
Roadster to new-car buyers: Skip the dealer, we’ll haggle for you - sgustard
http://www.sfgate.com/business/article/Roadster-to-new-car-buyers-Skip-the-dealer-6287758.php
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raesene4
For me, the business model of this kind of service is important. Where a
commission is paid by the dealer to the service, it would seem to me that
there's a potential for a conflict of interest as the service gets more money,
based on how much the dealer charges for the car. In that kind of setup is
there really a good incentive for the service to haggle hard on the customers
behalf...?

I'd prefer a payment model based on either a flat fee paid by the customer, or
perhaps something based on the amount saved from the list value of the car.

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BetaCygni
They get "up to 1.25%" commission from the dealers, no thanks. If I hire
someone for advice I want that person to be paid only by me and by people like
me.

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joosters
It's an odd pricing scheme. So my potential negotiator gets paid more if they
negotiate a higher price? Don't we want the motivation to work the other way
around?

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analog31
It does seem odd. But it seems like there are at least a couple sources of
discipline. The first is that you could call two brokers and take the one with
the best offer, or use other kinds of pricing services for comparison. The
other is that you could still negotiate directly with the dealer yourself.

Also, while they're paid by the dealers, the dealers are still competing with
one another for the chance to pay this commission.

Hopefully this is just a small step towards buying cars directly from the
manufacturer.

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lsc
> It does seem odd. But it seems like there are at least a couple sources of
> discipline. The first is that you could call two brokers and take the one
> with the best offer, or use other kinds of pricing services for comparison.
> The other is that you could still negotiate directly with the dealer
> yourself.

Yes, of course, that's what I do now. but then what value does this broker
service provide?

That's the problem with most brokers. Negotiation is unpleasant. I am
fundamentally willing to pay money to get the benefits of negotiation without
dealing with this unpleasantness.

The problem is that in most areas where negotiation really matters, all the
middlemen who have the information required to negotiate well for me all have
more important relationships with my counterparties than with me. A big
example is body shops;

I mean, I spend probably about half my time contracted out through a body shop
of one sort or another, The thing is, at the same job, negotiation quite often
can mean a 30% difference in pay for me. And I'm bad at negotiation, so it
would maybe make sense to outsource that.

The problem is that the companies that normally handle that, the body shops,
have strong relationships that _matter_ with the companies that actually foot
the bill. Their relationships with contractors like me matter a lot less, so
they are my counterparty in the negotiation.

Writers and actors have agents to handle that sort of thing; but the important
bit there is that agents are paid by the person they are representing, and
paid more the more the person they are representing gets.

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analog31
Points well taken. Thanks.

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RudiThun
Hi, I’m the COO of Roadster. Thought it would be worth sharing a little more
on our business model - and the cost structure of dealers. It’s rare that we
don’t get a better deal for consumers than they can negotiate themselves. Why?

First, we work directly with the GM or fleet managers at dealers who are
focused on volume sales, instead of a commissioned salesperson at the dealer.
The 1.25% fee we charge dealers is actually cost neutral (or better) for the
dealer as they otherwise pay their own sales people 25% - 30% of the profit on
any deal in commissions. By the time we engage the dealer, we have a customer
ready to buy and it’s a super efficient transaction.

Second, we negotiate to get our customers the best outcome across the whole
deal, not just the upfront price. If you don’t focus on the other parts
(trade-in, finance/lease terms, rebates/incentives, avoiding extra options you
don’t want, etc.), you will likely have a less-than-ideal outcome. We work
with customers every day where people thought they had a great price from a
dealer, but we end up saving a bunch on their monthly payment.

Finally, we offer our customers transparency (we share every aspect of the
deal before you make any commitment) and time savings (how much is your
weekend worth?).

Happy to answer any questions about our service.

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petersouth
I recently started a similar service and quickly got out of it. Even though I
was offering to negotiate deals for free there was lackluster interest. Buying
a car from a dealership is painful it seems people still want to do it for the
experience, or think they can do better themselves (paying a higher price in
the process). I would like to know if these people are licensed brokers or how
they will handle that in states that require it. Truecar has a decent system
in place (although there are problems too) and I think it's hard to beat the
out especially taking fees from both sides with a significant portion on the
buyer.

