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21 Oct 08 Best Time to Buy New Cars with Most Discount? (2)
You might want to ask that how does a car shopper know if there is volume bonus on certain car since mostly no website would advertise those hidden incentive. Some car dealers might disclose it to car shoppers during the negotiation when they are walk in store, sometimes it could be guessed by the quote or email sent from car dealers. The best way to know it is share and discuss with other car shoppers here because car dealers mostly would give you part of the information as they claim they are never lying. Once there are many car shoppers share the information here, the full picture might be able to be assemblied and we would also try to get information for our members.
Volume bonus usually get calculated at end of a month, or more precisely, the first monday after the end of the month. For certain date it might get extended but that’s the generall corect. Therefore, the best time to shop for a car is at end of the month. How to get a car in 30 days gives you a good example on what you need to do at certain points. Closing deals at start of the month is what car shoppers might want to avoid as even though there is room, it is hard to negotiate the price.
Another part of the discount for auto purchase is the incentive being given out directly from auto makers that is based on the car being sold, not the quantity. The form of this incentive could be to dealer, and/or to customer. Car manufacturer normally give out the max incentive when it is the end of the model year and end of the model generation. It usually happens in summer as new cars are coming out at between September and November. However, since the longer you wait, the cheaper the car price is, you could wait until even the next model year comes out. Make sure you are monitoring the car inventory as the later you purchase the car, the less choices you might have. For example, my friend got an 06 Mazda in Feburary 2007, and there are still plenty choices. However, another friend of mine bought a Honda in July 2006, while there were only 1 left after his purchase. Therefore, in order to recieve the best discount from auto makers, you should wait as long as possbile. In other words, you are competing with leftovers that the more inventories there are, the better discount you expect to get from manufacturer.
Discounts for car price are from both car dealers and auto makers. There is no certain date or time frame that you could get the best deal. Dealer discount and incentive from manufacturer could increase and decrease at the same time, but they are not required to be the same. In order to get the best discount for the car, you need to spend time to track inventories, dealer discounts and incentives/rebates in order to get the best car prices. The best time to get the best car deal is at the point that the max discount were given for both car dealers and car manufacturers. We are here to help to get a good deal, and we would like you to join us as well.
Tags: Car Buying Tips
08 Oct 08 Best Time to Buy New Cars with Most Discount? (1)
It is one of the most common questions being asked since everyone would like to get the best deal on car purchase. This question can be answerd by an easy way, and it can be answred in complicated way, too. Both answers will be given in this article, so you would be able to get both.
Here is the simple answer - The best time to buy a car is at the time both car dealers and car manufacturers would dump the cars, while you are not hurried to get the car. A little bit too simple, right? However, the answer is that simple, and that’s the simple answer.
You might feel a little confused here, and it is why we would give you the whole picture. Economics 101 says economics is based on demand and supply, and since car sales is an economic activity, it is exactly same. When a party wants to sell something, they would sell it for cheaper. On the other hand, if a party wants the item, then you would buy it for higher.
Normally, both car dealers and car manufacturers want to sell cars. However, due to difference of their goal, different approaches might be implemented. Keywords for purchasing new car is what we suggest you to read in case you have questions about terms being used.
Car discount can be from car manufacturers and car dealers. The most common way for car manufacturer to promote their cars is to give out money (cash). The money could be given directly to car dealers or to car shoppers (customer rebate). Customer rebate is pretty straight forward that if a car shopper purchases certain car and take delivery within certain date, then car shopper will get it.
For car dealers, there are many tricks out there. By the reward dealers are entitled, there are two kind of money. One is based on each car being sold, which is normally a flat rate. For example, as for now, for all 2008 Honda Accords, there is a well-known $500 dealer cash on the car. The other one is volume bonus, which is the key to determine if you could get the best car deal most of the time. Volume bonus is given when the car dealer reach the sales goal set by manufacturer (or their distributors for some brands) on certain cars (or could be number for all models). For example, let’s say a dealer could get $300 for each car they sold when they reach 1000 cars by end of October. Assume today is Oct 29, and the dealer have sold 980 cars, and if they sell another 20 cars in 2 days, they would get additional 300*1000=$300,000 on top of everything, which means the rest of the 20 cars potentially worth 0.3M for them. If that’s the case, congradulation! You hit jackpot becuase they would beg you to deal with them even it means they would make as little as possble on that one car sold to you.
