This week’s post has nothing to do with architecture, but rather simply running a business and dealing with one of the more expensive costs: buying a vehicle for your business.
Many people still buy a new vehicle (“car”) in the old-school analog way: driving to their local car lot and immediately letting the car salesperson assume control of the situation. Big mistake.
Why? Because with today’s technology (Internet) you can do yourself a world of good performing research and checking prices of the vehicle you want with 25 miles, 50 miles, 100 miles, 500 miles or even thousands of miles away. What’s that? You believe that your local car dealership will be pretty much the same as those in any other town? No, they are not. How can we be so sure? Because we have done this multiple times and saved tens of thousands of dollars in the process.
Big secret: All automotive dealerships do NOT charge the same price for the same vehicle. Are they truly the same vehicle? Yes; they are. How do we know? Because vehicles are 99% of the time a commodity. You are not talking about custom house design services here, where every Architect is different. We are talking about vehicles made on an assembly line and once you have the same make, model, color and options, they are identical. A commodity. And paying more for a commodity simply to do business with a dealer closest to you either means that you are a rich person who doesn’t care if they get the best deal on their new car, or you’re not interested in being inconvenienced by driving farther to get a better deal. (however there are other things to consider…later on in this article).
Driving how much farther? It could be 75 miles, 100 miles, 200 miles or even 600 miles or more. We suggest calling it quits at 600 miles. That’s about as far as most healthy adults can drive in one very long day behind the wheel. Now then: there are dangers doing this sort of thing: you could get into an accident while driving. Or, if you are driving over the speed limit, you could get a ticket or even be arrested, and/or be required to return to face a court appearance, depending on how much over the limit you were traveling. Recommendation: don’t speed.
Obey traffic laws, drive defensively and leave lots of car lengths between you and other vehicles while driving for your good deal, so it doesn’t become a nightmare rather than a dream. In 2 words: be careful. And if you can’t remain awake for up to 12 hours at a time while driving, don’t do this. It’s not worth your life to save even several thousand dollars on your vehicle purchases. Stay safe.
On the other hand, if you might consider a day there and spending a night at a hotel and then driving back the next day a reasonable mini-vacation to see some part of the country to which you’ve never been, and you have at least a couple of people, such as a husband and wife doing this, then you might turn this into a little vacation from which you return with a new car. Pretty neat!
All right then, let’s get down to it. How do you buy vehicles these days to save the most cash? Let’s put this into a few steps:
1. DO RESEARCH ONLINE
Find several vehicles that appeal to your businesses’ needs. Compare mileage, features, storage, comfort, luxury, safety ratings, dependability and yes: price. Where do you do this research? We suggest starting with Firefox Mozilla as your browser. Then look at various manufacturer’s websites, if you wish, understanding that everything you see won’t ever mention negative things. After you read enough of that, then go online to Edmunds.
2. START A BIDDING WAR FOR YOUR AUTOMOTIVE BUSINESS:
Edmunds will have online professional assessment reviews and consumer reviews of just about any vehicle you might have in mind. They also have this really nifty feature where you can send out an email blast after you build your vehicle right on their website and obtain prices from various dealers in your local area.
You’ll be surprised; some dealers will really want your business and others appear that they could care less. It is amazing the difference in attitudes you’ll encounter. Don’t be at all embarrassed to tell one dealer that another one in another town gave you a price of such and so and then ask them if they can do better? After all: you work hard for your money, don’t you? Don’t give it away for exactly the same vehicle offered by another dealer. And: it’s okay to go back and forth between dealers, telling them the other dealership just beat their offer by another several hundred dollars, or by thousands of dollars. Don’t be rude; but for gosh sakes, don’t be shy either.
There’s a critical difference in this approach: YOU have taken control of the car-buying experience. You have not allowed the car dealer to control you, which is death to your getting the best deal.
3. HOW TO HANDLE YOUR TRADE-IN
EVERY car dealer is going to ask you to do this and demand that you do this: “come on by! We can’t possibly tell you how much we can give you for your car unless we see it in person!” Baloney.
