Revvittupp

I have been lurking on this board for a short time. As a recent first time Rotary owner, I came here for some tips on a direction to go. I purcahsed an '05 Touring 6MT in Titanium Gray. Because of some posts I've read, I have decided that my first wave of mods is:
Alpine PLT-5 Sub array.
Voodoo Magnum piano black
Green Air filter and gutted airbox.
Thanks for the tips.

So, I figured I might as well give something back. Whle perusing and SEARCHING this forum, I found very little advice, good information, and mostly misdirected energy. So lets see if I can bring some enlightenment with my initial post.

FYI, I have been a Finance Manager and Sales Manager at 2 local Mazda Dealerships, as well as many other Manufacturers. It was my time Demo'ing the rotary roadshow 8 we had that got me hooked. I demo'd another last year and remembered what I thought of the car, and thus once my other lease was up, it was time to buy one. With the manner in which they deprecdiate in this market, that made an easy decision for me to make to purchase used.
FWIW, I paid $17,495 at Mannheim Auto Auction for a my '05 touring MT with 7k mikles, including buyer fees. That was almost a month ago, so as time goes on, that means less and less.

Because of that nature, I wil focus most of this post on New cars. Alot of the tips and tricks will work on both new and used cars, though the actual pricing information is not available on used cars.

First of all... all of these "what is your closing price" - type threads, do not really accomplish what they intend to. I can only imagine what you guys are acutally lookign for is a manner in which to compare deals offerred to deals that have been achieved in the past to see if it's a "Good Deal". They don't. A "Good Deal" is a very fluid and situational thing. It is also in the eye of the beholder. If you get an absolute steal on a car you don't like, it's a bad deal. Assitionally, often times when customers left our store Happy and feeling secure in their purchase and negotiating power, they were very profittable customers.

So What is a good deal? First let's start by taking away confusing cloud to get to the barebones. Taxes and Tags do NOT belong in this discussion. They are regional, local and different for everyone. The dealer does not benefit (significantly) in any change in their value from person-person. Rebates, directly to the customer from Mazda also do not affect the dealer, and thus do not belong in this comparison. Lease programs differ state to state, and NO other states leases will compare with NY's.

Additionally, there are other things sold at dealerships that can affect the quality of deal you can get. This can come in the form of accessories, warranties, financing and insurance. Here is the key to this whole thread... If you can be benefitted with good value from any of these extra's it works to your advantage as it increases the profit to dealership.
Huh?
Why is this EX-car dealer guy telling us more profit for the dealership is good for you buying a car? Because it is. Contrary to popular belief, the less the dealer makes is not the better deal. I have seen plenty of times where people left lower interst rates available by dealers in favor of their own credit unions. Some times these people understood that they really should have Gap Insurance, but would not purcahse as it's profittable for the dealership. These same people are shrewd price negotiators and "sure to get the best deal right".
NO.
First of all, you get the service level that fits how you treat the dealer. You want a good experience from a knowledgable staff? Don't be a jerk. Car Dealers are people, they are more likely to take less profit from someone nice. Second of all, as mentioned earlier there may have been value in some add on's, to possibly increase the quality of thier deal. Say you are going to buy a Mazdaspeed CAI. It's $339 pretty much everywhere you look and the dealer can sell it to you for $299 and install it there. Why wouldn't you buy it? Ity's funny, but sometimes people will turn down 5.99% APR to their own 6.25%, why? Because they were mislead into thinking that taking profit from the dealer helps you. So when does an aftermarket item benefit you to buy or finance from the Dealer? When it is similar in price to what you can get elsewhere, and the dealer profits while moving inventory. See the thing is, Dealerships are in the business to sell stuff, moreso then profit from it. Creating a good customer relationship, at excellent value to both parties is more advantageous then yanking the carpet from under someone once.

So I keep telling you about making sure you get good value for these items. To do so do research. Get prequalified at Capital one.com or yoru credit union. Research Mazda factory warranties (and aftermarket, thogh i wouldn't buy one) to establish a fair price, if that would benefit you. Basically everything at a dealership is negotiable, parts, service, cars, rates, finance products. At the time of this thread, Gap insurance isn't really publically available pricing wise, but it's worht about $300 if you need it. When do you need it? Really independant of the deal you get on a car, if more then 80%^ of the car is financed, for more then three years, you should get it.

