Friday (April 6th) I went to the Rivertown Honda dealership. I wandered around the parking lot in the extreme cold prior to talking with a new car sales person. I test drove the Honda Civic EX w/ Navigation and LOVED it. It beat all other cars I had been in right on the spot. Great fuel efficiency, power sun roof, automatic everything, 6 disk CD changer, touch screen LCD with GPS navigation (which is voice activated too), comfortable seats, and decent back-seat leg room! The entire car felt very well made whereas other cars I had been in were not as nice.
After I returned from my test drive the salesman and I sat down to discuss financial matters. She, as expected, played the Four-Square technique on me, but I just went along with it to see what to look forward to at another Honda dealership. 😉
She began by asking me things like, “Do you have a trade in,” and “When will you be purchasing this vehicle?” The Honda dealership doesn’t use a “Four-Square” worksheet, but they do have a computer program that they type the same information into to calculate values. So, she started saying that if I got $500 for trade in, and put $3000 down with an APR of 7% my monthly payment would be X. However, she never mentioned the ability to negotiate the MSRP. I knew this was because she wanted me to argue the trade in and down payment prices. Because this experience was for education purposes anyways, I played along and asked her other questions; like: “Are there any other fees associated with this close” and “What will the final cost be after all charges and taxes are applied?”
Eventually we got to the MSRP and she said, “What if we got the price down to 20900? I doubt my sales manager will be able to do that, but let me go talk to him.” A minute later she returned with her manager, miraculously he was able to get the price down to 20300. I began to think about it after he left and realized I was being played. She knew what the lowest price is they would go, and she knew it was less than 20300. She only said 20900 so I’d feel better when he proposed 20300. Bastards.
I left shortly after then. I was aware what an “easy” price to accomplish would be. I went home and looked up the invoice price for that model (20154.67). The price they proposed was only 150 more than the invoice price. However, I know they get manufacture rebates every time they sell a vehicle.
After this, knowing how much I would have to take out in a loan, I went to my credit union to get a loan estimate. I showed her my acceptance letter through GV, and explained that I do not start until May 7th. I guess I have pretty good credit, but my debt to income ratio is too high for them to give me a loan right now. She said I could come back in a couple weeks and they’d be happy to give me a loan at 6.25%.
Saturday morning I found a listing of all the local Honda dealerships. I wrote a script that I was prepared to say (in my professional telephone voice) to each dealership to see what price I could persuade them down to:
“I’m looking to purchase a 2007 Civic EX Sedan w/ navigation (Automatic)
I’ve been in contact with the Rivertown Honda dealer who has offered me the car for 19,300.
Is there anything you could do for me to bring my business to your dealership?”
I realized that the price I stated was a lie, and that it was extremely low. I also realize that if a dealership cannot match that price then I can only hang up otherwise my intentions would be obvious. I started off by calling the Muskegon Honda dealership for practice. Originally when you call a dealer they ask how they can transfer your call. Each time I would say “New car dealer please,” and they would transfer me. I read off my script perfectly, and the guy took a moment to look up their cost. He sounded alarmed that anyone would ever offer me the car for that low of a price. He said that he would be loosing money on that sale, and he couldn’t come anywhere close. I then, knowing I couldn’t now say “How low could you go” without being obvious that no one really quoted me that, I concluded our conversation.
I then bumped my script’s price up to 19,700 and called the dealership near 29th street in Grand Rapids. This time I got a bite. He said he’d beat them by $200, asked me when I’d be in (I said later next week), and gave me his name. He never asked if it was an automatic or manual transmission, never took the time to look up the cost to them in his books, and only gave me his first name. I was kind of worried that his statement was only to get me in there to con me into a higher/different price.
Having a better estimate at what the car was worth to the dealer, I changed my script’s price to 19,500, and changed the dealership’s name to Fox Honda. I then called one more Honda dealership in hopes that I would get a full name, a better response, and a quote for an automatic. I read off my speech (mentioning it was an automatic), we exchanged names and numbers then he said he’d have to call me back in a couple minutes because he was not near his computer/books.
A couple minutes later he called me back and said that 19500 was unheard of. That he could not beat that price, but they could match it with no loss or gain to the company. He explained that he would give me that price in hopes that they would have my commitment to Honda in the future. However, he wondered what would entice me to go there over the Grand Rapids location? I mentioned that Toyota sometimes gives away free oil changes. He said that Honda sometimes gives a card for 4 free oil changes and tire rotations to people who are purchasing a second Honda through them. He said he would include that in the sale for the same price as the Honda dealership in Grand Rapids. He then started talking about making a down payment of $250 to show my commitment, and I just said I’d need time to think about it, and would get back with them on Monday.
On Monday I plan on calling the Rivertown location, telling them what they have offered me, and trying to get a free extended warranty included. If that fails I will call back the better deal and schedule an appointment to close on that car before they change their mind. The only thing I am worried about is getting approved for a loan through the dealership before my two weeks are up for the credit union. I realize I could take a loan out through the dealership then refinance my loan through the credit union (The woman at my credit union suggested I do this if I needed the car ASAP).
Wish me good luck,
Edit: I thank Cheryl Slaughter for this sly advice.