Last post on Mar 14, 2013 at 8:32 PM
You are in the Prices Paid - Buying & Leasing Experiences
What is this discussion about?
Car Buying, Car Leasing
#42 of 45 Re: Naive about Leasing [paperboyccc]
Mar 13, 2013 (4:10 am)
Truecar does not provide the lowest price possible for a vehicle. Truecar is a good place to start but the price a person pays should be lower. At a minimum, a buyer should reduce the Truecar price by about $300, to account for the money dealers pay Truecar for each sale.
Truecar prices are essentially set by the dealer. While they may appear low they do not reflect any negotiation which usually results in a better deal.
Carwoo is a better choice as it allows buyers to negotiate with dealers without disclosing personal information.
While much of the preliminary negotiation can be handled over the internet or phone, the best deal will almost always be attained via a face-to-face negotiation with the dealer.
The car buying process is indeed arduous. But it is equally difficult for the sales person who does not get paid if the buyer does not buy. In that regard the buyer has the upper hand.
The buyer can always walk to another dealer. However, the sales person knows if a person walks they will not likely return. If the sales person believes a buyer is ready to leave most sales people will immediately provide a better price. Feet are a buyers best negotiation tool.
There are no dealer fees which are mandatory. Dealer fees, by definition, are set by the dealer and are part of any negotiation. The only mandatory fees are those set by law or regulation.
It really accomplishes nothing to attempt to hide things from the sales person such as a trade in vehicle. Sales people sell for a living and they deal with every imaginable type of buyer.
To get a good deal identify the invoice price of the vehicle, any incentives available to both to the buyer and the dealer, dealer holdback, and use Edmund's forums for prices paid information. A good method to arrive at a price goal is to take the invoice less incentives less holdback and add a few hundred for dealer profit.
Research the trade value using Edmunds, KBB, and NADA. Taking an average of these three is a good approach.
Research the credit profile. Credit Karma is a good site to obtain a free estimate of a credit score.
With the right information a person can always get a very good deal.
#43 of 45 Re: Naive about Leasing [paperboyccc]
Mar 13, 2013 (4:15 am)
Almost all advertised lease deals for an unusually low monthly payment requires a considerable CAP reduction. You cannot lease a $60K vehicle for $350 a month with such a reduction.
#44 of 45 Re: Naive about Leasing [billy3554]
Mar 13, 2013 (4:38 am)
That is true. It is simple math. If one leases a $60K vehicle and the residual value is 60 percent the amount which needs to be paid during the lease is $24,000. If a person negotiates the price to $56K, the amount is $20,000. Over a 36 month lease the monthly payment for this $20K is $555. The actual payment would of course be higher due to the money factor.
Low advertised lease prices are designed to entice people to consider the lease. Anyone who believes they can lease a $60K vehicle for only $350 has not read the small print.
#45 of 45 Re: Naive about Leasing [karhill1]
Mar 14, 2013 (8:32 pm)
Yes, it's simple math. Mercedes was offering vehicles with around 74% residual and 13% off. On a $60K vehicle the amount to be paid in 24mos would be $7,800 or $325/mo plus the money factor. It's not common, but read the E-class thread for examples.
Mercedes never advertised this deal - but several buyers were savvy enough to recognize it and negotiate it.