So once again due to some rather unique circumstances where my brother and I suffered similarly catastrophic automotive calamities (no…not that kind nor the kind that invites official notice but rather the inevitable result of many years of faithful service hither and yon and many thousands of miles on the odometer).
But every awful situation such as this is an oportunity to dust off the skills that Hungarians (particularly those of us with a significant Gypsy ancestry) and put them to good use.
And most importantly, have fun doing so!
Just as not everyone in the world is Hungarian, negotiating with car salespeople isn’t everyone’s cup of tea.
Some come along as we have a bit of a jolly wheeze as we seek to add yet another to the growing cult of Toyota Corollas in the family.
This isn’t Ben and Jessica’s first rodeo as they’d be coming up to the Triangle in the Corolla they bought two years ago almost to the day that was chronicled in this epic tale so we can skip through the training on the methodology to be used against the dealership and go straight into the fun stuff! 🙂
They’d already come armed with a prequalification letter (always a smart move but the dealer hardly needs to know that until they’ve actually agreed an acceptable deal!) and done the research on what Corollas were available in the Triangle area so all we needed was to meet up with each other a bit after noon at our first target armed with a fair market valuation from Edmunds and Kelley Blue Book…
The First Salvo
The first car of interest was a red 2024 that was sitting on the lot of Mark Jacobson Toyota in Durham with about 7,000 miles on the clock.
One nice thing about buying a car now as opposed to about twenty years ago is that there aren’t really any surprises in the pricing other than the vagaries of dealers assigning the absurd top-line number they’re going to want to try to suck you into just saying “yes” before the reaming that comes in the Finance department.
I don’t know if this was intentional on their part or a sign of hubris on their part but one of the first links on detail screen was a link to an image of the original Monroney label which is that massive government-mandated sticker on the car listing the details of what is installed on the car as well as the required manufacturer’s suggested retail price which they are dearly hoping you’ll just pay without a second thought.
When you compared that original Monroney label with the starting MSRP on their website, you couldn’t help but notice that they were asking for $1,450 *MORE* than what the MSRP was when it was originally sold by them two years ago!
I know that Corollas are very popular and low-mileage ones even more so but that is an absolutely shameful and appalling cash grab for pure profit! On the one hand, one can’t help but appreciate the sheer unmitigated gall and chutzpah it took to pull that stunt because even with the seemingly large discount being applied to an already inflated starting figure, they were still wanting almost $6,000 over what we felt was fair market value and backed by both Edmunds and Kelley Blue Book.
So after Jessica took a quick spin and discovered the shocking revelation that the 2024 Corolla she was test driving had the exact same driving feel as the 2024 they’d rocked up to Durham from Fayetteville, we got our first offer from the dealer which not surprisingly was their actual “internet” price we already had on their website.
The sales guy’s reaction to me taking one look at that number, crossing it out and putting $20,000 OTD (out-the-door) definitely twigged my Spidey senses that this dealer seems content to sell to people who are either ignorant or can’t be bothered to negotiate.
He seemed to be personally offended that I’d made an initial offer that I felt was FMV and he very quickly tapped out to bring his sales manager round who tried to convince us of the fairness of his (already inflated) number and really tried pushing back hard about his own proprietary valuations that a) we’d have no access to and b) are by nature going to be set to maximise profit for the dealer.
I was genuinely surprised how he and his manager could feign offence when I was essentially returning the favour of his absurd number with one similarly deflated in our favour as an opening bid.
If anything, I felt I’d been overly generous starting at $1,500 over FMV which I almost never do to try to save some time in the negotiations so I could get Alex to work at Chick Fil-A on time.
When he tried questioning me on how I came to that number and produced a price list which he shockingly allowed me to keep (!), I’ll confess that the first number that I’d used as a basis for the initial offer was $18,500 which as it turns out was the trade-in value and I’d missed the drop-down menu to select the retail fair market value.
But even if I’d flipped that drop-list to retail value representing the average of prices paid in the area, the number that came up was $20,350 so my initial offer was still much closer to the right neighbourhood.
This is the point where the discussion took a very bizarre turn when the manager started rabbiting on about having customers that drive all the way to Durham from South Carolina and points beyond for the privilege of paying his inflated prices without trying to negotiate right in front of a willing customer who had already driven in from Fayetteville that was sitting right in front of him who was only interested in getting a fair price for the vehicle.
I’ve been involved in car negotiations since I was eight years old and I’ve certainly seen my share of negotiations that were absolutely shameless, occasionally ones that were relatively painless, and even the odd one every now and then that was just plain weird like this one when a salesman in Wendell loudly yelled at us about losing deals to Capital Ford including ours and pretty much emptied out his sales floor of many other car buyers!
This manager making it very clear he’s perfectly content with being lazy and not even making a real attempt to earn Jessica’s business is certainly right up there!
This is where I want to give a shout out to Jessica because it was clear she wasn’t buying any of the multiple piles of bovine faeces he was trying to sell and she said that whilst she appreciated his position, she was convinced that it’d be better for her to consider her purchasing options elsewhere at a different dealer.