Sounds exiciting? There are more..
Tags: Car Buying Tips
28 Sep 08 How to Get Best New Car Deal in 30 Days Without Headache (2)
17th ~19th of the month
List cars you would buy with a specific price after evaluation. For example, for some people, moon/sun roof might worth only a $300 because they do not really care, even though the price difference could be $1200. Therefore, assuming you would pay $15000 for a car without moon roof, and then you would pay $15300 for the exact same car with moon roof. After finishing the list, it is time to collect quotes and prices from car dealers.
18th~25th of the month
Use email address (es) that you do not mind getting tons of messages to ask for car quote on your list from as many car dealers as possible, even for those from 300 miles away if you wish. The reason to collect car prices from dealers 300 miles away is price could vary a lot if you are in a location with only a few dealers there. For example, there are only 2 local dealers within 20 minutes of driving distance for the car you are looking for, they would give out higher price to max put their profit. However, there might be a dealer 100 miles away with competition and would sell you for the same car for $1000 cheaper. Would you drive 2 hours to save $1000?
Have them beat the lowest car quote you got minus 500. Most dealers would try to make you feel like a clown by laughing at you. Car salesperson would use things like, “I would pay the amount to buy 10 cars from you”, “The dealers quote you are lying”, or “Once you find out you are lied please contact me” or things like that. Take it easy, salespersons’ job is to make the most money possible and most people love money. Response them with “please keep me updated” or simply reply them with “Thank you” politely. After your reply, some dealers might lower their prices and some car dealers might beat the price you offered.
Report the prices and quotes after initial conversation to CarPriceDatabase.com pricing system, and discuss your experience and pricing to forum members as other people might be looking for the same car in your area, and it would help all members to spend less time on collecting data. Occasionally you would find that all the car prices and car quotes you got are not good. Sharing your car information is important here as the more information you gain, the fewer amounts you would pay. With all prices you have got, you would have a magic price for each car you are looking for.
26~28th of the month
You would have a desired price on the car you are looking for at this point. Walk into the car dealer that let you test drive the car first. The reason is that they were helping you to know the car, so you should give them the opportunity to earn your business. Don’t expect good offer from them, but hold your magic number. If there is no deal, just walk out. You have given them the opportunity to earn your business but they mess up. Go to other car dealers and look for the price you are willing to pay. If you get the car at the price you want, congratulation! Your car shopping is almost done. It is ok if you don’t get your car, as not everyone is lucky to have deal done that soon.
29th~end of the month
Expect to get calls from dealers after you walk away between 1 minute and 3 days. They could you offer you better prices, but sometimes they do not. Car dealers would mostly ask you to go back to their offices and discuss. Try to get the number in phone and ask them to email/fax you with the all the numbers in case you get hard time after you arrive the office due to some “misunderstandings”. Even if they do not give you the detail, have their manager speak with you and go there to close deal if everything goes well. Wait for other dealers to call you if there is no agreement between you and car dealers. Repeat this process until a dealer would deal with you. In case after all dealers you work with do not give you the price you desire, wait for the dealers o call you again, but raise your target price a little bit to have deal done.
