell through with another buyer - however, the car they have has rustproofing or other options on it that are already installed.

5. if you are buying a car that isn't right there on the lot, make the deal conditional on them devilering the car you want within 30 days (or less). they figure that they they have you hooked, they can switch you if they can't get the exact car you want. they will try to get you to take something different (colour, options,..). often they think that they can do a dealer trade, but do not always believe it! and in any case, they often have 90 days to deliver the car - so you are at risk of losing your deposit if they don't deliver, but you find the car you want at another dealer.

6. the manufacturers have be reducing the margin between the list price and what they charge the dealers - the dealers have resorted to adding on things like "administration fees" and such as a way of making up for it - so beware of these extra charges that they use to "nickel and dime" you.

7. leasing is dangerous if you do not know what you are doing. find out in advance what the lease rate (i.e., the interest rate) and the residual (buyback) amounts are before you go in to negotiate. then find a website (or financial calculator) to figure out exaclty what the real price is that you are paying.

8. the saleman is not on your side - he is only a go between between you and the salesmanger, who makes all the decisions. in the end, deal with the sales manager directly if you can.

9. one of the things they try to do is to make you wait endlessly - they try to wear you down by making you wait in a little office, and the constant back and forth offers and rejections. to avoid this, go in just before they close for the day. an alternative strategy would be to refuse to negotiate. tell them to meet your price, or else you will try another dealership.

10. REMEMBER_ just because you buy a car at a dealership - you do not have to get it serviced there. if you go to dealerships that are far from where you live, they might go the extra mile because they are at a disadvantage in getting your business.

11. do the research beforehand - sheck out websites. get the CONSUMER REPORTS ANNUAL AUTO ISSUE - it comes out every March (its the April edition) to get info on which models are most reliable.

12 you might consider trying CARCOSTCANADA.COM. it costs very little and you can get the dealer invoice prices, and in addition you can get quotes from selected dealers with no obligation to buy.

[Bacchus]

Read Consumer Reports and follow their advice and you can not go wrong.:)

[mr. x]

torontojohn:

your point nmber 4 is dead on.

karatekid: see above. plus remember this: many people will not shop around - the dealer figures that because they are the closest dealer to where you live, that they are naturally going to get your business - and so they will be less willing to give you a great deal.

i have bought 2 new cars in the last 5 years - i live near the 404 - and one i bought in whitby, the other in brampton. i found the least competitive dealers were the ones in the city core!


on another subject - 0% financing is legitimate- assuming it is from the manufacturer. 0%, or low interest rates on used cars is a scam.

where 0% factory financing is a scam is that taking the cheap financing means you do not get a cash rebate that you would otherwise get - in this case the real interest rate turns out to be 5 or 6%, at the least.

beware of a few things - sometimes you will see local dealers, or groups of dealers, offering something like 0% or some special deal - but often it is just the dealers themselves just doing a promotion - in the end you will not save any money - its just that they are agreeing up front to a discount that you otherwise would have to haggle to get instead of them just advertising the list price.

factory invoices: the factory invoice they will show you is usually real - the thing is that often the dealers get other incentives on the car that you can never know about for certain.

regarding new models - it is often a good idea to not buy a car in its first year of production - but this is mainly if the car is based on mostly new engineering (if they have just changed the sheetmetal, or have based it on the running gear of another car already in production, you are probably safe). for example, ford has had lots of problems with the focus, which was entirely new to the north american market.

going back to consumer reports, you are best to buy a toyota, honda or subaru - these cars have the highest reliability ratings, and have very high reslae values (which means that if you look to buy a used one, you might be better with nissan or mazda).

one last thing - before you buy a car, call your insurance company and find out which of the cars you are looking at will have lower insurance costs. integras, GTIs, many SUVs, Mustangs, Camaros and other sporty or "in demand" cars tend to be expensive - insurance is relatively cheap on bigger american cars and on station wagons or other less glamourous cars.

[james t kirk]

Interesting thread.

I bought 1 vehicle on a 0 percent one time from ford.

There was no two price system in place.

There was a window invoice on the vehicle which we negotiated to a price that i thought was acceptable. We were a few hundred bucks apart and i said, "It's a deal if you throw in a set of delux floor mats"

Which he did, I was happy.

All in all, it wasn't that bad of a situation.

Maybe i am just lucky.

One thing to consider that no-one has mentioned here.

No salesrep out there is going to get rich selling cars.

It would seem that your best bet is to find a car the dealer has on the lot and try to get him to come down as much as humanly possible. It's the great canadian way.

Don't bother with rust proofing or an extended warrantee or any other goofie add ons.

In a related scam, anyone ever go to future shop to buy a TV or VCR, they always always try to upsell you on this extended warrantee BS.

