How to get a good price on a car

I’m a crazy spender but also a great reasearcher/shopper. A friend asked for some advice on how to buy an Audi A4. Here’s what I sent her:


Hi ***,

First, I’d recommend buy CPO. I bought my BMW CPO, Aki bought his CPO, and i just bought my mom a lexus CPO. We saved 25% off the new car price for a 3 year old car (you would save 15% off a 1 or 2 year old car) and got an identical warranty. So net win is like 6-10k. Unless the car recently updated, it’s pretty much the same as buying new.

Second, I’d recommend euro delivery. There are BMW dealerships (I know you’re looking audi, but same thing), who charge around $500 over invoice for a car if you do euro delivery. Euro delivery also means the invoice price is lower (which pays for the trip). The reasoning here is the euro delivery cars don’t count against a dealership’s quota, so they are willing to sell them cheaper (they only get a certain allocation per year).

Third, if you are set on buying new and in the US, then the best resource for pricing is on car forums like AudiWorld. I don’t have any specific car knowledge here. The price varies based on which car you want and what the demand is. When I bought my A4 10 years ago, 5-7% over invoice was pretty normal. But I actually think the prices have come down since then as the economy went down and competition went up.

Another tactic is to buy outside of California. My dad bought his Lexus from georgia, unseen. It’s pretty safe. You put it on a truck for $1k, and it has a full warranty. So you have nothing to lose. If you get the car for $5k less, that’s a 4k win. Being open to buying outside your local area also means there’s a larger inventory to choose from. You’re more likely to find a car with the exact specs you want.

In general i’m a big fan of warranties and insurance with low deductibles. Once you have that, i’m pretty open to taking big risks to get better pricing.

Finally, check out Carwoo.com if you decide to buy the car brand new. I’ve never used them before but the model is dead on. You let dealers bid for your business. Car dealers are crooks. They know nothing about the cars they are selling. So look to them to get the best deal, but not for advice or information about the purchase you are making.

Good luck, and let me know if you have any questions. 

p.s. get the seat heaters!

-Sachin

5 comments

  1. So true about car dealers knowing NOTHING about the cars they’re selling. When I bought my Lexus a few years ago, I asked about the lack of an AUX jack. He said there wasn’t one because "you can plug in your mp3 player into the cigarette lighter and it plays through the speakers." Right. (Turns out, he was explaining charging the device through the lighter and using an FM transmitter. He just thought plugging the device into the lighter did both. Yikes…)

  2. when i bought my mom’s lexus, the dealers didn’t even know what options the cars had. I had to force them to print out the original winder sticker. Turns out the car we bought had more options than the dealer even realized. What an idiot.

  3. Gotta watch out for aggressive, under informed sales droids. While helping a friend shop for a Civic in the fall of 2008 I asked if stability control was available. The sales lady showing us the car told us the Honda’s superior chassis didn’t need it, even though the 2009 EX-L models already on the lot had stability control.Our approach was to contact a bunch of dealers over the internet, both out of state and local. Request a quote for the exact vehicle you are looking for, and as weeks roll by and the odds making a sale drop, some will offer deeper discounts. It is even possible to get a price below invoice if the factory is giving the dealer incentives. Often the dealer has to sell at least a preset number of vehicles to get the incentives. If the dealer is has to sell 100 vehicles this month and he is 4 vehicles short just days before the deadline, he may let those 4 go cheap to get his incentives on the other 96.If you live in an area where the dealers aren’t discounting, I’ve had luck contacting dealers in Texas or Pennsylvania. They can give you a good price and handle shipment cheaper since they have existing relationships with the shippers. To get an idea of what normal shipping costs are check the different shipping services eBay sellers use – a couple of them provide instant quotes online.

  4. Another good option is a car broker who will walk you through the process. They charge a bit but should be saving you more money than you can negotiate yourself + their fees. I’ve done this multiple times for friends (no fee).

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