Tags: Car Buying Tips, Car Price
26 Sep 08 How to Get Best New Car Deal in 30 Days Without Headache (1)
Check car price on cars you might be interested in. It is pretty important as sometimes you would find ridiculously huge incentives, rebates or hidden dealer cash going on some vehicles with high MSRP that you usually don’t want to take a look at. With huge discount, you might be able to afford a dream car that you would normally dream about, rather actually own the car. Even if you have made up your mind on some cars or even some trims, check if there are different rebate, incentive or dealer cash available on different trims. For example, if the higher trim of the car you are looking for has a higher invoice price of $1500, and if car maker gives $1000 more incentive on the higher trim, you actually pay only $500 more, or even less due to higher model usually hard to be sold. However, for $500 more, you would get difference of $1700~$2000 in MSRP, which could be sun/moon roof, better audio system, better interior material, bigger wheel and wider tire for only $500 more. Why not going for the higher trim if it is just a little bit higher
It is time for test drive once you target models. Let’s say you are targeting 3 cars after the basic homework. Try to bring 1 or 2 friends with you. The reason you need friends is unless you are able to talk with salesperson while testing the car, you need people to help you handle salesperson so you could focus on what you are doing. Dealers usually only allow people whom they think would buy the car to actually drive the car. However, spending minimum of 15~20k is a huge purchase for most people so money should be used wisely so you would not regret. Therefore, you should make your salesperson feel you would purchase the car today in order to test the car, but do not tell him/her from your mouth. For example, mostly your salesperson would ask you that if you would make purchase today. When you are asked these kinds of questions, tell them you work hard to make money, so you need to test drive the car first before making any decision. Ask car salesperson to let you drive highway if you mostly use your car on highway, and city road otherwise. Keep one thing in mind that if you are given a new car with very low mileage, test what you need, do not abuse the car since dealer might sell the car to other people. However, if it is a car for test drive, just have fun there.
After testing all cars, it is time to think about what car is the one you love. Put price, gas consumption and all other expenses aside, and ask yourself that what the right cars are. Some people might consider the price and all other factors first, but it could have potential problems, which will be addressed later. Does the car#1 have good handling I like? Is car#2 quiet as I am looking for? Questions like these will help you to determine the “best” car for you. The reason not to consider price and all other financial factors is that you have already filtered out cars in the first step, so the candidates are those you are able to afford, even though some might be a little bit harder for you, but you still could afford it. Most people would drive the car for at least 3~5 years, how if you regret the purchase after 3 months, what could you do? There are two simple ways to deal with it. Trade the car back to dealers and purchase a new one or stay with it. If you decide to go with the first option, you would get ripped off badly as new car depreciates a lot. If you go with the latter option, you would hate the car more and more. Hey! You should enjoy your car because you work so hard to save money for your new car and you are not supposed to spend so much money and make yourselves feel bad, aren’t you?
Tags: Car Buying Tips, Car Price
14 Sep 08 Top Keywords You Need to Know Before Car Purchase (4)
Taxable Amount: The amount that is subjected to sales tax. This amount is equal to the “selling price” shown on the invoice with all options either requested by car shoppers or added by dealers. Keep in mind that if there is any rebate on the car, the “selling price” shown on the invoice would be the price before rebates since in some states, rebate is taxable.
Documentation fee, Credit inquiry fee: Let’s save our time. Documentation fee, credit inquiry fee, Prep fee and all other fees are nothing but pure profit for dealers. For some regions, these kinds of fees could be as much as $900 or $1000. Do you really think dealers need $900 or $1000 to do your paperwork? In some States, state law caps doc fee so dealer could not charge more than certain amount. For example, in New York, dealers could not charge more than $55 doc fee in car purchase. However, New Jersey, NY’s neighbor, it is not easy to find a dealer to charge doc fee less than $199, and some dealers even charge $399. Therefore, since documentation fee could be a major difference, in CarPriceDatabase.com database, doc fee is added into total amount when we calculate your CPD amount(will explain later), monthly payment, and car price. It gives a more accurate comparison between different quotes and prices.
Sales Tax: Sales tax is what needs to be paid to U.S government. Basically it is the taxable amount times the sales tax rate. Since it is the amount given to U.S. government, dealers do not play tricks on this. However, make sure dealers calculate the figure correctly. In some states, sales tax is capped to certain amount.
Gas Guzzler Tax: This tax was established in The Energy Tax Act in 1978 that if new cars sold do not meet EPA requirement are subjected to this tax, which is collected by IRS. Gas Guzzler Tax is determined by the combined EPA on your car, which is listed on your window sticker. The amount of the Gas Guzzler Tax is also listed on the window sticker. Keep it in mind that SUV/Trucks are exempted from Gas Guzzler tax according to the act.
