How to get a screaming car deal during the auto meltdown

With
- car sales taking a historic dive and
- hundreds of cars stacking up in inventory
- as sales staff spend their days with their hands in their pockets when they're not smoking cigarettes
- and many dealers in a liquidity crunch and in danger of going under
- easy credit over, making it hard for people who want to buy a car to get financed, reducing the number of potential customers
- people who can afford to buy now hunkering down and conserving their resources
- while we enter the very slowest car buying time of the year, the Christmas season,

I'm interested in discussing the best opportunities for getting a hilariously good car deal right now, especially for those of us who could walk in and pay "cash." (In quotes since it may be AOR cash or HELOC proceeds.)

An angle I've been pursuing is shopping for 2005 model imports, usually in dealers' inventory, and, if you Carfax them, usually off a three-year lease with at least some factory warranty remaining. )There are entire independent car lots in my town that have sprung up to sell off-lease luxury makes in great condition, many with low miles.) You can get Volvos for less than half of what was their new MSRP three years ago. Nice options like leather and sunroof cost mere pennies extra. Dealers are pricing the cars much more aggressively than private sellers, who seem in denial and not pricing the cars realistically. Are there other makes where you've observed a glut of cars and attractive pricing? There's a weirdly flat curve where an 06 costs much more than an 05, but an 04 or 03 are not much cheaper than an 05.

What about new cars? What are the best incentives you've seen? I imagine there's some sort of floor price, even in this market, as no one wants to sell below actual cost, especially when they're not making money. But if there are extra cars, they aren't getting any newer sitting there. What's the best markdown you've seen? Or should we just wait for the cars to get repoed by dealer credit line providers, who will then liquidate them? How would you expect them to be liquidated? I imagine used car inventories repoed will simply go to auction, where they'll drag down auction prices and therefore used car prices in general.

Any other ways those of us who kept our powder dry while everyone else was leasing a new car every two years can meet our automotive need/want/lust on the cheap in this environment?

Or should we hold off a month or two more and wait for things to get worse, making prices even cheaper?

Looking forward to the discussion.

You're right... Used car prices are amazing right now. I'm also looking at used imports, but 06 models and above. Most of the luxury imports that were under lease in early 08 are still sitting on dealer lots and the deals to get rid of them are amazing. For example, right now I'm looking at an off-lease 2006 MB C280 4MATIC, with 26k miles for under $18.5 and it's still under factory warranty.

Share any deals you guys are seeing out there...

I am also interested in looking for a good CAR deals. I am looking for a nice 7 Seater fully loaded for a goooood price. Appreciate your suggestions.

I just bought a 2003 4x4 4runner v8 sport edition for 9900. Sold new for >30K. Search craigslist for someone to take you to a dealers only auction for a nominal fee. The deals at auction are crazy.

Dealers used to have incentive to make year end numbers, and would give crazy deals on Dec 31. Now that they're not going to make any quotas, and that they may be in line as a creditor to collect on any incentives, I'm not sure that that will be the case any more. But worth a try.

mojoworkin said: "Target Price= (MSRP or Sale price - Low ball offer / 2 plus the low ball offer)"

Absolut9: What does this mean? Thanks in advance.

Take the MSRP or Sale Price and subtract the low ball offer from it, divide that number by 2 and then add the low ball offer back in. For example, let's say the sale price of this car is $15,000 and the low ball offer that you got was $10,000.

(15,000 - 10,000) / 2 + 10,000 = $12,500

the formula above would yield a target price of $12,500. Hope that helps.

Absolut9 said: mojoworkin said: "Target Price= (MSRP or Sale price - Low ball offer / 2 plus the low ball offer)"

Absolut9: What does this mean? Thanks in advance.

Take the MSRP or Sale Price and subtract the low ball offer from it, divide that number by 2 and then add the low ball offer back in. For example, let's say the sale price of this car is $15,000 and the low ball offer that you got was $10,000.

(15,000 - 10,000) / 2 + 10,000 = $12,500

the formula above would yield a target price of $12,500. Hope that helps.Yep. Thanks.

rizorith said: My mom is in the same boat. She got an offer on a 2007 Audi A4, loaded with everything except the AWD for 20.5K plus tax/license. This is with 18,000 miles and before she really even tried to bargain. The blue book in a dealer was something like 25.5K. She hasn't bitten yet but I'm curious to see what she can get.

