Cars are never an investment, but do you think you have ever gotten a deal on a vehicle?

I felt like I got good value out of a Honda my wife drove a few years ago. When we sold it, we got a couple thousand above what I had anticipated.

But other than that, I do not feel I have ever gotten much of a deal. It is amazing to me how GMC and Ford can lose so much money given the profit margins on cars.

The profit margin depends on the car. For the average Ford, Chevy.... the profit margin isn't that much, 3% maybe, from my understanding. It's the high end vehicles that get the high profits. The problem is, is that we pay over $1500 per car, again depending on the car, for the auto worker's benefits. The union has basically priced their product out of the market and the quality is below that of most foreign cars. I must admit though that living in the Detroit area, I have 2 Mercury's in my driveway and have had good luck with both.

Good point. I remember seeing something about how GM pays out millions of dollars each month to pensioners.

I feel like I've gotten some good deals on cars. I bought my first car in 1998 (a 1994 Audi 90). Paid $13,300 for it. I wrecked it a year later and State Farm paid me $19,000. I bought another 1994 Audi 90 with less miles and paid $15,500 for it.

I bought my first new car in 2002, I paid 3% above cost for my 2002 Audi A4 ($29,000). Still have that and it runs great. I plan on keeping it at least 6 more years.

My wife is still rocking her 1990 Pontiac 6000 that was her first car. She pays about $400 a year in maintenance on it and she gets about $1000 a year in mileage reimbursement on it for work. Nothing but profit from that one. Even though I hate to get rid of it, it's one hell of an eyesore we've been thinking of selling it and buying a Mini. I'd buy that car used, but browsing the car ads these people think they can get new prices for their used Mini.

We bought both our Nissans (2002 Altima & 2004 Quest) at dealer invoice.

I know you can do better than that, but I think the dealer is entitled to make some money on the sale, and in both cases, the Assistant Sales Mgr said, "when you're ready to buy, I'll sell you the car at invoice."

No muss, no fuss, in addition I got $150 more than expected on the car I traded-in for the Altima and $500 more on the car I traded-in for the Quest than I expected.

So to me that was a good deal. When I'm ready for a new car, the first place I'll go to buy will be the same dealer.

I nearly always buy at the end of the year. On my last three cars, after incentives, I paid below invoice and got 0% financing. That helps offset new-car depreciation and ensures I get a few bucks more than I owe when I trade it in.

You just have to have nerves of steel to play the waiting game and hope the car you were eyeing up in October will still be languishing on the dealer's lot in December.

No, because the dealers have so much "smoke and mirrors" to use you are never sure if you paid too much.

For all of you that work in auto dealerships, I'm sorry if you are offended by my next sentence. I have always gone to trade or purchase automobiles with the feeling that I am going to be fleeced, despite my best efforts to protect my money.

quote:

Originally posted by badburn:
No, because the dealers have so much "smoke and mirrors" to use you are never sure if you paid too much.

I've been buying Volkswagens for years from the same guy because it's a small, family-owned dealership with no smoke and mirrors. I walk in and pick a car, that's about it.

They're happy to show me the invoice price. On the first two cars I bought from them, it was summer, so we stuck a deal right between the invoice and sticker in about two seconds. The next two cars were below invoice because it was the very end of the model and calandar years. No talk about undercoating or extended warranties ever happened. In fact, they know me so well now, they don't even look at my trade -- they trust that it's in good shape.

Of course, if you have no choice but to shop at one of those huge auto malls, may God be with you. And enjoy your pinstripe, sealant, undercoating, Scotchgard, 10-year extended warranty, and gold plated hood ornament.

yup, got my jeep for free. But then again its got about 300000 miles on it and is falling apart-literally.

"Invoice price" is not what the dealership pays, FYI.

quote:

Originally posted by Coriolanus:
"Invoice price" is not what the dealership pays, FYI.

It's not only not what they pay, but it's also exclsuive of incentives offered by the manufacturer directly to the dealer. But regardless, the profit margin is pretty slim on new cars these days, which is why so many dealers rely on volume sales (and their real profit center, service) to make ends meet. Invoice price is a pretty good baseline for negotiaitons. If you're buying a butt-ugly POS like the Pontiac Aztek, then you should shoot for a couple grand below invoice...if you're going for a hot seller like the Toyota Prius, a thou over invoice would be a score, etc.

I, for one, always think it is interesting about the public's opinions of car dealerships. I worked my way through college as a car salesman and learned that in general, the public's perception is WAY off. Granted, there are a few slimey salesmen that try to screw everyone, but for the most part, they are decent folks. I also learned that generally speaking, the average customer lies WAY more than the salesman - about credit, what their intentions truly are, what they want financially and to buy, the condition of their vehicle, etc.

The thing is that most horror stories stem from the fact that people fail to realize that a dealership has no idea about the true condition of most used vehicles because they were either trade-ins or bought at the auction, which means that there is very little history. However, when a customer comes and buys a car that has issues that the previous owner covered up to trade in, they automatically think that the dealer intentionally tried to sell them junk. The dealer has invested a certain amount of money in the vehicle based on the same assumptions as the new owner, so why is the dealer responsible?

Also, people seem to think that there is a huge profit margin on new vehicles, but that simply isn't true. 4% difference between invoice and sticker is a fairly high margin in today's industry. There are things like holdback and stuff, but that is to pay the dealer for advertising, overhead, floorplans, etc. The bottom line is that it doesn't matter if you pay invoice, below invoice or $5k above invoice if you are trading in a vehicle, the dealer will make up the difference there. Also, why shouldn't a dealer make money? Thats why they are in business, and while the dealer may receive all these "hidden" profits, the salesmen's commission is based off the invoice profit after the actual cash value of the trade-in is determined. So if you buy at invoice, your salesman just gets a "mini-deal" which is the minimum commission paid by the dealership. I know that for my time dealing with customers, the effort involved in selling a car isn't worth a mini-deal - I'd send them to another dealership.

Anyways, to reel in my post to the original intent of this thread, yes, as cars go, I have gotten some good deals. There isn't a car that is a good investment in the big picture, but all things considered, you can buy a good used import fairly cheap, drive it for 5-6 years with minimal maintenance costs, and trade it in later for something else. My goal is usually to buy something I can pay cash for and drive it until the wheels rot off! Thats the only way you can make a car a "good deal".

I would never use the terms "investment" and "car" in the same sentence.

Do your homework on the internet...depending upon what type of car you are interested in, there are sites devoted to specific brands with message boards that contain purchase information. They frequently discuss current rates, latest deals, etc. Many foreign manufacturers--specifically, European brands--offer European Delivery programs that can save you thousands. Like anything else, the more information you have = the more negotiating power you have.

quote:

Originally posted by Coriolanus:
I would never use the terms "investment" and "car" in the same sentence.

quote:

Originally posted by Coriolanus:
Cars are never an investment, but do you think you have ever gotten a deal on a vehicle?

But you DID!

Ha ha, well done!