Automotive Choices (The Art Of The Deal)

Having discussed my automotive choices through the years and shared the stories that went along with them, it seemed appropriate to drag my youngest son into this continuing drama as he is the one who just made the most recent trade. Let's put Jared in the hot seat for this episode as we examine our discussions together in the art of the deal.

 

Let's face it, everyone who knows me knows I like cars. Over the years I've been asked about what car someone or other should get and I've done my best, based on what I knew at the time, to suggest vehicles that meet the need. I'm willing to help in this way because it's something fun for me. Most people would rather have a root canal than purchase a car, but it's pure entertainment for me. 

The last time Jonathan was planning on buying a minivan for the family he asked me to go with him to the dealer. He had put many hours in checking what minivans were offered, what worked for him, what dealers to pursue and in what order, which exact minivans they had, and which ones were the closest to what he needed, all ranked in order of priority. Still have the spreadsheet of all that information. With him, I didn't need to discuss which vehicle he was looking for. Rather I needed to help in the purchasing stage as the dealer experience is stacked against the customer. No matter what they say to the contrary, you will never get the better of them in a transaction. They hold all the cards. You have no idea of the numbers on their side, so all you can do is be as prepared as possible. To that end, I prepared him for what was ahead, how it would all go down, and how long it would take. We did very well that day and came home with the van. Jonathan was glad that I had prepped him for all that would take place during the negotiations or he would never have lasted the entire day. You need to be prepared. It's never a good thing to go on a whim.

1989 Buick Park Avenue 3.8L V6 (165 hp)

I was the parent who spent the hours driving with the boys and teaching them the finer points of driving. I remember one time when Jared was driving and I was teaching him to look ahead in preparation for upcoming turns. I pointed up a couple blocks ahead and told him to take that left turn. No response. About a block before the turn I reminded him again. No response. With twenty feet to go I said "right here!" and he turned the wheel at 45 mph as he made sure not to miss it. With my heart in my throat, I followed that up with a better way of approaching turns and he did much better the next time. It took me a few times to figure out the way to view the dealership negotiations but I wanted the boys to be better prepared from the start.

Jared's first car was a 1989 Buick Park Avenue that came from a family in the church. It had sat unused for some time so they weren't sure about its present status, but it was running. The price was just $0 which beat the price on my Chevette. Jared insisted on paying something for it, but it was given back to him on account of his birthday. After he got his license he started driving the Buick everywhere. Everything was power in it and the seats were blue velour. GM knew how to do velour! Sometime the next spring after about seven or eight months he accidently put it in reverse as he was driving downhill, and the car was never the same. Sounds eerily like my first car and dropping it into gear with the engine racing. Except mine wasn't accidental. We tried to get some repairs done but nothing they did worked. So reluctantly he made the decision  to cut his losses, and gave it away to a friend whose dad was a mechanic who hopefully was able to fix it. At least he lost less than I did on my first car, and drove it nearly as long. There are lessons in every stage of driving.

1998 Plymouth Breeze Expresso 2.0L Inline 4 (132 hp)

  

Interior

So, what to do now? The Buick was no longer working so it was given away, which left no trade-in. My dealer friend didn't have anything lower than a couple thousand dollars or so. I drove Jared where he needed to go until we could figure out the next step. I could see now why my dad was making some of these decisions. It was the fall of the year, the time where RV-MAPS volunteer Ted Prosise came to spend a few weeks with our work project. Even though the church had been completed there were always other projects that needed to be done, plus he even came to work on my house. He had been a helpful partner in the Lincoln church. This time he had an offer for me. He said it was time to retire his faithful Breeze and get another Chrysler product to tow behind the RV. He always bought a Chrysler vehicle since he had worked at the Chrysler plant in Belvidere and was eligible for employee pricing. But because the car was older and had 175,000 miles on it they were not offering much on trade. He said it was worth more to be driven by someone and he was willing to give it away....to me. I told him I had just the person in mind who needed one and Jared finally had his second car. It was the second car that cost him nothing to buy. But, like most any used car, there would be repairs.

 

The only wrinkle in this vehicle was that it came with a 5-speed manual transmission. That would not have been an issue for me. I learned to drive a manual on a church bus, then drove the Honda and the Chevette. But Jared had just learned to drive with an automatic, so now there would be the learning curve of the clutch pedal and gearshift lever. Jared was game, and an avid shift-it-yourself driver was born. He didn't just like shifting gears, he loved it! 

