Ah the internet… I am just trying to help the guy. But this happens often here because the first assumption most people have is they have to pay MSRP for a lease.
Even Truecar is 5-7% under invoice, good, but not great. A guy on another forum posted he just bought a Shadow Black Fiesta ST for $17,567.
MSRP is $21,460 and the rebate is only $1,000 for a purchase, it’s $1,600 for a lease.
Savings $3,893
Don’t let anybody make the excuse there are tiny margins in small cars. The truth is some dealers will just give you a price you can’t say no too, while others will make you work for it.
Honda sales are such that most models especially the CRV are popular and difficult to get great deals on, but not impossible.
Went to CarMax today and boy am I glad I did. They offered me 23k for my car, while the two dealers I went to offered me 19k and 20k.
I’ll probably be going there on Saturday to give them the car. Saves me the hassle of dealing with a car trade in AND actually getting a car from the same dealer.
The timing kind of stinks because today is the last day of the month and I don’t have any time to actually go to dealers and go back and forth between e-mails, unfortunately. With Honda is the difference really going to be that much regardless of what time of the month or year it is?
I think I finally understand what you’re telling me to do. Sorry, I never got the chance top actually sit down and thoroughly read your suggestions. I like the idea of emailing a list of dealers that I am willing to shop with. Love the idea actually. That’s how I prefer to negotiate. So basically mention I want the car and want their lowest TOTAL price that they can offer me. They don’t need to know of its a lease or finance at all until AFTER we agree on a price. Am I understanding that correctly? If so, what happens when we agree on a total price? Do I actually go in to dealer and tell them I want to lease or finance, or do I handle all of that via email as well?
Also, I know you say to wait until July when the new models will be arriving soon so they’ll be more pressured to get rid of the 2016 models but what if I need the car before? When would be the best time in that situation? Near the end of the month?
Third, how varied are the incentives and how often do they change? I see on one of my local dealers that their Honda accord special ends on the 4th of April. Does that mean on the 5th there will be a new one? I’m not really sure how they work and if they’re worth waiting for.
Sorry for so many questions but I want to make sure I’m getting the best possible deal and won’t walk out feeling ripped off like people usually do from a dealer. I really appreciate all of the feedback and input. It’s all very helpful.
That is what I am saying. When you agree on price, then make an appointment with that dealer. Email the other dealers to see if they will beat that offer. If not then thank them for their time.
Make sure you take that EMAIL with you and HIGHLIGHT the itemize total.
You don’t need loan pre-approval unless you change your mind about leasing.
May and July will be incentive heavy. Memorial Day Weekend, a big sales week for car dealers and July 4th another big day and also July is about the time most car companies stop taking orders for the current MY (Model Year).
Often current incentives are renewed the next day or next week if it ends on a weekend.
As I said incentives should be more juicy in May, June and July.
@Moose Moose, good job on the carmax offer. Sometimes you get low balled sometimes you get lucky. Take it and don’t look back, you got lucky on such a high number. I think there’s a 7 day price guarantee but there’s also a milage limit (i believe it’s 300 mi, look at your paperwork). You said you lived far away so make sure you don’t exceed the milage limit on the offer.
Dealing on a new car lease is much much easier when not dealing with a trade in so it’s another reason to get rid of it now.
Also, you’ll be surprised how much they will sell the car for. If they’re keeping it on the lot for resale, i would think $30k+.
Look at their site in a week or so when they put up the new car, you’ll be shocked.
Great ideas. Thank you for all the links as well. They’re all very very helpful. Please let me know if you have any others. I’d really appreciate that.
If I do decide to go with a loan, should I try through a credit union before going into the dealer to see if the dealer can beat the credit union rate?
Completely forgot about Memorial Day, which isn’t too far away, so that’s great. Should I begin e-mailing them a week or so before Memorial Day so that way when the deal is agreed upon, I can go in on Memorial Day?
Thank you. I was pleasantly surprised as well. I live about 65 miles away from there and drove back yesterday and won’t be driving the car again until I go back there so that should be fine. I’ll check the mileage limit just in case. You’re right about the 7 day guarantee though.
If they sell the car for 30k+ I’ll be very surprised, but more power to them if they can pull it off. The brand new models go for about 28k, which is still pretty profitable for them.
A Carmax sales person told me they put them on the lot for a very speculative price and gradually lower it the longer it sits, even though you still can not technically negotiate. Well, I negotiated for a set of tires on an RX 350 since one had a nail in it and they were worn to almost nothing.
You have to join Credit Unions, which has it’s benefits as the relationships are more personal. But once you are approved to join you can apply for pre-approval.
With your current FICO score, I don’t know if it’s worth a dealership shopping it. They might be able to beat it but at the cost of 5-10 inquiries which isn’t that big a deal overall but will mean about a 1-2 point drop in your FICO score when all is said and done.
I would take what Capital One gives you and if it’s over 2% APR, re-finance it with a Credit Union in six-seven months.
With MSD’s you can reduce your money factor, the only downside is if you end the lease early you’ll be paying some fees out of it.
@Anthony_Thomas you can’t fight carmax on trade in value, it is what it is. In my case, the car was in bad shape, i was ready to get out of it so i didn’t care. It would have cost me a lot to fix.
Dealers generally will low ball you or raise the price on the car you want to buy from them (or both).
I know exactly what’s going to happen to any car in good condition, under 50,000 miles, the price will be the same retail price from KBB or higher when they try and sell it.
They can knock $1,000-$2,000 off the price and still make a profit.
I’m having a bit of trouble understanding what you mean. Do I join a credit union FIRST and then I can apply for pre-approval from Capital One’s Auto Navigator? Or are they two separate things?
Or do I just apply for Capital One and see what they approve me for and if it’s not low enough for me, apply for a credit union later on?
Also, now that I’ve paid the entirety of my car loan via CarMax, will that help my credit score a lot and is it worth waiting for it to go up? Regardless I’ll be waiting AT LEAST until Memorial Day.
Change where you bank or find out how much your APR and the amount the loan will be with pre-approval?
The caveat with Credit Unions is your must join to apply for any services. If all you want is to be armed with a pre-approval when you go into a dealership, then use Capital One’s Auto Navigator.
I also suggested Capital One because they tend to be very good with people with less than stellar credit scores.
The point is you want pre-approval so when dealership pull your credit, then tell you you’ll get X APR based on X. By LAW dealers in most states are allowed to move the APR up or down two-three percentage points. This is favorable to the dealer because some banks will give them a kick back if you can get more people in at a high APR.
This is also why it’s important to show up with your recent credit score. I recommend myFICO because they also give you your FICO Auto Enhanced score which many auto lenders use. Then your not surprised like you where when they told you that your FICO score was 64x.
As for paying off your car loan, your score might go up because your debt to income ratio has been reduced but I wouldn’t count on it. You get a minor score bump when you car loan or lease first shows up and over time you’ll get another bump as you make your payments. But overall it’s easier to mess up your credit with a car loan by getting it repo’ed or missing payments…
The best thing it will do is show lenders that you are responsible with car loans. With some lenders that will get you a lower APR or Money Factor.