OK, So I've told you how to increase the dealers pocket at no additional expense to you, so how does that benefit you? It's real simple really, you'll be able to negotiate a lower price. Delaers look at deals as a whole, customers as future earnings, and the like. Service departments are the real profict centers for the dealership and it is more important to have a happy saloes customer then a profittable one. So the guy that had tp pay "cash" without gap insurance left at LEAST $500 on the table in his sale price, while also decreasing his own value in his purcahse. These customers make me hope noone is injured when the car is totaled, and they have to pay the balance, after paying too high of payments until that point. Esserntially every penny earned in another manner can fome off a reasonable cash price.

So what's a good cash price?


Start at Edmunds.com. Get the MSRP, INVOICE, and TMV. Invoice is NOT a true cost number, as that is a very fluid thing. It is the manner in which you compare apples to apples though. TMV, si a conservative estimate of a fair cash price in your area. All rebates come off of all these numbers. They do not cost a dealer anything. The dealer also receives 2% of the invoice-destination of all cars they sell quarterly. That is what's known as holdback. Surprisingly, the info on Edmunds as far as incentives and invoices are VERY accurate. Often times unpublished "Dealer Cash" programs are noted there.

So now you have a lot of info, how do you negotiate. Pick a delaer you like, find a salesman that is knowledgeable to speed the process along. Then, pick the exact car you want. Don't find your exact car and go buy it there. Your experience will be worse as they kind of have the power. All dealers will look around and find and bring the vehicel you want. If you don't want it driven from that other dealer by anyone else, offer to complete the sale, and drive up with yrou salesman to pick it up. Don't worry, if there is a scratch on it or 900 miles, the paperwork is worthless until you drive if off the other dealers lot with your own tags on it.

So to actual negotiations. Start withthe salesperson, but raise questions and objections about the finacial options, and add-ons, etc. What you are aiming for here, is to speak directly to managemen, while also letting them feel like they have price "wrapped up". Ideally, you end up directly in the Finance office, after all you are acutally ready to buy the car. Discuss and negotiate on rate, warranties, and add-ons. Get them to the point where they are offerred lower or near what you can get, or decided against. THEN, discuss price. Using the TMV info you collected earlier, subtract $500 and whatever else you approximate you have added to the "profit pool". A well negotiated loan will have roughly 1% in compensation for a dealer, so $300 for $30k, etc. A well negotiated Warranty or Gap policy will have $100 - $200 in profit. often times Warrantiesare priced $500-$1000 over true cost. Accessories will generally be priced with 10% profit on tight deals.

The key to this, is that as soon as you walked into Finance and dicused the other items, you added yourself to the sales log in the Managers head. The key is that they HATE to not sell a car they have already assumed. Thus, you are in the power position. If the car is elsewhere, this entire process must be done first. If it is there, let them clean it up, the works. Now you are in the power, as long as the deal makes sense to the dealer, it will be accepted. Generally, this means no less then $1k-$1200 in total profit(incl holdback) on a car of average supply/demand. So, on a new RX8, with little down and comparable rate at the dealer and a cheap CAI... Offer $200 or $300 over invoice, and prepare for the Sales Manager to cave in. It's a fair deal, and everyone wins.


***Wildcard*** Mazda in particular, has additional performance based incentives for dealers. If you happen to catch a dealer late in a contest when they are close to a goal, all bets are off. Often times it can be as much as $1000/ car retroactive for 50+ cars. They will lose $5k on a car to make $50k if you are the last viable customer, and to a lesser extent the later it gets.

Ok, I did this last night, and lost it, redid it again, a bit quicker. Questions, comments? Good first post?



**** Do lots of research. That's the most important part. Your knowledge gives you the advantage.

StealthTL

iTrader: (1)

Very good first post, and a lot of useful info.

I look forward to your next one.....

S

hough2696

You need to summarize...................................theres too much

w0rm

Some of us are slightly beyond a speak n' spell or picturebook.

Thanks for the details revittupp.

Revvittupp

Summarize... hmmm. I thought I jsut hit the tip of the iceberg. I didn't even get to used cars, trade-ins... Oh yeah
Trade ins. Very siilar, if you can tget the same value from them as someone else, if benefits you to sell to them, if they want it. Again, that is additional profit that doesn't cost you a penny. If they don't wnat it, oh well. Carmax is a great source of selling cars. They for some odd reaosn, typically pay over auction value for retailable cars. It is a great baseline to get before entering a dealership.

Ok so a brief summary.

