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Posted this on Miata.net, but I'd really appreciate input from here as well...

Here's a question about how dealers work... I bought my Miata in 2000 from a dealership in Greensboro, NC, and got it for $200 over invoice. Larger town, lots of competition, and some really good deals.

Here's my question: If you order a car from a dealer, isn't that essentially an "extra sale?" IE: The car spends no time sitting on the lot, there's no time spent letting 10 people test drive it, etc. I'd think the costs associated with selling the car are a fraction of one that sits on the lot for a month, right?

When I was looking at a Mazda 6 today and I mentioned I'd be willing to order, but that I'd want a good deal, the salesman said "they're in high demand, so we're only cutting a few hundred dollars right now."

Now, if I'm ordering from the factory, I wouldn't think demand had anything to do with it, right? It's not like he's selling me a car cheap that he could leave on the lot and sell to someone else for more. He'd essentially be ordering an extra car in this case, with a guaranteed sale and little time spent.

So shouldn't he be willing to deal, even if the car is in demand, if I'm willing to sign the papers and put money down for a custom order? Three of the five Mazda 6's they had on the lot a few weeks ago are still there, so it's not like they have a waiting list.

Background:
The local Mazda dealer here in Vermont typically marks cars at retail and will come down a few hundred dollars. When we bought a Saab 9-3 from the same dealer in 2001, the salesman looked like he was going to have a stroke when I mentioned I knew about the $4,000 promotion that Saab was running. These guys are typically used to getting close to retail -- Vermont's not the most populous or competitive state. We did finally get them to come down to the price we wanted to pay on the 9-3, but only after we'd said "no" and practically signed a deal with an out-of-town dealer. Gack, I hate the whole negotiation game. (Which is why I got the Miata in NC -- the guy just gave me a killer price right away, so I bought a plane ticket, visited friends in town, and then drove it home.)
 

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Replying to Topic 'Ordering a 6 and pricing'

QUOTE
Originally posted by DennyA


            Posted this on Miata.net, but I'd really appreciate input from here as well...

Here's a question about how dealers work... I bought my Miata in 2000 from a dealership in Greensboro, NC, and got it for $200 over invoice. Larger town, lots of competition, and some really good deals.

Here's my question: If you order a car from a dealer, isn't that essentially an "extra sale?" IE: The car spends no time sitting on the lot, there's no time spent letting 10 people test drive it, etc. I'd think the costs associated with selling the car are a fraction of one that sits on the lot for a month, right?

When I was looking at a Mazda 6 today and I mentioned I'd be willing to order, but that I'd want a good deal, the salesman said "they're in high demand, so we're only cutting a few hundred dollars right now."

Now, if I'm ordering from the factory, I wouldn't think demand had anything to do with it, right? It's not like he's selling me a car cheap that he could leave on the lot and sell to someone else for more. He'd essentially be ordering an extra car in this case, with a guaranteed sale and little time spent.

So shouldn't he be willing to deal, even if the car is in demand, if I'm willing to sign the papers and put money down for a custom order? Three of the five Mazda 6's they had on the lot a few weeks ago are still there, so it's not like they have a waiting list.[/b]
If you order from the factory the dealer gets what is commonly known as a holdback. The holdback is basically fre money to the dealer that will let a car float or sit on the lot without the dealer losing money on it for roughly 90 days. If the dealer sells the car within 90 days they get whatever is left of that holdback. Anything after 90 days and the dealer is having to pay out of his pocket for the car to sit on the lot.

However, if you order the car and pick it up day 1, the dealer gets 100% of that holdback. Sometimes this may give you leway talking to the dealer and sometimes not. The holdback is not part of the salesman's commission and is only given straight to the dealer so it may be tough to talk them down. Just work with the dealer all you can... Tell him you've been shopping around town and out of state. If worse comes to worse, tell the dealer you have a quote for the car that you want for $500 over invoice (give them the number) and they will work from there.

And if you don;t like wahts being thrown at you.. just leave.. They will eventually wake up and realize that if they want to sell you a car you have a set rpice you're willing to pay or you're going elsewhere. They would hate to lose a customer for a couple measely hundred bucks.

_Abs
 

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Replying to Topic 'Ordering a 6 and pricing'

You are right... small town, little competition, little room for dealing regard less your arguments (ordering from the factory or other). In such case, it comes to your ability to negotiate. Unless you are in the sale business yourself, dealer negotiate everyday for car. We only negotiate for a car once every 5 to 10 years. They have more experience at dealing then many buyers. I thing it is part of the cost of living in a small community (the other side of large cities, there is also a cost: polution, traffic, housing cost, etc).

What you can do, is to be prepare to make a trip to a large city, buy it there (if the cost difference worth it). Your local Mazda dealer will have no choice to honor the warranty if your car break.

Anyhow, good luck
 

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Reading Topic: Ordering a 6 and pricing

I live in a small town 100km from anything and I don't have time to drive all over the place. But buying a car is a big decision so I came up with a plan. I checked the forums and got an idea what would be a good price and then visited a few dealers.

My strategy for buying a car is pretty simple.

Select 3 dealers that are within an hour or so. Go visit them tell them you are taking quotes. Wrtite down the exact options you want. Let them come up with a price. Ask them if they can do better. Give them an idea what you expect to get it for.

Simply, make sure that they know if their price is not the best you won't be buying there.

I found this to be a very stress free way to buy a car. 90% of dealers will give you a reasonable price this way.

Remember no matter what they tell you, the salesman will want the sale for himself and will try and get it.
 

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Reading Topic: Ordering a 6 and pricing

That's a good call, solarbear. One of my favorite bargaining methods is pretty much what you said. Go in, tell them you are visiting each dealership once. The one who gives you the best price will earn your business. It's a no BS approach.
 

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Reading Topic: Ordering a 6 and pricing

Some dealers are willing to deal and some are not. Some will say they are in high demand and some will give you a good price anyway. I have found several no hassle dealerships that sell all their vehicles at 400-500 over invoice. That's how it should be. I don't see the point in arguing for a better price from some stickler. Take some printouts of deals elsewhere even in other states. Tell him to meet it and if he gives you any crap, leave. Unless your car is broken down always walk away till you get exactly what you want. First on the block means nothing.
 

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Reading Topic: Ordering a 6 and pricing

I go one better and bring in a printout from the net listing all of the dealers in the area carrying the car I want (I don't show it to them, but I make sure they see it, if you know what I mean). I also bring the bank draft/cashier's check to let them know I'm not fucking around. Make it obvious that you're prepared to leave and not come back. Then ask for their best price. You'll note that they don't fuck around.

This works best in big cities (I live in Chicago). There are about 20 dealerships in this area, so the pricing is very competitive.
 

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Reading Topic: Ordering a 6 and pricing

The way I see it 2 sales is always better than one for any salesman.

Luckily, I got the exact price I wanted from a dealer in a small small town, because he knew that if his price wasn't good I wouldn't be back as he was the furthest from where I live.

The best thing about that strategy is that alot of dealers will call you the next day with a better price. And if you are not a good haggler, I'm not, it really puts the pressure on him.
 

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Reading Topic: Ordering a 6 and pricing

Yes, that's happened to me. Don't be afraid to walk. I've had dealers call me after I left to make a deal.

I used to work in sales, too, and I'd never bargain until the customer was literally on his/her way out the door. Why bargain if you don't have to?
 

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Reading Topic: Ordering a 6 and pricing

I reckon just taking a quote and going home is the absolute best strategy in the car game. They always take your number so they can call you back.
 
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