OT - Buying a car - Try to pay close to invoice, or below invoice?

[Judegirl]

I'm buying a Toyota Corolla, and a dealer offered me $100 above invoice. Is this a good deal, or lame?

I've been on edmunds. com and cars.com, but I still don't have the answer to this one.

Thanks!
Jude

[ellies mom]

Well, you could try going to another dealer, tell them you want to get the same car for less than that price. If they won't give you a lower price then it's a good deal. If they go lower, then go back to the original dealer and ask them to do better than the new price, and so on. Good Luck. Car shopping is such a bother.

[Momof3Labs]

Is it a 2004 or a 2005? They are trying to clear out the last of the 2004's now, so you could probably do better on that model year. Also keep in mind that the "invoice" is NOT what the dealer pays - the car costs them less than that. Consumer Reports has some good info on the markups of various car models.

[bostonsmama]

I'm having trouble remembering what "invoice" is, but as long as you are paying 2,000-5,000 below sticker price, you're doing well. I've purchased two higher priced Toyota cars from Toyota dealers in the past 3 years. On the first one, an MR2 Spyder Convertible, the salesman offered us $1,500 OVER sticker price (MSRP)...as if that was a good deal...so we told him to take a hike. Granted, that's what all dealers were getting for it because it's such a hot little sports car. Nevertheless, we counter-offered $2,000 under sticker price, which he eventually took. A year later we saw the car selling for $2,000 more USED than we paid for it new. (Plus we negotiated free oil changes and a $200 discount on the extended warranty...which you'll never use because Toyotas are so well made).

Second one, a 2004 Limited Ed 4Runner, we traded in the Spyder. We got SOOO much for trade in (only lost $5,000 in 3 years) that they really didn't want to negotiate with the SUV. We paid $1,500 under sticker price, but by the time they added taxes/fees on a $40K SUV, it was almost $4,000 ABOVE sticker....so make sure you consider that.

A good offer I like to make is to name a price, then tell them you want it "out the door," which means including ALL taxes, tags, dealer fees, etc (plus any ammenities the dealer can offer: we got lifetime state inspections, free oil changes & all maintenance for 2 yrs/26K miles, and 2 free tanks of gas). If we hadn't included that trade in, the salesman was willing to give us the 4Runner for $38,000 out the door, which is almost a $6,000 savings from what we wound up paying. And if that doesn't sound like a lot, that would have saved us over $100 per month if we financed at 0% for 60 mos.

Be strong, be firm. Always make them believe that you could walk out the door at ANY time and not come back if you aren't pleased with the offer. Go to another store, tell them you were quoted a price $500 less than what you were offered and ask if they can beat it. That's how you play the game.

[Judegirl]

Thank you so much! That's exactly what I needed to know...and you make it sound much less dreadful!

:)
Jude

[bostonsmama]

Anytime. And by the way, you're going to LOVE that Corolla! The new ones are so much roomier, way too cute, and a pleasure to drive. Best of luck! :)