"Oh, the factory warrantee is 1 years, but spend another hundred and 20 bucks, and we will warrantee your VCR for another 2 years on top."

Puhleeze, my VCR is either going to buy the farm in the first year or it will probably last about 5 years without any problems.

And when it finally does pop its clock, i will just throw the damn thing out, because by then it will be a boat anchor anyway.

I love these guys at the future shop, they must try to upsell you 3 times on that warrantee crap.

"Would you like to purchase the extended warrantee sir, it gives you the added protection of another 2 years warrantee"

"No thankyou"

"And how will you be paying for that today sir?"

"Visa"

"Are you sure you don't want the extended warrantee?"

"No"

"We offer a free head cleaning service with the extended warrantee"

"You mention that one more time and I am out the F-ing door"

"Enjoy your new VCR sir"

[mr. x]

kirk:

i agree completely on the extended warrantee thing... one thing to remember is that if you put the purchase on certain credit cards, the credit card company will provide you with free extended coverage... check through.

some premium credit cards also provide you with insurance on rental cars and other benefits...

example -

CIBC Gold Card gives you maximum peace of mind and security
Most new items charged entirely to your CIBC Gold Card are covered by Purchase Security and Extended Protection Insurance*, which replaces, repairs or reimburses you if the items are lost, stolen or damaged within 90 days of purchase.
Purchase Security and Extended Protection Insurance doubles the manufacturer's original Canadian or U.S. warranty up to one additional year on most items purchased on the card.


btw - i have no affiliation with cibc - i just picked them at random
so, its a good idea to keep track of this stuff!

[ed_lepps]

Great Thread. Here's my 2 cents worth.

I have a few ground rules that I always use with salespeople. When I go into a dealer, I tell him honestly and quickly that I know all about the 'system' and will be purchasing on my schedule, not his.

I don't want ANY options...period! No rustproofing, no extended warranty, and no scotchguard! Don't make me say NO twice or I buy from someone else.

I don't care how you work the numbers out and I don't care if you think my purchase price is fair. Profit is your problem. I'll tell you what I want to pay as a bottom line, you go to the sales manager and figure out if you want to sell it or not. If the answer is no, I'll find someone who does want to sell their product.

There is no limit to how much time I'll take and I won't wait in your little 'office'. I generally tell him that I'm working so I'm getting paid by the hour and he may find me wandering the lot returning calls on my cell phone. In general, I have all day so if he doesn't want to waste alot of time without making a sale, he should go the extra mile.

The last thing is my favorite line when buying a car..."What do I have to do today to get you to sell me this car?"

[shack]

The way I look at extended warranties is that they are selling them to make a profit. They know that, on average, whatever you're buying will cost less to repair than you pay out for the warranty, otherwise they wouldn't offer it. It's not going work out that way in every case, but the odds are in your favour without spending the extra.

[james t kirk]

How does a 7 year old thread come back to life?

[DistantVoyeur]

Strongbeau is bored again. Happens once in a while.....

Either that or the DTR sprung a leak. :)

[buckwheat1]

Buy GM

[red]

whatever happened to Toad O Line

[daboy]

Why not just offer $500.00 over the invoice cost which includes freight dealer prep. but excludes any management fee.
db

[Larry_Fyne]

I bought a book over 20 years ago called "The Single Price Solution". It had the rules for buying a car at the best price. In a nutshell, do research first as to what you want - it was suggested that you go to a number of dealers for the research, do test drives, etc. Do not commit to any sales rep and only take notes.

After doing your research, pick 2 or 3 dealers and make an appointment to meet with a sales rep. Make sure that you are on time for the appointment. Tell the rep what you are interested in and give him/her a written spec of what you want. This should be specific as possible. Then tell the rep, that you are going to buy a car in a certain time frame (ie. 24 or 48 hours). They will be give 1 chance to provide you with their "single price". You explain that you are doing the same thing at the other dealerships (don't tell them who) and they all are working to the same spec. Tell them you will contact them at the deadline to get their price and then you will go with the lowest price. Then leave.

Then do what you said you will do. At the end of the process you will have 2 or 3 quotes for the same vehicle. If there is any deviation from the spec, their quote is void.

This eliminates the back and forth, eliminates the extras and it gets you what you want. You must be diciplined to go throuigh with it.

Obviously this works best with vehicles on the lot - not orders.

It works though.

[Dark Chimera]

Just another comment about rust proofing....

It's a huge scam.

It's NEVER been proven to work.

In fact, all new cars carry a perforation (holed through) warrantee which is usually in the area of 6 years.

