I've had company cars for virtually my whole career, but am about to make a move and I will no longer have one, so I have to buy a car!
I want a used car, and I am leaning towards buying from a 'big name' dealer (statutory warranty, etc). What are the best methods to negotiate the prices here? eg, Are cash offers well received? Or should I look to finance it, and then pay it out real quick?
I'm looking to get a 5-10yo hatch, and have a budget of <$10k. I've seen a car online for about $9,890 or something. What sort of margin is likely to be in this, and what sort of 'best price' should I be looking at?
I don't move jobs until early next month, so am I better waiting until late in the month?
Wobbly,
I worked at a car dealer for a few years (flame suit one) and happy to share my experience.
There are several different types of warranty here in VIC
1. Statutory warranty. This has to be legally offered by any car dealer selling a vehicle:
A licensed motor car trader must provide a statutory warranty if the car is less than 10 years old and has travelled less than 160,000 kilometres. Its age is determined by the build date stamped on its build plate. Usually, this is found on the firewall between the engine and passenger compartments.
A statutory warranty lasts for three months or 5000 kilometres, whichever occurs first.
The trader must repair any faults covered during the warranty period in order to ensure the car is in a reasonable condition for its age.
2. Factory Warranty (the best): This comes with every new car and varies between each manufacturer. Remember though that just because Mitsubishi state a 10 year warranty doesn’t mean that everything is covered so read the fine print.
3. Extended warranty: These also come in two different flavours
A: Extended warranty: Something the dealer has purchased for a couple of hundred bucks from an underwriter such as Lloyds of London. These are the most common warranties offered by second hard dealers and are not worth the paper they are written on. Read the fine print and you’ll see things like labour not being covered, engine heads being covered but the head gasket is not blah blah blah.
B: Extended factor warranty that is usually an exact replica of the new car warranty. These are normally offered on “select” cars usually less than 5 years old.
If you are set on purchasing from a dealer, just remind yourself that the only thing extra you are getting is that 3 month warranty which when you consider how long you’ll own the car for is a very high cost to pay. Expect to pay approx. 20- 30% above private sale prices
Whilst not all dealers are shonks, they are very good at tarting up vehicles for sale and polishing a turd so to speak so don’t hooked into the nice shiny tyres and gleaming bumper bar.
The best advice I can give you is to look for the best car within your price range (Private will offer better value) and once you decide on a price, state to the owner that your offer is subject to a final vehicle inspection. If they do not agree, walk (no run) away.
RACV are pretty limited now with their inspection and you now have to take the car to them which for most sellers is a right royal PITA (and can be a little unreasonable). The better service is a place called
http://www.stateroads.com.au/ who do onsite inspections so are much more convenient for all parties. It will be the best $300 you ever spend and will give you infinitely more peace of mind that the piece of toilet paper the car dealer will give.
I seem to be the friend everyone calls when they go car hunting as I spent too much of my youth under the hood of a car but even I will still always pay for a vehicle inspection as no matter how educated you are, a vehicle purchase involves emotion that can sometimes cloud your judgment.
If you get the impression I’m trying to steer you away from paying to much from a dealer, you’re right. I don’t see the value in them but that’s just my personal preference.
If you absolutely have took buy from a dealer (as sometime you can still get a bargain), never go and sit down in their office as you’ll then be subjected to the merry go round that is “good cop, bad cop” where the salesman will keep going back into the sales managers office trying to get you the best deal when all they are doing is trying to crunch you for more money.
By remaining out in the yard, you’re out of the lions den and can walk away much more easily and this unnerves the salesman. If they think they’ve got you in their office, they’ll try every trick on the book the squeeze every last drop form you.
Most dealers work on monthly quota’s so you may get a better deal at the end of the month however it will depend more on how long the stock has been sitting in the yard. If it’s older (which is not necessarily a bad thing) they will be keener to move it and hence have more room to wriggle.
Good luck
B.D