Car Buying For Those Who Hate To Haggle
Roberta Cronin doesn't miss the way she used to shop for a car. In the old days, the Washington (D.C.) sociologist found herself matching wits with a pro, a salesman who raced back and forth to his manager's office, all the while feigning an inability to sweeten the deal further. "He'd say: 'No, no, we can't quite meet that price,'" says Cronin, "or: 'The only car we have has a sunroof.' We'd tell him we didn't want a sunroof, and he'd say: 'Ah yes, but for just $200....'"
Cronin's dickering days are history. In June, she bought a 1993 Honda Accord SE sedan for $18,664, roughly $3,800 below the sticker price and $250 under the dealer's factory invoice. The price was set before Cronin walked into the dealership. She had enlisted the help of CarBargains, a buying service run by Washington's nonprofit Center for the Study of Services.
QUOTE SHEETS. Fed up with high costs and wrangling, shoppers are turning to outfits that, for a fee, purport to arrange a good price on a set of wheels they want to buy or lease. These services are often marketed by banks, credit unions, warehouse discounters such as Sam's, or motor clubs such as the American Automobile Assn. While they often can get you a good break, savvy buyers willing to put in the time can probably do as well on price.
Each service takes a different route to uncover a deal. For a $135 fee, CarBargains tries to fetch better prices by having dealers bid against one another on the make, model, and style of car. But there's no guarantee that the dealer with the lowest bid has the precise car you want. Some buying outfits can deliver an exact vehicle, although customers pay higher fees. Despite low charges, automotive brokers may not get you much of a break at all. The brokers may be in cahoots with dealers, and some states, such as Texas and Washington, outlaw their services.
J.D. Power & Associates estimates that about 11% of last year's purchasers made contact with a buying service or broker, resulting in the sale of around 578,000 vehicles. Nearly half the customers who found the experience more satisfying than the traditional car-buying method cited the absence of haggling as the chief reason. A third pointed to a lower or a good price. Even so, conventional dealers earned higher marks than did buying services, partly because some consum-ers felt the services didn't offer a wide enough choice of dealers or cars.
SALES TRICKS. CarBargains solicits blind, competitive price bids from at least five dealerships in your area. Within two weeks, you receive a packet containing quote sheets from each dealer and a printout outlining the manufacturer's suggested retail price (MSRP) and dealer invoice price for the base car plus each factory-installed option. On the quote sheets, the dealers indicate whether they will sell at, above, or below the invoice price. (In fact, the invoice price rarely reflects a dealer's actual cost. That's because of factory-to-dealer incentives and holdbacks, a concealed profit--often 3%--kept by the manufacturer until the car is sold.)
You can compare bids by tallying the markup or markdown, destination charges, advertising-association fees, and other rebates or charges listed. The packet also offers advice on financing and service contracts, plus a trade-in estimate on your present car.
The drawback is that you get no guarantee the car you want is on the lot. Dealers can employ a slew of sales tricks, once they've got you on their turf. You should insist that the salesperson show you the actual factory-invoice document if he or she suddenly presents a sum different from what's shown on the quote sheets.
Buyers won't ever have to visit a dealer with Consumers Automotive in Fairfax, Va. After consulting with you about the car you want, down to the color scheme and list of options, Consumers Automotive promises to deliver the exact vehicle to your doorstep. The company charges $195 for cars with a sticker price of $15,000 or under, $295 for vehicles with an MSRP between $15,001 and $30,000, and $395 for anything above that. James Boerger, owner of the service and author of The AAA Car Buyer's Handbook, will inspect the paperwork to ensure you pay no more than the price quoted.
Other buying services base their fees on how soon you want the car. AutoAdvisor in Seattle charges up to $679 to get you a vehicle within a week. A factory order, which typically takes six to eight weeks, costs $369 with a credit card, $319 if you pay cash. The company claims it can even find discounts on "no-haggle" cars, such as the Saturn. AutoAdvisor also says it will refund its fee if you can find the car you ordered for less elsewhere.
While many car-buying outfits deliver reliable service and excellent prices, some experts advise consumers to steer clear of automotive brokers. These are often small companies that charge as little as $50 to $100 to find your car, supposedly at a handsome discount from a network of dealers they do business with. According to W. James Bragg, author of In The Driver's Seat: The New Car Buyer's Negotiating Bible (Random House, $12), the brokers might buy your car from a dealer in Timbuktu, raising questions as to how easily you can service it back home. And since brokers get a chunk of their income from the spread between what they pay for a car and the price they're charging, the deal may not be so outstanding.