Do you know if you get your car rust proofed on day one, you void your factory warrantee (albeit, the rust proofer's warrantee now takes over)

I don't know about you, but i would rather have a GM warrantee than a joe blow rust proofing company warrantee.

You have to watch because sometimes these guys have weasel clauses written in that says if you don't take your car in for some sort of rust proofing servicing, then their warrantee is void.

Most cars today have steel panels that are corrosion protected by one form or another.

My car is now 5 years old (GM) and was never rust proofed when purchased new. I was underneath it the other day and other than the odd clip, there is not a spec of rust on the under carriage.

I find rust proofing to be a sticky gooey mess that hardens with time and then cracks at the stress points.

Water gets into the cracks and sits there or travels underneath the rust proofing making it even worse.

The best recipe for a rust free car is a clean car. Wash the wheel wells frequently (hopefully with fresh rather than recycled water) in the winter, as well as underneath.


Oil based rust proofing works by travelling along the steel. Over time it will cover all the steel. I suspect you are thinking of Crappy tire goo

[Chairmoon]

What's going to happen to warranties on older models if GM goes bankrupt, is the government back-stopping those to?

[CapitalGuy]

I now only buy slightly used cars, say 2 or 3 years old, non-rentals or fleet cars, with some warranty still on them. But I once bought a custom order Ford Explorer. I went in with all the options I wanted, and went to numerous different Ford dealers to see what price they would offer me. I got what I thought was a fairly good deal from the second dealer I saw. The next 4 dealers all refused to meet the second dealer's price. When dealer number 6 said that the second guy was making only about $200 off me, I went back to the second guy and finished the deal, as I was confident that the price he was asking, was reasonable.

Is there a lesson there? Maybe that if you shop around, you can figure out what the best price you're going to get for that particular vehicle is. The lesson I learned was, don't ever buy new. Slightly used, if you've done your research and shop smart, is the way to go. And keep it for 10 years.

[AJstar]

Car Cost Canada will give you the dealer costs as well as factory incentives avail. etc. I recently tried the 'one price solution' via email for tenders. It didn't work. The sales staff refused to put lower bids in writting. Knowing the #'s from CCC gave me an even playing field,instead of the ridiculous 'make me an offer' routine they usually play.

[tboy]

I now only buy slightly used cars, say 2 or 3 years old, non-rentals or fleet cars, with some warranty still on them. But I once bought a custom order Ford Explorer. I went in with all the options I wanted, and went to numerous different Ford dealers to see what price they would offer me. I got what I thought was a fairly good deal from the second dealer I saw. The next 4 dealers all refused to meet the second dealer's price. When dealer number 6 said that the second guy was making only about $200 off me, I went back to the second guy and finished the deal, as I was confident that the price he was asking, was reasonable.

Is there a lesson there? Maybe that if you shop around, you can figure out what the best price you're going to get for that particular vehicle is. The lesson I learned was, don't ever buy new. Slightly used, if you've done your research and shop smart, is the way to go. And keep it for 10 years.



As with all things, there is a caveat to this statement:

When you buy an older vehicle, you're buying older technology ie: newer vehicles are more fuel efficient and in the case of the F150, the '09s have more HP with better mileage.

There are some new vehicle that come with a 10 yr power train warranty.

Before deciding to buy used or new, calculate what repairs will be required over the 10 yrs and after the warranty runs out. Just one transmission problem or engine failure could mean the difference between saving the depreciation on a new vehicle over the RSP of a used vehicle.

I went out to purchase a used truck and the ONLY way it was more affordable was if you were paying cash. If you were financing any of the purchase it was cheaper to buy new. This is due to the 0% financing on new vehicles and 10% +/- on used. For eg: 10% on $20K used vehicle is about the same as 0% on a $30K vehicle over 5 yrs.

[james t kirk]

Oil based rust proofing works by travelling along the steel. Over time it will cover all the steel. I suspect you are thinking of Crappy tire goo

No, I'm thinking of anything except a factory corrosion prevention system.

It's ALL crap IMHO. All of it. It all voids your factory warrantee as far as I know.

[james t kirk]

Car Cost Canada will give you the dealer costs as well as factory incentives avail. etc. I recently tried the 'one price solution' via email for tenders. It didn't work. The sales staff refused to put lower bids in writting. Knowing the #'s from CCC gave me an even playing field,instead of the ridiculous 'make me an offer' routine they usually play.

Ditto that.

There are Factor to Dealer "Incentives" that are not shown on the invoice that the Dealer will so willingly show you.

That said, the Dealer does need to make a reasonable profit on the vehicle.

I believe CCC recommends that you take the wholesale price, add 3 to 5 percent markup, then subtract all Factory to Dealer Incentives to come out with a "fair" price.