Once again: The vehicle you’re driving is also a commodity. Appraise it through Edmunds. Click on their Used car tabs and appraise button. Perhaps Edmunds won’t have every single feature indicated, but they’ll get close. And you’ll see 3 numbers: Trade-in value, Sale to a Private Party value and Dealer Retail value. What you’ll want to say to the dealers with whom you are negotiating: “Edmunds says my trade-in value is this, and that you, as a car dealer should be able to retail it for this. Also, I have a firm commitment from this dealer to give me the Edmunds’ trade-in value.
That way, if the dealer you’re talking to tries to low-ball you, you have an authoritative source from which to quote a reasonable value for your car. They will then tell you their “black book” value, which is always very much lower than Edmunds: don’t accept that value and tell them that if they can’t do better, you’re going to have to shop elsewhere. They better adjust their attitude quickly, or you don’t want to do business with those “black book” dealers.
Now then, the dealers are going to say that they still can’t quote you a trade-in value because they don’t know the condition of your vehicle. Here’s how you handle that: take digital photos of your vehicle, inside and out, about 10 of them, showing the odometer, sunroof, interior seating, dashboard, with the vehicle turned on, all around the exterior, at least one close-up of one tire and showing wheels. Do Not lie. If you have damage you must tell them, or you will have a big problem later. If your car is in very good condition, then stick up for yourself and say so. Notice that the Edmunds valuations have much to do with the condition. If you’ve serviced it in accordance with the manufacturer’s instructions, say so, and tell them that you have the documented visits to the car dealership where you have had it serviced and follow-through with that when you show up to trade.
Okay, here’s the zinger and your main way to deal with dealers who demand that you drive all over creation so that they can see your car in person: Trust. That’s right. Tell them to trust you that what you say is true about your vehicle and if you have misrepresented it, then they will have the right to change the deal when you do appear at their dealership. So: be very honest about the condition of your vehicle. They will know the truth when you appear and you don’t want to drive hundreds of miles to be disappointed that they actually noticed the giant ding in your left front door panel. But if your vehicle is in good condition, then fight for that trade-in value BEFORE you go all over the place. Tell them to accept the Edmunds’ value, because if they don’t, you are probably going to do a deal elsewhere and get it. And you will.
Under no circumstances allow anyone from any dealership to bully you into forcing you to waste your time driving to their lot BEFORE you have what we call a “Gentlemen’s deal.” You want all the dealerships to provide you with a price DIFFERENCE between your trade-in value and the discounted price of the new vehicle you want. Without that, it’s not worth your time to travel to any dealer. Only travel to THE dealer who gives you the best deal, based on the above methods. Do NOT spend time on dealers who are not pleasant and agreeable and willing to give you a good price based on the above methods. You can be assured, there are decent and nice dealers who will, although there may be a few who won’t. Ignore those who won’t do business your way, with you in control of the situation.
4. SHOPPING FOR THE BEST PRICE
It’s about that simple, but not quite. You will likely find the lowest prices for the vehicle you want there. Learn how to click on the “Cars for Sale” tab on the far left, then figure out the declarations of the make, model, trim level and features. We don’t click on many of the features, as they can be a little flaky. We prefer to indicate our zip code, then up to 600 miles or so (to the dealer from your zip), make, model, trim level, New, mileage under 15,000, click on manual or automatic, and 4WD/AWD (if you want that), then move on down to declaring our own custom features in the box near the bottom, such as: 4×4, sunroof, leather, diesel, etc. But not too many and don’t use language that the site might not understand. You’ll figure it out. Simpler is better.
If you click on too many of the AutoTrader choices, you can end up not finding ANY vehicles that match what you want. Then when your choices pop up, select the sort filter to be from Low to High, rather than vice-versa.
Now: finally: you should see the lowest priced vehicle meeting your criteria offered in the distance range you selected. Okay: sounds simple, huh. Nope. Some dealers (quite a few) will unfortunately engage in “come-on” tactics where they will list every single possible rebate possible only to be granted to veterans, or students, or people with 3 eyes, 4 arms, who come into the dealership on a pogo stick. Watch out for those declarations!