When you say she got an offer, do you mean this is what the dealer offered to sell it to her for? Your wording makes it seem like she is the one selling the Audi. Of course, I could just need my afternoon caffeine fix!

FWIW, my girlfriend and I are about to embark on a journey to find her the best deal on a low mileage used or new 08/09 Honda Accord coupe. Should be fun dealing with some of these dealers. As far as getting a price on a new one, we will probably figure out the exact options we want and e-mail all dealers in a xxx mile radius to see what they come back with and go from there.

And let's not forget to forecast the environment: My guess is it will only get more favorable for buyers, probably into January at least.

scripta said: Absolut9 said: mojoworkin said: "Target Price= (MSRP or Sale price - Low ball offer / 2 plus the low ball offer)"

Absolut9: What does this mean? Thanks in advance.Take the MSRP or Sale Price and subtract the low ball offer from it, divide that number by 2 and then add the low ball offer back in. For example, let's say the sale price of this car is $15,000 and the low ball offer that you got was $10,000.

(15,000 - 10,000) / 2 + 10,000 = $12,500

the formula above would yield a target price of $12,500. Hope that helps.LOL. Why not just (sale price + low ball offer) / 2?

Yup.. I wondered the same thing, but it's the same formula from the old used thread and in the new car thread.

People need to be aware that the "value" of the car as determined by Blue Book, Black Book, etc. is based on historic sales and is pretty meaningless at this point. The $20k car you are getting but has KBB of $25k is't really worth $25k.

That said, to add to the OPs list of factors that are creating the perfect storm in the used car market are:
Little to no financing available anymore for used cars. People can still get loans on new cars from the foreign makers because their finance companies have cash (Honda, Toyota). Even places like CapitalOne have totally removed the private-used car financing. Thus people that "need" a car are buying new because they can get a loan here and because they are getting decent deals.

Going for the luxury cars is a good idea, because many people bought them in the mid-2000s and now there is little demand.

If you have the cash - think of an offer that is ridiculously low, and then shave a few thousand more off that. Supply is huge with cars everywhere. You want to find the guy that is depserate for cash flow because he will go under at the end of the month.

I've been working over a few dealers and am getting close to $20k even for a 2005 or 2006 BMW M3 with low miles.

I actually bought back my leased Toyota Highlander SUV from the leasing company three months before the lease expire date at $2.7k lower price than contract buy back price.
Details:
Car/SUV: 2005 Toyota Highlander Ltd V6
Miles: 50k (allowed 60k)
buy back price by lease contract : $16,200
my cost: $13,500 (including 3 payments totaling $1,275 canceled)

Not a screaming hot deal, but i wanted to keep the car as i have kept it in good shape and i saved a bunch of money fixing small dings on the car before returning it 3 months later.

VanceWade said: I have gotten wholesale auction prices for the cars I'm interested in lately, and those are 8- 10K below book valueIs "wholesale auction price" comparable to Trade In Value from KBB ?

I would say very comparable for cars of average mileage. Auction prices for very low-mileage cars were significantly higher than the kbb value, while very high-mileage car auction prices are way below kbb trade-in values.

Chevy dealer here just got a call from GM today and are setting up a big meeting. I don't know what that means yet (neither does he) but he said that's never happened before in the manner this is, and he's been in business 20+ years. I expect some serious changes in the big three. I will post more when I know it. He sounded concerned...

CptSavAHo said: In Orange County there is a massive glut of low end model MB and BMW that are off-lease from all the people who thought they would retire on the 'money they were making' in real estate. A lot of them are posted on Craigslist now, even from notable dealers. TONS of '05 and '06 Audi, BMW, MB in good condition under $20k.

Hmmm... I think you are onto something here. I have been looking at my Craigslist in my metro here in the deep South and not seeing those kinds of deals on a BMW. But I pulled up Craigslist for Miami, and there are tons of these deals, like this:

http://miami.craigslist.org/mdc/ctd/950889014.html

Maybe also true for other mortgage meltdown metros. It's actually got me considering a trip down to see some cars in person and then buy.

There is only one person who knows the value of a used car and that is the person who buys it.

1. Pick a car you like
2. Use a site like cars.com to identify inventory within an acceptable radius
3. Decide what YOU want to pay for the car.
4. Call all dealers and offer price.
5a. If one accepts - travel and inspect car.
5b. If no one accepts - increase your price and start at the top of your dealer list again.

What else is there?

I would look for cars from smaller used car lots, where they get their inventory from auction. The auction prices are plumetting so these guys aren't looking to recoup the same losses as the bigger dealerships who are trying to still make a profit after paying a lot for their merchandise.