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GAS GUZZLER TAX |
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Combined EPA |
Tax |
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Less than 22.5 |
No tax |
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More than 21.5, but less than 22.5 |
$1,000 |
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More than 20.5, but less than 21.5 |
$1,300 |
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More than 19.5, but less than 20.5 |
$1,700 |
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More than 18.5, but less than 19.5 |
$2,100 |
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More than 17.5, but less than 18.5 |
$2,600 |
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More than 16.5, but less than 17.5 |
$3,000 |
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More than 15.5, but less than 16.5 |
$3,700 |
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More than 14.5, but less than 15.5 |
$4,500 |
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More than 13.5, but less than 14.5 |
$5,400 |
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More than 12.5, but less than 13.5 |
$6,400 |
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less than 12.5 |
$7,700 |
Registration Fee: The fee is charged by state department of motor vehicles for your title (ownership) and license plate.
TTL: Title, Tax and Licensing. It is all the money given to U.S. government. Therefore, price before TTL is a good benchmark for the car price as it includes everything dealers try to make from you. Like mentioned earlier, dealer could charge you a huge amount of documentation fee but have a slightly cheaper car price. Price before TTL is very useful when comparing price with people in different area or with different registration and tax rate. Please be aware that TTL is not supposed to include dealer documentation fee. Some dealers might trick you by giving you a price before TTL but then tell you TTL includes dealer documentation fee.
OTD Price: Out-The-Door price. It is pretty straight forward that the amount represents the amount of money you need to pay to drive the car out your door. It includes both the money collected by dealers, selling price, all kinds of fees, options you either want or does not want, and TTL. OTD is very useful when you compare price with people in the same area as they need to pay for the same rate of sales tax, local tax and registration.
In general, there are only two kinds of money you need to pay for your car purchase. One part is paid to government, while the other is to be paid to dealers. Therefore, anything other than TTL is to be given to dealers.
VIN: Vehicle Identification Number. It is a unique serial number for each car. With this number, the history of the car, specification can be identified. Since it is unique, when you negotiate price with dealers, try to get the VIN from them as you could make sure they do not make any “mistake” to quote you the wrong trim or even model. Besides, you could use that VIN to request insurance quote for a very accurate quote.
Tags: Car Buying Tips
11 Sep 08 Top Keywords You Need to Know Before Car Purchase (3)
Volume bonus: Most of the time, car dealers not only get money by selling the car and get the difference between their “cost” and the price they sell the car. They also get bonus when they reach certain number of sales set by car manufacturer. The amount of volume bonus could vary from a couple hundred dollars to thousands of dollars per car, depending on the model and manufacturer program. Sometimes the money is paid to store manager.
For example, in summer 2007, one major Japanese auto maker had a program that after the dealer reaches certain amount of the mid-size sedan being sold, sales manager could get additional money for each car they have sold within the time frame. Another example is that rumor said a Europe car maker gives a free car to dealers if they sold two of the same model.
Most of the time, you will not find information of volume bonus as it is secret money that dealer could make. In order to help car shoppers to get the best deal, people should share information they got with all of us.
Spin game: The award for this game is usually given to salesperson from manufacturer. After salesperson sells you the car, which means you and dealer finish paperwork, salesperson could enter your VIN and let manufacturer know the car is sold. Once salesperson reports to the automotive maker, you can imagine that there is a computer spin game in the system and your salesperson uses your VIN as the “coin” to play the game. Even though they know what awards are available, they do not know which award they would win. The awards available could be cash or gifts. Since it is not certain for dealers to get the money, dealers have another excuse to exclude this money from their “cost”, and tell you they lose x amount of money by selling you this car.
Hidden/unknown Incentive: The reason they are hidden is you don’t find it on major automotive site, and only car dealers and salesmen know about it. The amount could be very huge, for example, Nissan currently has $5000 incentive on 08 leftovers. You cannot see it on most car sites, but we will try to get the information either from our source, or readers like you. With your information we could analyze them collectively so people would get better deal.