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dennisnedry
I was not aware that TrueCar was a buying service. I'm looking for a new
vehicle myself and just checked them out. Thanks for the tip!

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atwebb
A lot of places offer buying services as well, USAA offers one through
Truecar, there's also Carvana as well. Truecar was close to what we paid
though a little higher. It was a good jumping off point when comparing real
life to MSRP/listing prices. If you haven't bought before, focus on the out
the door price.

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lsiunsuex
I despise the experience of buying a car so much that I've just given up
haggling and pay the price of the car. In my last 2 purchases, I've found not
haggling causes them to take about a grand off the top (without me asking for
it) which is good enough for me. This was both on a pretty reasonable Hyundai
Elantra for the wife and my more expensive Acura RDX - point being - doesn't
matter if it's a cheaper car or more luxury - if they have wiggle room,
they'll do it anyways

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briHass
I used TrueCar (and other similar services) as a starting point, but was able
to negotiate a better price in person (~6% lower) than what TC quoted (what
they considered an 'excellent' price.) I actually didn't find the process to
be painful at all. My salesman was friendly, willing to work with me, and gave
pretty close to the final price right out of the gate.

You're never going to do better with car-buying services than just
communicating with the dealers, especially their fleet or online managers.
That said, one should figure out what they value their time at, and realize
that they can easily spend hours/days trying to haggle that last $500 when it
doesn't make sense from a time investment standpoint.

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bane
I recently bought two cars, here's the relatively pain-free process I went
through.

0) Wait until the model years are flipping on the car you want, they need to
get last model year inventory off the lot

1) Used Costco to get a prenegotiated price. There's some other things
attached with it, but walking in with a price below MSRP opens up the
negotiations.

2) Used a couple other sites (e.g. [1]) to get price quotes on the
make/model/trim/configuration I wanted. A deluge of emails and phone calls
occur within a day or two after this.

3) Simply tell each responding dealership that you are soliciting offers from
all the local dealerships and to email you with their best price.

4) Pick a dealer, not the one with the lowest price, but it doesn't matter
which one really (but some will try to differentiate with special warranties
or other things), open with the Costco price, then follow with the lowest
quote you received. Say "beat this and I'll buy my car here, otherwise I'm
going to these guys". And don't budge.

5) They'll always come back with a lower price, maybe not by much, but it'll
be lower. Be willing to leave if they don't. Congratulations you've just
negotiated a low price for your new car. Watch the price buildup for
unnecessary fees and fight them on those (or have them throw in overpriced
things like floor mats or cargo nets or whatever in exchange).

6) Once you get to finance, don't necessarily accept their rates, the
dealership finance people _can_ solicit financing on your behalf from other
banks. Simply have evidence that somebody can offer you a loan cheaper than
the dealership can offer (Credit Unions are great for this), and haggle a
little with them, they'll eventually use their network to do all the legwork
for you and it can save you quite a bit of money.

Bonus round:

1) Take your old car to Carmax and get a quote from them to buy your car.

2) During trade-in talks at the dealership see if they'll meet or exceed
Carmax's quote.

3) If they don't, you have a guaranteed buyer (Carmax) at a good price. If
they do, you get to unload your car hassle free.

4) Take car to Carmax and sell it, or try to get more on the private market.
Carmax takes about 30 minutes and the people are pleasant.

It took about a day in each case to buy (and sell) each car, but I managed to
save between $3-5k below the retail price in each case, then made above the
KBB estimates on my old cars. There wasn't any emotion involved, nothing got
heated and the negotiation portion of the process took about 20 minutes at the
dealer, most of it was the salesperson waiting for their manager to approve a
price reduction. I'd describe the experience both times at two different
dealerships as "pleasant", and because we had the negotiations locked up,
spent most of the time making polite conversation with the salesperson.

1 - [http://usnews.rankingsandreviews.com/cars-trucks/best-
price-...](http://usnews.rankingsandreviews.com/cars-trucks/best-price-
program/)

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mhb
I liked CarWoo, but it is no more.

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GFK_of_xmaspast
Don't lots of credit unions already offer this kind of service.

