Avoid Showroom Showdowns
When it comes to car shopping, most of us dread the showdown in the showroom, where you’re forced to dicker with a salesperson who seems to hold all the cards. It’s not that you want to deny the dealer a fair profit; you just want assurance that you got a fair deal. If you hate to haggle, you’re a prime candidate for a car-buying service.
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Get matched with a dealer. Two of the biggest names in car research offer free buying services, but their prices aren’t going to be rock-bottom. For one thing, all offers are presented relative to sticker price, which makes it harder to know how much profit the dealer makes. Savvy buyers compare offers to invoice prices because they don’t include the dealer’s markup.
Edmunds.com, known for its car reviews and pricing advice, debuted Price Promise last year. Edmunds acts as a middleman: Dealers offer you a no-haggle price, but it’s up to you to sort through the offers to pick the best one. Click on Price Promise at the top of the home page, then enter the make and model of the car and your zip code. You’ll see the number of Price Promise offers in your area, and you’ll be able to customize your car and find matching vehicles from dealers near you. To see the price and get a certificate to print out and take to the dealer, you enter your name, phone number and e-mail address. (To see an invoice price, you’ll have to go to the main page for each car on Edmunds’s site and use the drop-down menu to select the trim level you want.) Each offer is tied to a specific vehicle and its exact equipment, so dealers won’t do a bait-and-switch if they don’t have the car you chose.
TrueCar has a similar setup. Click a make and model on the home page and you’ll see the sticker price, average price paid and (in most states) the invoice price—as well as the target price for one trim level (change trims in the “style” box at the top of the page). Click the “next” button to see prices from three dealers in your area. The dealers aren’t identified; you have to enter your name, phone number and address to get to the dealer names and certificates with savings guarantees.
With TrueCar, the guarantee isn’t tied to a specific vehicle in inventory, so a dealer might not have the exact car you’re looking for. But the certificate guarantees the savings off sticker price you were promised on any model in stock in the trim you selected. (TrueCar also powers the car-buying programs for USAA, AAA, American Express, Consumer Reports and Geico, among others, which may offer additional perks.)
Members only. Big-box retailer Costco is more than just 25-pound bags of pretzels. Its vehicle-buying program covers cars, boats, motorcycles and RVs. Costco doesn’t show prices online, though. You start the process by selecting the model you want at www.costcoauto.com and sending your info to the dealer that works with your local warehouse (each brand gets only one affiliated dealer). The benefit of that exclusivity is lower prices: Costco claims an average savings of $1,000 off the average transaction price, as measured by third-party sites such as Edmunds and Kelley Blue Book.
Hire the pros. The best way to guarantee savings is to hire professional negotiators. CarBargains, the buying service of the nonprofit Consumers’ Checkbook organization, charges $250 to shop for your vehicle at five or more local dealers. You get a report with all the prices CarBargains has locked in (typically at or below invoice), and you decide where to buy. The key to its success is introducing competition among the dealers it works with. And each bid, including options, is reported relative to invoice price.