Tags: Car Buying Tips
11 Sep 08 Top Keywords You Need to Know Before Car Purchase (2)
Holdback: Holdback is the money that manufacturer help dealers to pay for the interest for cars on their parking lot. Most car makers provide dealers holdback and most of them are from 1%~3%, depending on the car maker.
Rebate: While there are many different kinds of rebates, they can be grouped by the party gives out the rebate and the party receives the rebate. Mostly, you could see three kinds of rebate which are manufacturer-to-dealer, dealer-to-customer and manufacturer-to-customer. Manufacturer-to-dealer rebate and dealer-to-customer rebate are not covered here since manufacturer-to-dealer is covered under “Dealer cash/Market Support/factory incentive”, and dealer-to-customer rebate is just a trick for dealers as they are just giving out discount. The Manufacturer-to-customer rebate is different than other discounts (dealer cash, market support…etc) due to mostly the amount is taxable as the rebate amount is considered as part of the purchase price. For example, if you are purchasing a Toyota Tundra, assuming there is $6000 rebate on this truck, the agreed “selling price” is $25000 you are actually purchasing a $31000 truck and receive the $6000 rebate separately. Therefore, taxable amount is $31000, which costs you $420 more assuming your sales tax rate is 7%, instead of the tax on $25000.
Dealer Cash/Market support/Incentive: These terms are used by several automotive sites to show the money given to dealers if certain model is sold. Mostly, the only criterion is the car must be delivered to customer within a given period. The difference between this category and rebate is since money in this category is passed to dealer directly, the dealer cash amount would not be taxable. Compared with rebate, assuming there is 5000-dollar dealer cash on a car, you are actually saving $5,000assuming dealers pass the whole amount into customers. For the same amount of rebate, you are actually saving a little less as you still need to pay for the sales tax on the $5000. However, since dealer cash/market support/incentive is not listed on invoice signed by car shoppers, dealers are not required to give to customers so it becomes pure profit to dealer. There is no other way to determine if there is dealer cash but to check automotive sites. Even though some websites give you the information, they do not tell you all even they know. The best way for car shoppers is to share information as discussing the strategy to fight in order to get the best deal, and it is the reason Caroricedatabase.com is established.
Tags: Car Buying Tips
10 Sep 08 Top Keywords You Need to know Before Car Purchase (1)
In order to get a good deal on car purchase, people need to know what those terms before doing their “homework” as knowing those keywords will help you understand what people are discussing, and how car salespersons play the games.
Destination: Sometimes people called it as freight, but they are the same thing. Destination charge is the expense that manufacturer pays to deliver the car to dealers.
MSRP: MSRP is the brief of Manufacturer Suggested Retail Price, which is the price set by automobile maker that they “suggest” the car should be sold for. MSRP could be defined in two different ways. One way is to include the destination charge, while the other doesn’t . Due to the different definition of MSRP, it is common that dealer would trick car shoppers by telling them a price then when they get to dealer or sign the contract, salesperson tells car shoppers that the price agreed does NOT include destination fee, then they would add another $500~$800, depends on how much the destination charge is. Usually, car price should be less than MSRP. However, since it is all demand and supply, some dealers would mark up the car by a couple thousands and for some the markup could get even much higher.
Invoice: Invoice is the price that dealers pay for the car at the point they receive it from manufacturer. Technically, invoice is the “cost” of the car when dealers receive the car. The reason “at the point they receive from manufacturer” is mentioned is that even though dealers pay for the “invoice price”, they will get different forms of money back after they sell you the car. Invoice price has different definition. Some car makers charge refundable fees such as advertising fee, port fee…etc so dealers are able to honestly increase their invoice price. All these fees are charged to dealers, but after a period of time, money goes back to dealers. It is the reason that dealers’ invoice price is usually different than the invoice price found on internet. Besides those fees to inflate their “cost”, dealers still get holdback, rebate, bonus, award of spin games and all other money after they sell the car. Therefore, at the time they negotiate the price with you, they are telling you the truth that they only make certain amount (or lose certain amount) by selling the car to you at x amount below their cost or they lose money to make the deal. Car Dealers are so good at telling the truth huh?
Tags: Car Buying Tips
