4. Out-the-door price
written by Fred Ginsburg and “Uncle Ray”
Determine the Out-the-Door price.
When shopping for a car, you have to control the flow of the game. Dealerships have made i a science out of ways to confuse and befuddle the consumer, artfully masking the real selling price of an automobile. Here are tactics to stay ahead of their manipulative tricks.
Once you have selected the vehicle that you are interested in purchasing, the next step is to get a written quotation for the total, exact to the penny, cost to drive away in that car. You need to know the base selling price, including all dealer add-ons, options, surcharges, fees, handling, documentation fees, taxes, prep & destination, and any other bullshit that they intend to stick you with. All of those numbers should be clearly listed and broken down individually – leading to the final, out-the-door price. In other words, how much $$$ will the check be made out for.
If you can, conduct this part of the sale from the safety of your home or office. Use the internet to shop around; AI is a fast way to search multiple dealerships. Call the various dealerships, verify that the car is still in stock, and instruct (strongly) for them to send you a written out-the-door price. Many dealerships will balk and try to get you into their showroom. Be strong, and do not cave.
However, some of your OTD quotes will be generated in-person at a dealership. Although the salesperson will try to do the shell game with their four-square worksheets while physically wearing you down and dragging out the process, be firm and insist of just concentrating on obtaining the OTD price for this first phase of negotiation. If they are obstinate and uncooperative providing you with an OTD “buyers order”, then just get up and walk away. They will change their tune once they see that you are serious and ready to visit their competitor.
If the dealership has an internet sales specialist, so much the better. They know the drill, and will send you a competitive quote.
Beware of the “bait and switch”. Cars will often be listed at an attractive sales price with hidden fine print conditions, such as additional down payment, or using their inflated in-house financing, or excluding dealer add-ons, doc fees, taxes, and prep fees. Another trick is for them to claim that the “advertised” stock number has been sold, or is pending, but that they have another one just like it (at a slightly higher price, of course).
Insist that the salesperson verify that the car is in stock and available, and to send you the itemized and complete out-the-door pricing.
Do NOT discuss trade-in or financing at this time. Keep it vague; just tell them that you are undecided, and only concerned right now about OTD pricing.
After you receive your quotes, compare things like dealer doc fees, prep, destination charges, state fees. It is useful to get quotes from competing dealers within the same state, so that you can compare what each dealer claims those “external or government mandated” fees amount to. Funny how dealerships across the street from each other appear to pay the same government entity totally different numbers!
Now that you have a few quotes in front of you, it is time to start whittling down those numbers. Go on the internet and search for dealer invoice cost, which is usually just a few percentage points under MSRP.
Of course, we all know that the dealers pay less, due to special promotions and discounts from the manufacturer, but sometimes the internet searches will indicate those allowances as well.
The base selling price of the car will fall in between the invoice price and MSRP.
The ante will be the sales tax, registration, and mandated fees. Not much wiggle room, unless the dealership is playing games with the documentation fees.
The wild cards are the dealer add-ons. That is where most of the sales profit is hidden. Extended warranties, interior protection, paint protection, tire roadside hazard, nitrogen fill, dealer prep fees, and the list goes on. The majority of that stuff is totally useless or overpriced. You can readily purchase those on your own, aftermarket, at extremely reduced prices.
3M ScotchGard fabric protector and various “clear coat” automobile paint protectants are readily available for sale at a mere fraction of those dealer options.
Destination charges and dealer prep fees should be scrutinized. The price of a used vehicle is supposed to include its “preparation” fees such as cleaning, basic inspection, needed repairs, etc. New cars might have a manufacturer’s shipping or destination charge, but be wary of any localized prep fees. Ask hard questions!
If a dealer whines that an (unwanted) option came with the car and cannot be removed from the selling price, then insist that the dealer provide copies of their invoice or workorder showing their actual cost, and agree to pay only that amount for stuff that you didn’t ask for to begin with.
Sometimes a dealer add-on can be worthwhile, such as extended maintenance contracts for oil changes and scheduled service. Just remember to do the math, and make sure that it is a true savings over what an outside auto shop would charge you for the same work.
GAP insurance is always cheaper from your insurance company. Nitrogen air is bullshit; real air is already 78% nitrogen. And offroaders deflate/re-inflate everytime we head out.
Interior/exterior protection treatments rarely do anything, but if you want them, just shop for the spray cans online or at a local auto parts shop.
New cars usually come with inferior tires claiming to be offroad All Terrain. Unless the dealer specifies a recognizable brand/model of AT tire, just go with the standard rubber. Purchase a good set of heavy duty offroad tires on your own. Skip the dealer’s tire protection package, and use the replacement warranty offered by the outside tire shop.
Cross out all the unnecessary add-ons that may have been piled onto your OTD quotes, resubmit them, and ask for an amended new quote.
Make sure to get a signed, official quote from the salesperson. If they refuse to give you a written copy at the sales desk, then photograph it with your phone. Or just get up and leave… they will follow you out to the parking lot and get you your printed copy.