 

There were new tires needed, I think we replaced the brakes, and there were other needs under the hood. Even some front suspension parts fell apart and the car needed to be towed for repair. But that was a fun car for him and made a small engine feel just a big more spritely. Whether he was heading to work or roaming through the back roads, the Breeze was more than up to the task. He drove it for five-and-a-half years and was pushing 200,000 miles when he sensed it was time to upgrade. There were some long trips he had planned and they would need a different vehicle.

2007 Ford Focus ZX3 2.0L Inline 4 (136 hp)

Dirt from local muddy field never did clean off

I hadn't been able to help choose the first two cars, as they had simply dropped into his lap. But now there was time for discussion. After a couple cars in six-and-a-half years Jared began to figure out what he wanted. And what he wanted was a lighter and smaller Plymouth Breeze. The Breeze had been a blast to drive and he wanted that experience to continue. He also knew what he didn't want, and that was an import car. Was there anything inherently wrong with them? Not particularly, but they were known for more expensive parts and repairs. Above all he just didn't want any of them. We all have our preferences. That left a paltry few domestic options, some of which were not the best. But when I mentioned the Ford Focus he said he liked that one. He did some of his own research as well, and when we talked again and I mentioned the four-door he said he wanted the two-door. Of course I asked why, and he said that it was about 100 pounds lighter so it would be marginally faster. He also wanted the 5-speed which meant this would be a more difficult find. There were also certain wheels he liked and he wanted the ZX3 version so he could get those wheels. Oh, and he liked gray. Are you kidding me? What happened to taking what they have? He said if he could wait a month that would be better.

I almost regretted offering to help him find one of these as I figured I'd have to go five states over to locate one. But one day I was on the other side of town in Lincoln and decided to make a quick stop at Jim Xamis Ford. They have a bargain section, right next to some of the better cars. I couldn't believe my eyes when I saw what looked like a gray Focus. As I stopped to look it over I saw it was the ZX3 with the right wheels, had the manual transmission, and was the two door. I couldn't believe his good fortune and called Jared right away to see if he was interested now instead of later. He decided it was too good to pass up and made plans to come down. I went in and talked with a salesperson about holding it for him. I also did some pre-negotiation and got it down to $7,000 from $9,000. I said he had a car to trade in and he thought they could give $950 for it. All that in a ten minute conversation. I was beginning to see the discounts you could get on cars with a manual transmission. Very few people wanted them.

The weekend Jared came to Lincoln from Quincy, we cleaned up the Breeze to look as good as possible. Jared liked the deal as it was, only adding an aftermarket cruise control. He drove out of there that day with his new ride, smiling all the way. This car made numerous trips to Ohio for watchmaker classes and got good fuel economy. It was a terrific little car. When he moved to Louisiana for a new job he towed it behind the U-Haul all the way. With a decent paying job now, he was ready for the next upgrade.

2014 Ford Mustang Premium 3.7L V6 (305 hp)

Jared was super-excited the day he called to say he was planning to buy a new Mustang. He had been dreaming about this for some time now, and the time had come. I only found out recently that he was waiting for a steady job before making such a leap. And here I thought it was my little speech years ago about waiting until you hit 25 years of age when insurance would drop to regular price. From 16-25 the insurance companies charge a premium on young drivers to compensate for the added accidents. When you get married before 25 (like I did) or reach 25 (like Jared did) you no longer pay for those added premiums. My brother-in-law Richard had also said that it was a good idea to find your young drivers a small car with a 4-cylinder engine so they couldn't get themselves into any serious speed trouble. I thought that was a good idea though it wasn't my efforts that got Jared his 4-cylinder small cars.

Fancy wheels, dual exhaust, sequential rear lights, rear spoiler

We started looking at Mustangs one weekend he was with us in Rockford. There was a nice red one that he liked but it was an automatic. Once again he was looking for a manual, which this time would be a six-speed. He still had to think about all he wanted. We talked on the phone several times about the exact options he wanted. First of all it needed to be the V6 Premium upgrade. That was what would get him the the leather wrapped steering wheel, hand brake, and the upgraded gauge cluster with computer.  Second, he wanted the Pony Package with all the badges, special wheels, spoiler, and floor mats with logos. Third was the electronics package which gave the larger screen for radio and climate control. Finally, it had to have the Saddle Leather seats which was a terrific color with the feel of a horse's saddle. The paint color, though important, was irrelevant. Though he loved the Ruby Red color there was the possibility he would not find one with even those other options.

