Tips on Buying Cars: used car, confessions of a former car salesman, professional paint

Question
Hello

      I'm going to see a used 2003 VW Anniversary edition GTI on Friday. The car has 61,000 miles and is accident free. The interior is in excellent shape but the exterior has some damage.  The paint has dozens of gravel chips on the front and quarter panels of the car along with a few scrapes on the sides of the car.  
I talked to the salesman briefly and he quickly mentioned that I could either reduce the price or have the dealership do the painjob for me. Do you think it would be pratical to negotiate a lower price along with a paintjob? The car is advertised at 14,500 which I think is too high to begin with.  Even though is an anniversary edition, its still a VW golf.  If you could give me any good tips about how to get the lowest price possible ect, that would be most appreciated.
The dealership is pretty big and they offer Mazda and VW for their main cars. The sales man is pretty experienced and older, if that helps you at all. Thanks for any info.
Nick

Answer
Thanks for the great question. Now let’s see what we can come up with for you.

Having them paint the car while reducing the price are mutually exclusive. As far as they’re concerned they would make almost twice the money on the deal by telling you the paint job cost much more than it did, and then try to get the full sticker price out of you. And you can typically get a professional paint job done (or touch up) for a lot less money than a dealer would charge you.

As far as negotiating a lower price, well generally I’m 100% against negotiating. It almost never works, and surprisingly ends up costing many people more money, which is why dealers absolutely insist on doing it. I’d devoted an entire chapter to this in my book, $ave Thousand$ Buying Your Next Car: Confessions of a Former Car Salesman, www.Make-Me-Smarter.com. Instead of negotiating here’s what you do.

1.   Go online and find the price of a typical GTI based on the mileage and all of the current options on the car. I used www.kbb.com and found that this car in EXCELLENT condition has a retail market value of $15,880.
2.   Take into consideration that the vehicle needs work; find out from a local paint/body shop how much it would take to get it into the condition you want.
3.   Also, I highly recommend you get an independent mechanic to look the vehicle over for potential problems, and prior accidents—even though you think it’s accident free! Also consider a CarFax or other service to check the title. You would be surprised what you might fiind.
4.   Estimate your costs higher than expected because it usually turns out that way, and then subtract that from the sale price. This is your starting point. Now this next part is not based on any formula, rather it’s based on what you are willing to spend to get what you want. If you figure that, after subtracting your expected costs that it’s worth $13,000 to you, make this an offer to them. Or offer them $12,000 knowing that you would be willing to come up to $12,500, for example.

Ok, I know what your thinking, that I said to not negotiate, but to a point. Most negotiating is done by the dealer setting a high price and then coming down a little at a time until the buyer agrees to a number. What you should do is, knowing what the retail market value (or invoice price of a new vehicle) is, you decide what it’s worth to you and then make them an offer. Adjusting up or down a little is just the way to come up with a mutually good deal, not a full negotiation.

Keep in mind that the dealer may tell you that they won’t take anything less than $14,500 (in this case) and you either take it or leave it. Although this rarely happens, you then have to make the decision, as I said above, if the vehicle is worth it to you or not at this price. Don’t be afraid to walk away; there are thousands of potential vehicles out there for you to consider that may be a better deal.

Finally Nick, although I know the car needs some work, I would be a bit cautious that they’re offering this car at $14,500, not far off from the EXCELLENT market price I quoted above. I have no way of knowing but it makes me think that there may be some reason for this, which makes it all the more important that you get a mechanic to look it over before making a buying decision.

Well, as you see, there’s rarely a simple and straight answer to how much you should offer for a vehicle. It’s more important that you have some idea how the process works, and what to expect from dealers.

I hope this helps you make your decision, Nick. Best of luck!

Regards,


Ron