Why Things Are the Way They Are:

Market Transparency: - 15+ years ago, buyers lacked pricing tools; now, buyers and dealers use tools like TrueCar to evaluate fair market value. - Cars cost dealers ~$45/day to keep in inventory, encouraging faster turnover and competitive pricing.

Dealer Strategies: - Dealers price cars in three ways: 1. High Pricing: Wait for less-informed buyers. 2. Fair Pricing: Rely on reputation and value-added services. 3. Low Pricing: Make up the difference with fees or mandatory add-ons.

Profit Sources: - Dealers make money through: - Car price. - Low trade-in offers. - Finance office products (warranties, GAP insurance, etc.). - Lender referral bonuses. - Accessories and add-ons. - Dealer fees.

Steps to Buy a Car:

Choose the Right Car: - Identify key priorities (e.g., safety, price, visibility). - Use resources like IIHS.com to find highly rated models.
- Example: If safety is a priority, check for Top Safety Pick+ models (e.g., Mazda CX-5, Subaru Forester).

Appraise Your Trade-In: - Get a baseline value from CarMax or a similar service. Use this as power when negotiating trade-in offers.

Research Dealers: - Use DealerRater.com to identify reputable dealers. - Select a salesperson with good reviews or a bio that resonates with you.

Understand Incentives: - Search for current manufacturer offers (e.g., "Subaru current offers"). - Look out for misleading discounts tied to rare qualifications (e.g., owning a specific brand of tractor).

Use Pricing Tools: - Services like TrueCar show average discounts for specific models in your area. Use this info to set realistic expectations.

Negotiate Strategically: - Focus on the total deal, not just the car's price. - Be prepared to ask for additional products (e.g., maintenance plans, warranties) in exchange for a better car price.

Negotiation Strategy:

Barter for the Entire Deal: - Offer a competitive car price while agreeing to buy useful finance products.
- Example: "I'll pay $1,000 less for the car if I purchase the extended warranty and maintenance plan.

Be Transparent: - Share your CarMax trade-in appraisal and ask if the dealer can match or beat it.

Mutual Benefit: - Dealers may accept lower car prices if they can sell profitable finance products. - Ensure any add-ons (e.g., warranties) are reasonably priced.

Tips for Success:

Ask About Finance Products: - Confirm reasonable pricing for warranties, maintenance plans, and GAP insurance. - Example: Subaru Added Security Gold Plus Plan for long-term savings on repairs.

Don't Cancel Products: - Canceling products after a deal damages the trust and structure of the agreement.

Beware of "Too Good to Be True" Prices: - The cheapest car often has hidden fees, damage, or issues.

Focus on Value: - Instead of chasing a rock-bottom price, look for a deal that includes valuable extras.

Summing it up:

• Be realistic: The days of massive discounts are largely gone due to market transparency.
• Negotiate smartly: Bundle finance products for a mutually beneficial deal.
• Do your research: Use online tools and trusted dealerships to save time and energy.
• Think long-term: Choose quality add-ons that genuinely enhance your car ownership experience.

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