Leather saddle-color interior 

    

I went to the local Rockford Ford dealer one Saturday morning to see what he might find. He put all that information on options into his computer and came up with a Mustang in Wisconsin that had all those three stipulations but was black in color. They seemed willing to deal as the price on the Mustang was surprisingly low with discounts. I told him about his trade-in and based on all the info Jared had given me they gave a decent offer. For a Mustang that stickered over $30,000 to a trade-in that was worth about $2,500 and all the taxes and fees included they said they could do it for $24,000 out the door. I made sure to get a copy of that page as it might be useful to Jared. 

The Ford Focus and the Ford Mustang together

When Jared went to his local dealer they told him they could find that exact same Mustang but in white, and it was over in Macon, Georgia. So he had a choice to make. In the end he went with the white one as it is the classic Mustang color and he would be able to work with his local dealer. They gave him a price of $27,000 out the door, at which time he pulled out the paper I had given to him regarding the other deal. They looked dazed and confused and probably felt blind-sided but these were negotiations. Many a customer feels dazed and confused and blind-sided by the dealership, but not today. They decided to match the deal but grumbled under their breath. Do you believe they were losing money? Me neither, but they were making less than they had hoped. Within a few days the car was picked up and he had his Mustang. The dealer said they were only able to see the black and white Mustangs in the system and that likely they were the only two in the entire country with the features he wanted. This was a time when getting something nobody else wanted actually worked in your favor.   

2020 Ford Ranger Lariat 2.3L Turbo (270 hp)

Why would someone trade-in a Mustang? I've talked with other friends who traded off a GTO Judge, or a Plymouth GTX, or even a Buick Grand National GNX. When they did so it was just another used car, not the expensive classic they turned out to be many years later. In this case, Jared's Mustang wasn't a Shelby GT-500 or an Anniversary Bullitt model but just a V6 Premium. While I had suggested Jared hold onto it as his fun car if he ever decided to get another car, I also realized that the $12,000-13,000 he could get in trade would lower his payment dramatically. But then again, I never thought he was serious. He talked about getting the $50,000 Bullitt Mustang, a solid V-8 destined to be an expensive classic some day. He talked about Mustang GT's with loud V-8 engines, about hot-rod V-series small Cadillacs, and about Chrysler 300's. That last one was my suggestion because you could buy a used one for $15,000 and not have to pay much after a trade-in. But nothing ever came of all those discussions. And we had a lot of them. Mom would just shake her head and say there are other things to talk about besides cars. Maybe so, but nothing is more fun than when it's someone else's money on the line.

The local dealer found this one over in Alabama

Then one day Jared calls and says he's thinking about a pickup truck, the Ford Ranger. So he's not only thinking of getting rid of the Mustang but he's replacing it with a truck? What is he thinking? Well, he's an Andreasen and he's my son, so I figure he must have a very good reason. He takes me back to the two hurricanes that devastated his town this past summer and fall of 2020. The first time he saw it coming he packed his electronics and other irreplaceables into the Mustang and headed to Atlanta to stay with us until it was safe to go back. That time his apartment received only a little water inside on the floor and the roof stayed intact. But the second hurricane was not as kind. He made it over to a friend's place in Texas with the Mustang packed with all he could get in, and thankfully all those items were safe. 

But this time his apartment had three or four feet of water that leaked through a compromised roof and all the rest of his furniture and possessions were ruined. Even the refrigerator was floating around the room on the water. So he tells me that, if he had a pickup truck, that next time (there's always a next time for the Gulf Coast) he could pack all his electronics into the cab, put boxes in the truck bed, and hook a U-Haul trailer to the back and load all his furniture into it. And maybe he wouldn't even go back. But he'd have his stuff. You've got to admit, it's rather genius and I told him as much. He also told me that the Mustang had numerous gremlins (my word) in all areas of the car and it either needed significant repairs or it needed to be replaced. After about seven years I understood completely what he meant, as I was reminded of my 2006 minivan that had its problems. This time I really thought he meant it.

It may not be saddle leather but it's not black

And then I saw that the 2020 Ford Ranger did not have an option for a manual transmission. Some of the mid-size trucks offer that as an option but not the Ranger. I was shocked when he said that the strong Mustang clutch was wearing him out in rush-hour traffic and he was ready to drive an automatic. That was an awful lot of surprises thrown my way, so I started checking out pickup trucks. I know he had said the Ranger, which was a mid-size truck, but I was under the opinion that a full-size truck would not be much more and that deleting a few options would bring it even with the Ranger. Boy was I wrong. A full-size Ford F-150 Lariat with similar options to the Ranger cost about $57,000 while the Ranger was about $37,000. 