Less dealer profit does not equal a better deal to you. The key to a good deal on a car is research. Find out the costs fo the things that you want, car + extra's and use this to your advantage. During the pruchase process try to guage the supply and demand of the model you are looking at. If a dealer has more then 90days of supply of a car model, they will be more interested in unloading some.
If yoiu hint at future service business, they will be more flexible. If you are nice and courteous, they will be more flexible. The more profit you allow a dealer to make on other items and services, the lower the price you can get on the car. The key is to recieve maximum VALUE from the transaction. If a dealer can meet the rate you can get, take it, as well as a $200 sale price discount. Same with warranties (if they fit you), accessories and insurance. Dealers and customers both should look at the enitre deal as a whole when deciding if it's a "good deal". Edmunds.com is a great resource with plenty of accurate info on new cars. Finally, my personal recommendation is to do all negotiations in the finance office, once all parties have concluded there will be a sale. Let them wash the car, and get it ready. Negotiate accessories and add on insurance first, rate second, then trade, then price. You will arrive at a reasonable sale price offer after doing research and finding out approximately how much profit other services have given the dealership. A fair offer would be Edmunds TMV - $500 - any other profit you put into the deal. With an '08 RX8, in MD, with a laon, Gap insurance and a Mazdaspeed CAI, as outlined above, that should be an offer a little above invoice, perhaps $2-300.


Now, what I also explained, was that if the loan is not comparable to wht you can get, don't take it. If you put more then 20% down, don't buy gap insurance, etc. But if you get value from using their services, they will pay you back in price.

½mv²

Lots of great information. You write very well - there's a lot there but it reads really fast.

Hope to see you regularly on these boards. Welcome to the addiction

hough2696

Keep your lousy insults to yourself.....

There is gr8 information in his post, though with long posts like that, some ppl would make quick bullets at the end as a reference.

Revvittupp

The thing is, the more I shortcut(and therefore you do), the more you hurt yoruself. The more well prepared and reasonable you are, the greater your experience and value received will be.

hough2696

Apparently you're not getting what I'm saying, but yes, great info and help for your 1st post.

Revvittupp

My second post in this thread is as close as I can get to a cheat sheet htat has any value. It's less then half a page. But as with everything, the more you put into it, the more you get. You could read y little blurb, and do ok, you would do better if you readthe whole thing, better still if you picked my brain a bit, and betteer still If I show up with you. If the long one is too long, don't read it.

hough2696

Once again.....oh nevermind.

I read it the 1st time I was just saying.....bullets at the end......nevermind.

RMZ290

What about used. There are a lot of used rx-8's at non-mazda dealers and winter is approaching. What is a reasonably offer, a couple hundered over trade in value? I've always heard you are suppose to be embarrased about your first offer, but don't want to **** off anyone. Seems like a lot of them on autotrader are getting reduced in price a lot too.

I also don't know about financing, I'm kind of afraid of dealer financing because I doubt I would get approved. Do you think I would get approved I'm 21 with a credit card for less than a year, and was going to get one of my parents to cosign who have great credit. I was hoping to put $6000 down on something around $16000 over 4 years? I think it might just be easier to use student loans.

CnnmnSchnpps

iTrader: (1)

Great info, thank you! Not sure I will be buying a new car anytime soon, but good stuff...

How about tips on how to make Mazda honor it's warranty?

RMZ290: with that kind of down payment you shouldn't have any issue getting a loan. Won't get the best rate, but it will be better for you in the long run than getting your parents to cosign.

Revvittupp

Ok... Used cars are another animal. It can be practically day to day. I remember times where prices fluctuated on certain vehicles as much as 20% in a matter of 60-90 days(Big SUVs a couple of summers back). That being said, a used RX8 at a non mazda dealership is likely to be shipped to the auction for a big loss soon. So yeah, offer a nice low trade in like number and you may be surprised how flexible they can be. The mantra of many owners iwth used cars is that a small retiaal loss, is better then a small wholesale profit... menaing that even if going back to the auction, if they break even or even make a couple of dollars, it is better to lose a couple to add a customer to your database. What this means, is that a used car that has been on a delaers lot for more then 60 days HAS TO GO. If you can get a dealer in a vulnerable situation on a car, you may even get to talk frankly about his true cost and what would be a reasonable profit/loss at this point in time. If the car is fresh to a lot, they will not likely go into depth like this, if it's been there, they may pull everything right out and ask you to siimply bail them out for no profit. If you give me specific, vehicles and your area code, I could poke around and find some roundabout values for you, but it is tough.

As for financing... A creative finance manager will have NO problem getting you whatever rate your parents would qualify for alone, assuming a couple of things.