Unfortunately there aren't too many people even able to profit off the great car prices right now because everyone already has a car and selling it (if you can) will yield a much lower price anyways.

I really only see like 3 demographics benefiting. 1) People buying their first car or an additional car 2) people coming off leases 3) people who totaled cars and got hefty insurance payouts.

Recently I was in the latter group, after totaling my 2005 RSX-S with 48k miles. Insurance Co paid me $18,400 for my car and I wanted to see what the best I could do was. I tried a bunch of dealers who wouldn't budge on the price more than a thousand or two. I was in the market for an Infiniti G35 coupe, I checked Infiniti dealers, used car lots, and indie car lots. I had the greatest success with the last market, I asked the guy about where the car was from and how he got it, plus carfax etc. He had a 04 g35 w/ 30k miles, 1 previous owner from a lease and 2 years left on the powertrain warranty, heated seats, 18" wheels, high performance package - whole 9 yards - blue book was around $19,000.

I played around with the guy a bit and found out what his bottom was on the price, how low could he go with still making a profit. The guys biz was to buy these types at auction where the price was low since nobody is adding to their inventory - this is the one market where people are still buying and selling cars profitably, cars from auction.

I walked out the door with the car for $16,000 + tax/licensing in CA for like $17,500, a very very good deal. Car is in pristine mechanical shape and cosmetic shape, plenty of warranty on the powertrain, completely stock and a great price. The clowns at the dealerships were still pushing for 18 and 19k on these cars and not willing to budge because the loss would be too great for them.

Anyone looking for a good deal, I suggest this route. About a month after my purchase, I couldn't be happier. I do all my own auto work and I'm very familiar with these cars. I suggest looking on discussion boards for the car you're interested in to find out what other people are paying NOW. As mentinoed before, the blue book is useless now...but if you can nab a car with a high blue book now, you open the door for potentially selling your car for a profit in a year!

the deals are not across the board. If you want a big car you can probably steal it for cheap. If you want a hummer or an escalade you will probably pay much less than msrp. But if you buy a hummer or an escalade you might be an idiot (in my opinion).

VanceWade said: no24moryrsofbsh said: I actually bought back my leased Toyota Highlander SUV from the leasing company three months before the lease expire date at $2.7k lower price than contract buy back price.
Details:
Car/SUV: 2005 Toyota Highlander Ltd V6
Miles: 50k (allowed 60k)
buy back price by lease contract : $16,200
my cost: $13,500 (including 3 payments totaling $1,275 canceled)

Not a screaming hot deal, but i wanted to keep the car as i have kept it in good shape and i saved a bunch of money fixing small dings on the car before returning it 3 months later.

Sounds like a good deal since you know how well you kept it up. You may actually have gotten a better deal leasing and then buying this car than if you'd bought it new.

Yep it did turn out that way when i did the math afterwards. Actually i transferred someone's lease over and got an incentive to do so from the seller. So overall it all worked out in my favor

jteef1 said: I have not bought a new car before. My last car just died and I don't want to put a new engine in it.

I have been reading the thread some, but am still having questions about when to keep negotiating or stop negotiating. I put in a inquiry in the USAA car buying service and was given some "no haggle" prices by some dealers. I was looking at 2009 Ford Focus. Two of the dealers that quoted prices for 2009 actually only had 2010. They still offered what seemed to be decent prices on them.

The dealership with the 2009 actually gave me a much better deal than was quoted online. It is for a new Ford Focus SE, MSRP is $19,095, they discount it $1,685 at the dealership, and it has $4,000 worth of rebates / incentives, if I finance through Ford (at least at first).

So the price would be $13,600 (with the doc fee included). This is actually below the Kelly Blue Book trade in value listed for the car. So it seemed like a great deal. But I do see that it is pretty much in line with Edmunds TMV of $15,885(when you take in account Edmunds only lists $2,000 in rebates /incentives and I would be getting $4,000.)

One of the other dealers also said they could pretty much match that price on a similar car (different color though).

So now my friends are telling me I should negotiate a lot more - that I should be able to get another $1000 off the car. That seems like a significant amount for a new car that is already well below used car pricing for the model.

So, should I still try to get them to come down even more on the car?

Thankswhere are you located? Try checking the newspaper or online ads for the car dealers to see if they have any "loss leaders" listed and what the prices are. Do some negotiation based off of that if you can.