If there was one lesson any car buyer should take to heart, it’s knowing when to walk when the other side isn’t willing to play even if it’s a nice car and the mileage is right.
The right deal will come to those who are patient enough to be in the right place when it comes round.
So out the door we went and our next stop was a little Toyota dealership just north of RDU that airport I’ve been reasonably familiar with through the years…
Hello Old Friend, It’s Been A While…
Having negotiated for two successive Siennas at Fred Anderson Toyota, I was much more hopeful of a successful outcome than I had been at Mark Jacobson.
Even though it’s been well over a decade since the last time I went to Mark Jacobson to negotiate for the first Sienna which ultimately was bought from Fred Anderson, sadly the vibe in Durham is very much the same as it was and I can’t say I’d really go out of my way to recommend them if I’m playing the wing-man on negotiations even though I have no problems attempting to negotiate even with the worst and most rude actors.
After all as they say in the industry, it’s nothing personal! 🙂
The vibe of the dealership certainly matters and it was clear from the off that we felt we were in a much more welcoming environment. Whether that’d lead to a consummated deal wasn’t necessarily guaranteed but I’d had good luck at Fred Anderson before and I was willing to roll the dice once again.
That is once I got Alex changed into his Chick Fil-A uniform which is quite the challenge in the close confines of a washroom stall, even if it’s sized for someone in a wheelchair. So as we were going through the uniform gymnastics, Ben and Jessica were getting their thoughts together on what Corolla we’d ask to inspect first.
The first candidate was a white Corolla LE which was certainly on the lower end of mileage and even though I’ve tended to avoid white cars like the plague as they tend to be dirt magnets (somewhat ironic considering now I’m driving a black Camry which is equally a dirt magnet and hella hot in the summers as a bonus!), we figured we’d have a look-see.
The engine sounded nice enough and I’d noticed something on the underside of the bonnet which at first glance looked like road grime but when Ben had a closer look at it, it turned out to be oil that appeared to have come from the oil filler cap area on top of the engine.
That was enough to send the white Corolla packing and we started sifting through some of the other cars on the lot. We must have checked two or three of them in the list sorted on mileage with the Carfax giving us reasons to give them a miss before alighting upon a bluish-grey 2025 Corolla LE that had about 26,000 miles on the clock and looked reasonably clean on the Carfax.
That would be the one we’d start negotiating and having corrected the mistake I’d made before to flip the drop-list to the correct valuation, I tossed an initial salvo right at FMV on the “we’d like you to pay the full sticker price” first offer that came from our sales guy.
It didn’t take long for his sales manager to come round and have a go at negotiating with us directly but the conversation had a very different feel to it from the start.
I’ll spare you the full blow-by-blow but essentially the gist of it was that he’d noticed that I’d started aggressively low (true!) and was convinced that he could prove to me that he would lose money on the deal if the final agreed price stayed there. Where he and I differed was on two critical points about what constituted fair market value and whose computation of that should be believed.
I generally use Edmunds and Kelley Blue Book to determine the fair market value by VIN whereas he prefers the National Auto Dealers Association (NADA) pricing guide coupled with Kelley’s Black Book arguing that it is a more accurate reflection of FMV because it’s updated more frequently.
The part he didn’t admit to during that conversation is that NADA is a proprietary system not available to the public and given who owns and operates that system has a very strong financial incentive to skew the values on the higher end much the same way that the Black Book value does, particularly on new cars.
If you lay the tracks a certain way, that tends to be the way the train goes!
I can only go off the data I have available to me when I’m negotiating the purchase price and whilst the NADA/Black valuations are often higher, they’re usually still in the same neighbourhood…it’s not like they’re going to be $5,000 or more above FMV computed by the equally reputable Edmunds/Blue Book data sets.
He also noticed that I don’t seem to care about any of the numbers above the out-the-door price and he’s absolutely got me bang dead to rights on that as well.
I don’t care about those numbers because they’re ultimately irrelevant to what I’m trying to accomplish. The only things that are completely non-negotiable are state-mandated taxes and fees…sales tax (a 3% “use tax” in North Carolina but it’s the same thing) and the DMV fees for title, tag, and registration.
That’s it. Dealers like to claim that their “doc fee” is non-negotiable but there is absolutely nothing in the NC General Statutes that mandates that they ever charge a “doc fee” which is supposedly for their overhead and cost of staff to effect title work but in practice with the new electronic titling systems makes title work relatively trivial unless they’re dealing with a defective title.
In other words, the “doc fee” is almost all profit even though our friendly and loquacious sales manager vehemently denied it.
Deny it all you want but the truth is what it is!
I’ll also plead guilty to the last of his friendly accusations…that I’m the sort that will ask for something regardless of what the price being offered happens to be.
Absolutely.
To do less would be to bring shame on over a millenia and a half of my Magyar ancestors and their love of tradition and honour in haggling.
Ultimately, I ended up getting him to move in our direction but there was a number he absolutely was not going to go below no matter how hard I tried.
Whilst our friends had given us some privacy I’d quietly gotten Jessica to agree that if nothing else could be done, she’d be perfectly happy with that number as her “out-the-door” price (which is really the starting point for what the F&I office was going to add to it).