1. You don't have a lot of collections or derogatory credit, and have paid your only account perfectly since it's inception. This should also mean that you should also have a good beacon score, often times far higher then what your credit should suggest.

2. The debt and income situation looks good. BY this I mean that, you make enough to support the car yourselfr, and that your parents could also do the same.

Now, I would go further and say that someone worth their salt as a Finance Manager, should actually be able to get a "similar" rate, without your parents. It would be to your advantage, on that sum of money, to pay up to a whole percent higher to go alone. I say this as an individual account will increase your credit depth at a higher rate, thus you will be able to buy future cars/houses/boats easier and earlier, without help. On that ammount of money over 4 years, a percent makes... oh off the top of my head, probably $5 or $6 a month. (actually more like 4).

I personally recommend aplying online with Capital One. Their Blank Check program is the best in the business, with very competitive rates and unheard of flexibility. Also check any credit unions your family may belong to, as they may be even more competitive, and in your situation, felxibility isn't important. Doing this, will allow you to have a solid base from which to shop and negotiate.

FWIW, in this situation a dealer SHOULD be able to beat any financing you can get elsewhere. Indirect lending(Banks, through retail outlets) tends to be very strong in the area of youthful buyers. If you have a diploma or will shortly, Mazda would approve you alone on a new car, or perhaps a used Mazda, in a heartbeat with that down payment.

Hope this helped.

Revvittupp

ummm, didn't work behind those walls but...

Be nice, be courteous, accept blame when necessary, claim ignorance...

Take non-OEM equipment off prrior to coming in with issues.

Attempt in anyway to isolate yourself as a possible cause of an issue.

Be a good service customer(scheduled maintenance, repeat purchases...)

The certified stores will have write off power, and will therefore skirt around some issues with Good customers.

And, for the Mazda Tire and Wheel warranty... YOU DIDN"T HIT A CURB, IT WAS A ROCK, or a POTHOLE. Trust me, a curb is not considered part of the road, and therefore is not a road hazzard.

Hope that helps a bit too, but I'm not going to be surprised if it wasn't what you are looking for. The sad part is that the best one, is following the sched maintenance schedule at an single dealership repeatedly. A lot of the warranty process is in the hands of people, peopel that care how much profit they have already, or will in the future make off of you. There is NOTHING even close to the profit level of scheduled maintenance.

CnnmnSchnpps

iTrader: (1)

The tire and wheel coverage has proved quite useful

The reason I asked about warranty is that two months after I got my car the clutch exploded (and NO, wear items are not meant to shatter into a million bits!!) but the dealer refused to cover it. I talked with the Mazda regional rep and no dice. Pretty horrible experience overall - the dealer actually threatened me they will start charging a storage fee as I left the car there for a few days to look around for better prices for parts... Ended up about $1500 in the red for something that should have been covered under warranty. I still intend to take Mazda to court over this one...

And I understand the point aobut scheduled maintenance, but from my experience the worst thing you can do to your car is have someone else work on it... I do all work on it myself just to know nothing else will get messed up. Plus, buying the tools to do the job yourself is a better deal in the long run than paying some random tech to do it. Put a thousand monkeys in a room with an RX8 and you get a very very sad car....

RMZ290

Thanks a ton for the info, I really appreciate it. I should have a engineering degree in may, what would be a reasonable rate for me? I can get a school loan for $6000 at 0% for a year that I was also thinking about getting and paying for some of the car with.

Revvittupp

1. It can indeed. Typically a single Tire/Wheel replacement pays for 5 years of coverage at full markup.
2. You absolutely should. I say this with a caveat. Check your seperate warranty book(and state laws). At least in the state of MD(may be part of our lemon law) there is somethign called an adjustment peroid. The period is intended exactly as it sounds. As body panels get misalligned, allignments go bad, bulbs blow, and things that trigger the little bugs of a car in it's first year, they are covered under this section of warranty. As long as operator error can not be proved, ALL parts are typically covered during the first 12 months and 12k miles. An example of obvious operator error, is when cheap domestic car interior plastic is visually white from trying to FORCE things closed. Unless you already had a turbo, I'd think that would be hard to show for an exploded clutch.
3. That's why I said you porbably wouldn't be happy with my answer. I figured most that would seek out this site, wouldn't prefer to constantly bring their car to the dealership for maintenance. Me personally? I know tech's, I know who will touch my car, and I know that the owner of the dealership they work at paid a lot of money for them to learn how to service the car that I bring to them. That is far more qualified ot work on my car then me.

