New Two, with thoughts on negotiating

I purchased a new Prius last week. Since I think I got a pretty good price, I thought I'd share my experience and some thoughts.

Several weeks ago my wife and I test drove several cars. We told each dealership, "We're not buying today, just driving. If we decide on this car, we'll contact you to talk price and inventory." We drove a Prius hatchback, Prius V, Camry, Camry Hybrid, Optima, Altima, and Accord. Then we drove the Prius hatchback, Altima, and Accord again, I rented a Prius on a business trip, and my wife took a Prius and an Accord for several hours each on "extended test drives".

We chose the Prius hatchback for yearly gas and (expected) maintenance savings. The Accord is quieter, smoother, more powerful, roomier, and better handling, and about the same price. But the Prius is quiet enough, smooth enough, powerful enough (barely), roomy enough, and handles well enough. Besides expected savings of about $800/year on gas, we also chose the Prius because the Accord has just been released, and first year models often have more reliability issues, while the Prius has shown excellent reliability.

Two weeks ago I used the USAA auto buying service (I think it's the same as Zag and TrueCar) to get quotes in Alabama and Atlanta. An Atlanta dealership was about $1,000 lower than ones near Birmingham, at $3,745 under MSRP, plus doc fee. The USAA "savings certificate" says that the dealer will give me any similar car in stock for that discount, but when I contacted the dealership they didn't have any vehicles with only carpeted mats. They all had the $700 Toyoguard package, which I think is just dealer profit.

Last week I submitted about 30 inquiries to dealerships in and around Alabama for a "2012 Prius hatchback Two, blizzard pearl/beige interior, only carpeted mats". I asked for them to give me their best price including everything but tax and title so that I could easily compare in-state and out-of-state quotes. I mentioned that I had an offer for $3,745 under MSRP, but that dealer hadn't yet found a car with only mats. I did *not* include my phone number in the inquiry, and when dealers later asked for it (or insisted), I politely declined.

One of the early repliers gave me a very good price ($22,900 plus tax and title) and offered to beat any deal by $100. After two days of negotiating with about 20 dealerships (about 8 of which were serious) and hundreds of e-mails, I went with them after they had price-matched twice. Several dealers were converging near the same price ($21,898 plus tax and title), and were getting testy, so it seemed like I was at or near rock bottom.

A few dealers (including the winner) offered free delivery of the vehicle to my home. This surprised me, since it was over a two hour drive for them, but it was a great benefit since I wasn't trading in anything. I guess this comes out of dealership overhead rather than the individual car price.

Somewhere along the process I told each dealership that I was paying cash. This caused one dealership to withdraw their offer, because the were counting on making money on the financing. I never discussed dealer incentives, invoice price, or other details. I wanted to keep it simple and just get their best price (including everything but tax and title).

I had a couple of issues to work through with the winning dealership at the last minute, but both turned out okay. They had said that I could pay with a credit card, but then backed out at the last minute. I ended up having a stressful, almost combative phone conversation with the general manager. Summarized:

GM: We're losing money on this. You can't pay with a credit card.
Me: You should have thought of that yesterday. I accepted your deal and shut down the other dealerships.
GM: Sorry, you have to pay cash. The credit card company would charge us $600 of fees.
Me: Okay, I'll help you out. Just give me $200 off to make up for what the credit card was going to give me.
GM: No, we can't do that. You have to pay the full amount in cash.
Me: So it's not worth $200 to you to maintain your dealership's integrity and honor the deal you offered?
GM: We are honoring it. You can pay with a credit card, but you'll have to pay $600 more for the credit card fees.
Me: That's not the deal you offered yesterday. If you're backing out, I'm going to get my $500 deposit back, leave bad reviews for your dealership, and buy from someone else.
GM: You can do that if you want. I'll meet you halfway and give you $100 off.
Me: Make it $100 off and a free all-weather cargo met.
GM: Done.

That got it to $21,798. Apparently he had a lot more wiggle room in adding free accessories than in lowering the price. Maybe I should have asked for a cargo net, too.

The next morning after the car was on the way to my house, I called the finance guy and asked for the out-the-door total including tax and title so that I could get a cashier's check. He gave me a price that sounded about right, but out of an abundance of caution, I asked him to break it down.

FG: That's $21,978 plus Alabama tax of...
Me: I hope you just mis-spoke. It's supposed to be $21,798.
FG: Yeah, that's right. Plus $435.96 Alabama tax, plus $399 doc fee, plus...
Me: Whoa, whoa whoa! Doc fee is already included.
FG: No, it never is.

After a minute of Yes/No/Yes/No, he said he'd check and get back to me. I started frantically going through the e-mail chain for proof, but after a couple minutes he called back and said, "My mistake. Just knock $400 off that total." Whew! I asked him to send that in an e-mail, and tried to shut off the fight-or-flight adrenaline rush.

Then a few minutes later I remembered the $500 deposit for them to get the car from another dealership. I had given them my credit card number the previous day for that. Oh, no! We didn't subtract that out. Maybe he just knocked off $400 because they already have $500 of my money!

I called back, and he assured me that the $500 wasn't really a deposit and would only have been charged if I had backed out of the deal. I got that in writing, too.

Two nice old guys delivered the next afternoon with a stack of papers to sign. They pointed out that the external radio antenna was missing and said that the dealership was overnighting that to me. So I wrote that in on the papers that I signed.

We're enjoying the car (except my teenage daughter who wanted a big 'ole truck), and I expect the antenna and cargo mat to arrive this week.


Luke

 

bisco: It's a 2012. When I checked prices a couple weeks ago, the 2013's were much higher, so I didn't see any reason to inquire further about them.

Tamara: I chose ones that I was willing to drive to. Free delivery was a pleasant surprise.

 

djsaugatuck,

Thanks for you input. I did try several times to get the local dealers to match, but none would come within $1,000 of my purchase price. And "local" for me is 45 minutes away, so the benefits you mentioned are reduced in my case.

I could have gotten a "limited lifetime powertrain warranty" that did not require service at the selling dealership. But they pulled that from the last and lowest quote, and I decided not to get it. (See my $180-for-a-warranty thread.) My local dealerships didn't offer that anyway.

Good point about not being able to inspect the vehicle. I'm getting the "triple lights effect" through the front windshield. If I had bought locally, and if I had thought to inspect it at night, I might have refused the car. I need to sit in some other Prius at night to see if they're the same.

I had thought about e-mailing just the locals and a few from Atlanta, but I'm glad that I broadened my search. The two finalists were smaller town dealers, and the Atlanta dealer that was next seemed a bit shady.


Luke