That didn’t mean I wasn’t going to make one more attempt at trying to grab a little more cash for Jessica at the midpoint between the sales manager’s number and my previous offer.
To the last, I grapple with thee; From Hell’s heart, I stab at thee; For hate’s sake, I spit my last breath at thee.
Khan Noonien Singh (quoting Captain Ahab from “Moby Dick”) —- “Star Trek II: The Wrath of Khan”
It could certainly have been viewed as a bit spiteful but I think I’d read the sales manager correctly that even if he wasn’t going to give in, he’d at least respect if not laugh at what I was trying to accomplish even if I had to make him work a bit for it.
We pushed the paper between us a couple of times but when it was clear we’d hit the end of the road, I “begrudgingly” allowed Jessica to do something that had never been done in a car deal I was negotiating in the nearly 50 years I’ve been in the trenches at the dealership.
She overruled me and signed off on the final number from the sales manager.
The fact of the matter is that she’d earned that privilege by comprehensively proving that she actually didn’t need me along at all…she’d picked up on all of the clues and the BS and the occasional bits of Joe Isuzu-like behaviours and I feel confident she’d probably have gotten close if not to the same number I had.
That she didn’t have to bother and could enjoy the show is a privilege and a honour I’ll cherish!
From The Frying Pan…
Jessica has a potential deal on the table but we’ve got the most dangerous part of the dealership ahead of us…the dreaded Finance and Insurance Department which, along with the service bays, is where the dealership truly makes most of their money.
So we go up the hill to the main building to meet our F&I adversary with a brief side trip to the aforementioned service bays to pick up what the gentleman in the parts department described as “the most expensive water bottle you’ve ever bought” before it was time to match wits and hopefully escape with a good deal for Jessica.
As this is a deal that has already had one unprecedented facet, the F&I guy we got could not have been better.
Even though Jessica had her pre-qualification letter, we were still going to hear the legally required spiel offering a lot of add-on products to that base deal and that presentation went way quicker than it usually did.
I really don’t want to get my favourite F&I guy in trouble (not that I think he’d really lose much sleep if he did!) but let’s just say some of the more egregiously bogus items on “the menu” were quickly disposed of with the help of some props and some friendly advice.
The items on the menu that did make potential sense for Jessica were the extended maintenance contract, pre-paid maintenance, and a GAP policy to cover the difference between the loan balance and a payoff if the insurance company totals the car (which they typically do at about 70% of the Blue Book value at the time of the incident).
I’ll take the GAP policy first and normally I loathe them as grotesquely overpriced and I do not believe I’m wrong in that opinion…plenty of industry experts feel the same way about it!
And yet I ended up signing off on GAP on both of the deals I negotiated this week (though both of them were discounted from the original amounts the dealers were asking).
When you consider the less-than-stellar quality of drivers in Fayetteville (and Raleigh!) and that a car could easily be totaled out from under you through no fault of your own, it’s hard to argue against it.
This is where the F&I conversation took a turn I never expected as this is the first time I’ve had a F&I person mention the possibility of cancelling GAP once you’ve hit about 70% LTV much in the same way one can cancel private mortgage insurance (PMI) when they hit 80% LTV and Federal law now requires banks to automatically cancel it at 78% LTV even if the homeowner doesn’t request it (because in the past the banks wouldn’t bother doing so and kept collecting on a policy that literally had no value).
Once your at 70% LTV on your vehicle, you don’t need GAP as the insurance settlement should be at least enough to pay off the loan at that point.
I’m not ashamed to say that I told that F&I guy that I loved him…and I meant it! 🙂
We also went for the pre-paid maintenance which does eventually pay for itself and Jessica’s pretty much a “stick to the manufacturer’s maintenance schedule” sort of driver which will come in very handy as the 30K servicing that’ll be paid by it is literally just a short distance down the road.
The extended service plan…yeah, not a fan of the dealer’s pricing and you can get a much cheaper version from a reputable VSC provider. The drawback of the cheaper version is that the dealer has to essentially go through pre-authorisation for repairs and even the reputable companies are full of questions, especially when you start talking about mending the continuously variable transmissions (CVT) that is becoming quite common (two pulleys connected by a belt rather than the traditional gears in the gearbox).
Often, that authorisation comes within a hour if not the day but as she’s likely to have the repairs done at her local Toyota dealer, their extended service plan is not going to question their own dealer recommending covered repairs.
As we were going over the pros and cons of the maintenance and warranty plans, I noticed the tablet screen updated and there was a significant reduction across the three products that were ultimately selected without me having to ask for it (though I’m sure he knew I would!).
Like I said, he’s the first F&I guy I’ve ever really loved. I’ve liked most of the others but he’s head and shoulders someone that were I negotiating another car at Fred Anderson, he’s the one I’d be willing to wait a hour or two to get through F&I.
So there you have it…Jessica got a number and a car she’s happy with and my part in the adventure was done in plenty of time for me to make it back home, get changed into some dry clothes, and head back out to Wake Forest to do my weekly spinning of the tunes which you can read about right here… 🙂