VIDEO SKINNY. A wealth of pricing and other data is available for car buyers who prefer to do their own haggling. Consumer Reports Auto Price Service (303 745-1700) supplies printouts with the list price and dealer invoice for the car you have in mind. The sheets also recommend options you should buy: The report on the Ford Taurus GL advises buyers to take the antilock brakes and rear-window defroster. The first car report costs $11, two cost $20, and three go for $27. The AAA (800 932-0065) provides similar pricing reports at $11.95 for the first and $8 for each additional vehicle. Or you can phone AAA at $1.95 per minute: 900 776-4222.
Car summaries from Fighting Chance ($19.95, 800 288-1134) include buying tips from author James Bragg. A sample on the Infiniti Q45: "With the spread between the dealer invoice cost and the suggested retail as wide as it is on many of these vehicles, there is a lot of room for the dealer to be flexible and still make an honest buck." Pricing reports from AutoIntelligence ($12, 800 445-6111) contain crash-test results from the National Highway Traffic Safety Administration and road-test specs from Car and Driver. The two-volume AutoIntelligence New Car Decision Maker ($12 each) discusses new models by size, type, and price. The Car Book by Jack Gillis (HarperPerennial, $11) includes chapters on showroom strategies and leasing vs. buying.
Members of AutoVantage ($49, 800 876-7787) are entitled to up to five free new-car summaries a year. Besides sticker and invoice prices, the reports offer three-year maintenance-and-repair-cost projections and stats on the collision and injury history of the vehicle you've chosen, compared with competing models. AutoVantage also runs a buying service. The company has some 2,000 dealers under contract; car prices are predetermined, usually at $100 to $200 above invoice cost.
Subscribers can download AutoVantage data by means of CompuServe, Prodigy, and other on-line services. CompuServe members can get dealer invoice prices and other specs from the "New Car/Truck Showroom." The cost to check out the goods on one car is 90 ; for $1.20 you can compare two vehicles side by side.
Buyers can also get the skinny by video. Former dealer Randall Wilkinson's How To Win The Car-Buying Game: The Complete Video Toolkit ($79.95, 800 644-3327) is packed with useful advice, ranging from how to interpret the fine print on the sticker to getting the best price on your trade-in. A workbook is included to help you compare financing terms and concoct your walkout price--the point at which you will go no higher. After all, if you leave the showroom before a deal is closed, the salesman might run after you with a price even a buying service would be proud of. Edward Baig
DRIVING DOWN CAR PRICES BUSINESS WEEK asked six buying services to quote their best prices on 1993 models for a customer in Washington, D.C. The Taurus price includes the safety option group (passenger-side air bag, antilock brakes), plus a package with rear defroster, air-conditioning, etc. The RX-7 price includes the optional "touring package" (leather seats, sunroof, etc.). Many features are standard on the Q45 and Accord sedan. Ford Infiniti Honda Mazda Taurus GL Q45 Accord SE RX-7 Sticker price $19,720 $46,850 $22,450 $36,775 Dealer invoice 16,982 37,970 18,914 31,226 AUTOMOBILE 16,362(a) 36,270(b) 18,964(c) 29,336(d) CONSUMER SERVICES Cincinnati 800 223-4882 AUTOADVISOR 16,269(e) 36,339(e) 18,669(e) 29,244(e) Seattle 800 326-1976 AUTOVANTAGE 16,317(f) 39,719(f,g) 19,463(f) 29,025(f) Houston 800 999-4227 CARBARGAINS 16,252(h) 36,605(h) 18,324(h) 29,361(h) Washington 800 475-7283 CONSUMERS AUTOMOTIVE 16,241(i) 36,365(j) 18,409(i) 29,265(i) Fairfax, Va. 703 631-5161 NATIONWIDE AUTO BROKERS 15,970(k) NA 19,089(l) 32,283(m) Southfield, Mich. 313 559-6661 Footnotes: (a) Includes $275 fee; (b) Includes $600 fee which covers delivery; (c) Includes $200 fee; (d) Includes $500 fee which covers delivery; (e) Assumes credit card, factory order purchase fee of $369; (f) Includes $49 membership fee; (g); Assumes $300 delivery charge; (h) Includes $135 fee; reflects low dealer bid; (i) Includes $295 fee; (j) Includes $395 fee; (k) Includes $50 fee; (l) Includes $150 fee; (m) Includes $75 fee NA=Not available DATA: CONSUMER REPORTS AUTO PRICE SERVICE, COMPANIES
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