Now then, select the AutoTrader “EMAIL this dealer” when you’re looking at their listing. You will only have so many letters they will allow in your message, so make sure you tell them you’re interested in their Stock # such and so and that your trade-in VIN# is such and so and that it has a sunroof, running boards, beige leather, power driver’s seat, pearl white paint, new tires and whatever else you can cram into your brief message. Copy your email message and paste it into MS Word in another window on your monitor (you’ll find out why in a moment). Send that email to that dealer.
Okay: go to the next lowest vehicle meeting your criteria in that list that appeared.
Do the email again, pasting the same message you sent to the first, least expensive dealer (from your copy you made on MS Word). By the way, in all of your messages, verify if the price listed in fact is the real price if you are not a veteran (unless you are), not a student (unless you are) and don’t have 3 eyes and won’t be coming in to their dealership on your pogo stick all the way from Fort Wayne, Indiana. You need to obtain a clear answer to that question, to insure that the price you are seeing is in fact the real price to most buyers under most circumstances that pertain to you. Otherwise, you are kidding yourself and playing into those dealer’s hands. Don’t play that game. You want real numbers.
5. DEALING WITH DEALERS
At some point, you are going to be receiving phone calls from dealers and multiple emails. They do want your business and they want your money. You are glad to give them your money, just not more that you need to, in order to consummate a deal.
RULE #1: Be Nice. Don’t be a jerk. At some times in our lives we have to put up with unreasonable, unpleasant people and that’s no fun for anyone. Life’s too short. Be pleasant and not demanding. It’s not necessary to be otherwise. Thank the dealers for helping you and considering your offers. They are hard working people just trying to earn a living, like you. Some common courtesies will be appreciated.
Be very specific about the deal you want: which will typically be something like this:
They may ask you: “What can we do to earn your business here today?”
This is your answer:
Sell me that car (truck, SUV) I want for between $3,000 to $5,000 difference Out The Door, including my trade-in. I don’t care how you run the numbers, as long as that is the result. You should know that you are in competition with other dealers. The lowest price dealer at this point is at $4,950 difference Out The Door.”
That’s magic. You have told them the number to beat and the range in which to be, in order to obtain your business. Once again: don’t be a jerk. These people have to make a living. So: make sure that your trade-in value and Edmunds True Market Value and TrueCar price range for the new vehicle has a solid basis in what others have paid before you. You’ll find that some dealers don’t appreciate at all the fact that you know about such things as Dealer Holdback (be careful there: only talk about that if they say they aren’t making anything if they sell to you below dealer Factory Invoice: that is sacred territory in their profit margins). And some dealers just flat out won’t like you knowing so much about buying cars that eliminates their larger margins that they would prefer to enjoy. Some of them may even get rude with you and tell you to buy your car somewhere else (happened to us at one western NC Toyota dealer).
One of the best things you can do is to synopsize what you want and put it in writing in an email, along with screen captures of any supporting research, such as the terrific TrueCar bar charts displaying the sale of your exact desired new vehicle either locally or across the entire USA for the last several months. Kind of hard for dealers to argue with what a fair price is, when you are armed with information like that!
6. YOUR SELECTED DEALER
At some point, you’re going to find “your dealer”. The guy or gal that does business your way, whose manager doesn’t jerk you around and who provides you a fair trade-in value and a nicely discounted price on the vehicle you want for your business. You need to make sure that you obtain a purchase order with the VIN# of the vehicle you’re going to buy, emailed to you. You don’t want a bait and switch to happen, especially after driving hundreds of miles. And wash and vacuum your trade-in vehicle! Don’t show up expecting the best trade-in value if your car is a mess. Be courteous of the dealer, just as you expect the same to you. Talk to not only your salesperson, but also their manager, documenting your trade-in value, as long as its condition is what you claim. You don’t want a nasty surprise with a dealer who will change that value when you appear, unless you have not been honest with them.