So I started looking at the mid-size options and I concluded the Ranger indeed was the best for what he needed. If he was going to go 4-wheeling through the forest then he should look at the Toyota Tacoma, and if he just wanted to drive smoothly on the highway he should look at the Honda Ridgeline (or just get a car). He shouldn't look at the Jeep Gladiator at all as it cost $10,000 more than the Ranger and still didn't have all it offered. The Chevy, GMC, and Nissan cost more than the Ranger and did not have great powertrains. Once again he had thought about everything and was on track for what he needed.

I read all that I could on the Ranger and saw that it was an older design that Ford used in Australia, but it had been refined over the years. When Ford decided to bring it to the States, they used a completely different powertrain which was the 2.3 liter ecoboost (turbocharged) engine and the 10-speed transmission used in the monstrous F-150 Raptor. All the magazine writers say it's the best powertrain available, some saying it's the main reason to get the Ranger. With lots of power in the engine department, it would give Jared a similar feel to the Mustang and with the 10-speed transmission it would do well enough in the fuel economy department to stay close with the Mustang.

Another direction the Ranger took that interested me (for Jared of course) was that it came standard with a full suite of safety features. Ford calls it Co-Pilot 360 that looks all around the vehicle for intrusions into the space of the truck. It will tell you if you're about to hit someone ahead and will slow you down. Same for going backwards. You'll know if someone is coming up on your right or left. It will help keep you in your lane. There are about twelve different systems. Considering that my Jeep doesn't have a one of those, I was pretty impressed about Jared having pretty much all of them. Because it is the top-level trim level of the Lariat, it has power everything including power folding mirrors, leather everywhere, heated seats and mirrors, and LED lighting front and back. I was rather impressed by all that was offered on this particular pickup truck he had "built." It would be even better in person.

This time he chose just two options to go with the Lariat trim level. Like the Mustang, he wanted the technology package which gave him the bigger screen and electronics, and the adaptive cruise control feature. Of course he'd want the tow package. His friend at work said he needs to get that option if even he doesn't end up using it as it will always be worth that the next time he trades. But he's already planning ways to use it. I went over the likely prices for everything and gave him a framework for negotiation. One thing I've found is that I tend to think I can get the biggest discount on every part of the deal, when the reality is that some prices may be ordinary. No matter how much you plan, you will still be surprised by something. But at long as you've taken a thorough look at all aspects of the deal you ought to get close to your target price.

Prepared for battle, he went to the dealer and shared his truck specs. He added a red color he liked and it was $400 more, but he had missed getting his ruby red Mustang and was shooting for a similar color. They found one in Houston that met these options but added running boards, a third option. He decided to go for it. The color charge and running boards charge added another thousand dollars but he wanted that red. They went through the whole contracts and paperwork that evening, but the next day found out that they had not received updated information that the red truck was already sold. Though disappointing, he realized that color was still a secondary consideration like with the Mustang. So they found him a white one in Alabama and with the savings of the color he got the sprayed-in bed liner and was ahead of the game. In the final numbers, the sticker was just under $38,000 and he received $12,000 trade-in for his Mustang plus a $4000 discount from the dealer and a couple freebies. That put it at $22,000 plus car fees and taxes of $2,000. This total of $24,000 was the same out-the-door price that he paid for the Mustang seven years earlier, except the Ranger cost $7,500 more than the Mustang and had more options. Same deal seven years later but a much more useful package for the next phase of his life. I think I may have been more excited than him.

Having a pickup truck in the South is almost to be expected. Jared is finding out that he's now part of the club. His friend's son loved Jared's story about getting his truck that he traded his own Mustang in for the very truck Jared had test-driven. It was a much better choice than what he was first thinking. And his friend has already asked him if they can take his truck out fishing in the Spring and he's looking forward to it. Any vehicle is more than a status symbol. It ought to mean something, it ought to complement your own lifestyle, and it ought to be in your price range. Make all those things a priority as you plan your purchase and you'll come out ahead. Here's a list of things to think about:

Make a List

Put together a list of prices for all the the parts of the deal to give you an idea of the final cost.

*  Vehicle Cost--For a new car you should use the MSRP, or sticker price; for a used car it should be the asking price. This is the first price you see and you will be trying to get that price lowered.