Revvittupp

No problem...
You would qualify for a college grad program, though Mazda, alone, without cosigner, that would likely be a high single digit rate of roughly 8%+/-. If your credit score, despite limited credit happens to be over 700(Equifax) or if you use your parents as a cosinger a rate of 7% +/- is pretty reasonable. Like I said, Applying at your own credit union and Capital one will give you a VERY solid base for your exact situation.

0% is obviously that, a perfect loan. I certainly wouldn't talk you out of that. I would however caution you this... If that is the same $6k you are talking about putting down, DO NOT MENTION THIS TO THE DEALER. The fact that you received the money, as proceeds from a loan. A down Payment that is borrowed is a violation of dealer/Bank agreements, and a Moral dealer would tell you, that you couldn't use it(or pretend not to hear it, or quite possibly they won't care). At any rate, essentially you would be defrauding the bank, and I'm not certain exactly how much they could come back on you, but I wouldn't try it(telling anyone). These laws are to the point that Credit Cards are not an acceptable form of downpayment. That part is VERY widely overlooked, and actually had an ongoing "feud" with a Dealer Principle that continued to deny any knowledge of the practice or the law itself. He overtly, intentionally turned a blind Eye with full intention of letting any blame fall squarely on my shoulders, all the while forcing me to contine ot take the payments.

RMZ290

Bought a RX-8 today. Rate came out to be 8. something %. Car is a 04 yellow sport. Got it For $16000, the dealer (nissan) actually paid 16750 at auction. Only has 17000 miles but they said they were having getting rid of it because of the color, they had three other ones that sold in a week after they got them. I think I got a decent deal, car looks like brand new, even has brand new tires on it.

Revvittupp

Great deal.
Did you see the auction receipt? When was it purchased?
Yellow is certainly not for everyone, and therefore prone to sit on dealer lots... When cars sit they cost money. At some point you take a loss to avoid a bigger one. It seems like you caught the wave. Good timing.
BTW, new tires are something dealers do very often. Typically a car sold as retail will be that. There certainly are benefits to purchasing from a major dealership chain. Full details, New rubber, good brakes, etc, but nothing compares to knowing that dealer is so afraid of his shadow, that the car WILL be in working order. Fewer surprises.

Was that rate all alone, or did your parents co-x?

ken-x8

Good point. In late 1979 I went shopping for a VW Rabbit. They were going for list, and most dealers/salesmen didn't even act like they wanted to deal with customers.

Finally found a good salesman. On a Sunday he actually came out of the office where everyone was watching football to take care of a customer (me). He searched the area to find one with the color and equipment I wanted. By finding what I wanted, without extra stuff, he saved me more money than any amount of sharp negotiating would have. Left me with a very good feeling, which ultimately paid off in business for the service department.

That was one of two pleasant new car buying experiences. The second was when I bought my 8. S-plan. Take the negotiation out of the deal, and buying a new car becomes very pleasant. Every other new car purchase left me pissed at the salesman or dealer in some way.

Ken

RMZ290

I had my mother cosign, rate was in high 8's. I'll probably pay it off in a year anyways. I figured I had to take a hit sometime.


Yeah, they auction receipt was stapled to the title. It was actually a nissan dealer that seemed like nice people, didn't seem as scumbagish as some of the other high volume dealers in the area, nice people. I'd go back and buy another car from them in the future. They had bought three other rx's at auctions and they sold within a week of being put out for sale. This one was bought in may and sold twice but the people could not get financing. They said it was the color that made it hard to sell. I can deal with the yellow for the price. They were asking 19000-20000 all summer.

Revvittupp

No problem, with a cosigner you will still accomplish your goal of building your own credit. High 8's is a fair rate, a bit high, but then again you "stole" the car. If you are part of a credit union you could always refi into your name alone and probably still get a lower rate, of course after yoiu have made at least 3-6 payments.
Like I said, when a car sits since MAY, they are willing to move quite a bit. Good timing.
I personally find it important that you had a good experience. I see actual cash value in that. Dealing with dicks is not worth my time.

RMZ290

Some pics of the car, can't wait to pick it up tomorrow night.

http://img.photobucket.com/albums/v3...N565x421_A.jpg
http://img.photobucket.com/albums/v3...65x421_A56.jpg
http://img.photobucket.com/albums/v3...65x421_A56.jpg
http://img.photobucket.com/albums/v3...65x421_A56.jpg