Ask them to have as much of the paperwork done as possible, because you’re going to be driving a long way to get there (if you are). However, before you drive hundreds of miles, do make the rounds with emails and phone calls, within perhaps 100 miles of your location to give them all one last chance to meet or beat the more distant dealer’s price. You may be surprised; some local dealer might finally understand that you are serious about driving to Ohio, if they don’t do better. So: hopefully you can obtain the best price from a local dealer when they realize you are willing to drive much farther for a better deal. And sure: do the local deal if they will work with you.
Read the reviews of other consumers from the various dealers with whom you are considering doing business. Every dealer’s going to have some people that believe when they spent $7,000 for a used vehicle that they felt it should be perfect and were angry that they had to make some unexpected repairs. Welcome to life. Especially if you’re buying a new vehicle, don’t let used car buyers’ experience color your thinking too much.
When you’ve documented your deal, realize that if you are buying from a dealer in another State, that you are likely going to be making a trip to your local DMV to transfer your plates, register the new vehicle and pay tax on the difference between your trade-in value and the cost of the new car. That’s a little hassle that comes with the territory and one of the prices you pay to shop from a larger area. Out of state dealers rarely are able to do the above. Ask about that; they’ll probably tell you that’s on you and beyond the amount you pay them.
7. THE BUY
Finally: you prepare for your trip, book a dog-friendly hotel for the trip back so Bowser has a place to stay with you and your spouse, pack a small suitcase and drive many miles to get to the dealer from far away. Drive safely. Phone your salesperson every 3 or 4 hours, to let them know you are on the way and will they have the paperwork ready when you arrive at about ” 2PM?” (or whenever).
When you arrive at the dealer, park near the entrance to the building where your salesperson will be. Walk inside, introduce yourself to the receptionist and pleasantly ask if Mike or Barbara (or whoever your salesperson is) is available, and that you just drove a very long way to buy a new car. Smile!
Mike or Barbara will come forth and set you down and start going over some paperwork. Then they will give you the keys to the new car and you will give them the keys to your trade. You will drive theirs and they will drive yours. You come back and ask for them again and they will then have you probably escorted to their Finance Manager, who often is the person who handles the majority of the paperwork. Then that person will hand you back to the salesperson who will go over the operation of your new vehicle. Make sure they pair your phone to the car’s bluetooth before you leave.
That’s about it. Enjoy your new vehicle. And don’t forget to do the above required things at your local County DMV, if you bought from out of state.
Prepare well. Don’t be in a hurry. Take several days, weeks or months to do the above. Don’t do anything that endangers you and your loved ones. Be safe and protect yourselves at all times, particularly when driving.
Oh: one afterthought: check with your Accountant: it is our understanding that vehicles having a 6000# GVWR (Gross Vehicle Weight Ratio) (not the actual weight of the vehicle) you can write off entirely for the year in which you purchased it. Lighter vehicles, according to Accountants with whom we have spoken have told us that other vehicles can also be depreciated entirely, but over a 5-year period. So: if you need a larger vehicle, you might want to consider those having a GVWR of at least 6,000#. But if you don’t need the functionality of such a vehicle, then go for the lighter ones, realizing that you will need more years in which to depreciate the cost. But verify your understandings with your own Accountant before embarking on a course of action.
A LOCAL ADVANTAGE
And another final thought: after all the above, factor this into your considerations: many new car dealers now offer free oil changes for life and free powertrain warrantee for life and other offers, IF you buy from them and have your vehicle serviced from them. This is where buying local adds value to the equation. Hopefully all of your shopping through the Internet will convince local dealers to be as reasonable with you as the far-flung dealers. Do give your business to the local companies if is makes sense to you. If the locals are within $1k+/- you might want to give them the deal; because over the years, all that oil and possible powertrain repairs down the road could tip your long-term investment in favor of the people who service your car or truck closest to you.
We just went through the above process twice in late 2015: it works.