Being out in the real world and still on my used car from high school, it was time to get a new vehicle. I bought my 1993 Toyota Camry at the age of 16 for $2900. Other than transmission replacement 2 years ago its been a great car. It was falling apart and was just a few ticks away from 225,000 miles on the odometer. I am a bit of a car enthusiast but Weakonomics kept me in line while researching cars. I decided on the 2008 Honda Accord EX because of its standard features, reliability, and its compromise between ride and handling.
The sticker price on this vehicle was $24,495 (including destination). That was out of my target price range. I then considered the 2007 or earlier Accord, but the standard features I wanted were absent. If I wanted to save some money on this car, I was going to have to haggle. Here’s what I did:
I went to Honda’s website and obtained a list of 8 local Honda dealers. By local I mean anything within a 90 minute drive. I then created a generic email and sent it to all the dealers. This email was sent to the internet sales departments and it told them I knew what I wanted. I identified the make, model, trim, and color of the car I wanted. Research is my hobby and saving money is my passion so I knew exactly what I needed to say. Dealers save money using Internet sales, they get kickbacks for volume selling (from the manufacturer), and I played the fact that 2008 was going to be a slow year for everyone to my advantage. Everyone came back with their best quotes, ranging from above sticker price to well below.
I narrowed the dealers down to the top 3 and played them against each other (never telling them what dealers I was working with). Of 8 dealers, there are always a few looking to move cars and I decided on one for the price of $21,343.69. A savings of $3,151.31 or 13%.
If you want to try this, you won’t hurt anything and please tell us all how it goes. Make sure you ask the dealers for the “out the door” or OTD price. This includes dealer fees, taxes, and title etc… Your taxes and fees will be different depending on dealership and state. My OTD price was $22,500. Special thanks goes to the Edmunds forums for their input on the prices I should expect to pay.
I have been expecting to replace my car for a few years so I had saved up $11,000 for a down payment. I financed the other half of the car through the dealer and Chase Auto Finance. While rates are always important it was less so for me because I am making accelerated payments to pay off the loan faster. I went with a 3 year loan but expect to have it paid off by January 2009.