*  Dealer Discounts--For a new car you may find discounts or rebates listed for specific cars online; for used cars ask for better pricing upfront as you can usually get $2,000 deducted right off the top.

*  Trade-In--You may have a vehicle to trade-in at the dealer. You may be able to sell it privately. A good way to determine the wholesale value is to check Edmunds or get a quote from CarMax.

*  Adjusted Price--Take the cost minus the discounts minus the trade-in for the actual selling price for the car. This is the number you'll use as the starting point for the price negotiations.

*  Down Payment--You may wish to add money to the deal in order to lower the monthly payment. On a six-year loan at 3.5% it will save you $15 per month for every $1,000 you put in the deal.

*  Taxes and Fees--There will be sales tax on the final sale amount. A large trade-in value will not only lower your payments but also the sales tax as the trade-in value is not taxed. Fees include title transfer, vehicle registration, and title work. Some dealerships add an administrative fee of $600-$800 for their employee's time, but let's just call it what it is, "Additional Dealer Markup" or profit. Most of them will not remove that fee so you will have to decide how badly you want that car, or tell them you're going elsewhere. Be sure to read the contract carefully for other cost slipped in, like window etching.

*  Monthly Payment--You will need to find the order that all these costs are put into the loan. It makes a difference on whether an item is taxed or not. Do the math and find out the monthly payment from the final total price. Be aware that dealers even mark up the cost of the loan a percent or two so do your homework on auto loans. When you are fully aware of all these costs, you will be able to determine when they change several of the prices instead of just one. Make sure all the numbers work for you.

Search the Internet

The first thing I do is look at many cars in order to narrow it down to one or two options. You don't want to lock yourself in on one car because the dealer will be less inclined to deal with you. Jared had the option of the black or white Mustang and could easily go to either one to make the deal. That's what caused his local dealer to match the other offer. Look over the inventory of cars from your local dealer on this website and try to locate more than one you'd be interested in. Do that with two dealers and let each of them know you are looking for the best deal.

I've noticed lately that some of the best discounts offered are at the end of the calendar year when they are desperate raise their sale numbers. Since they put the discounts online with the various vehicles, be sure to look at all of them to see the largest discount. I've found higher discounts on the higher cost cars which means you can get a better vehicle for the same or less than a cheaper car. The very biggest discount at my local Ford dealer was on a courtesy vehicle that had some miles on it but the discount was nearly $10,000! On a $40,000 pickup truck that is 25% off which is quite good for a truck in great demand. The discount on my Jeep was 34% because it was less desirable to enthusiasts.

Spend the Time

I usually spend a minimum of six hours at the dealership and I'm sure I don't get the price as low as I hoped because I'm just tired. Sadly, you may find a great discount advertised but you may have to negotiate that price down just as if that discount didn't exist. Time favors the dealership. Another tactic you should use is walking out of the dealership. For instance, it they take a long time "with the manager" then just leave and drive home. I always hang onto my keys for that reason. Or walk down the street and make yourself gone. Every time I have driven home because they refused to negotiate in good faith, I have received a phone call days later. Every time. And they always come up with a better price which they could have given when you were there. I usually tell them they jerked me around and I went with someone else. Doesn't change anything but it makes me feel better. Those are the dealers I won't do business with.

Extended Auto Warranties

I've only purchased two of these and that was two too many. One was my fault, one was my wife's. Consumer Reports suggests you never purchase an extended warranty. Rather, they suggest you get the most reliable car you can afford (using their service of course) and save that money to pay for repairs. In both cases of buying the extended warranty we never used a dime of the coverage. That was a lot of money that went into their pocket for no good reason. Yet I will leave the door open for those who feel that they don't want to be surprised by expenses to a vehicle that one is already paying payments for. In those cases, be sure to find a more reputable company or even the manufacturer's offerings as they may hold better to their promises. If you're going to get one anyway, then at least consider getting a longer duration that will be around when you are more likely to need it.

Worthwhile Extras

There are a few things I will buy from the dealer that are worth it. I always get a bottle of touch-up paint. They cost about $30 now because of environmental concerns, but it's a good idea to have it on hand when you see chips or scratches. You don't want it to turn into rust. Another helpful item is factory mud flaps front and rear. These are contoured to your specific vehicle and keep mud and rocks from damaging the paint behind the wheels. Finally, you might check and see if your dealer offers maintenance packages for oil changes. For the Jeep I purchased twelve synthetic oil changes over six years, or two per year, from the dealer. Maybe you already have a source for oil changes and that's fine. But around here a synthetic oil change will set you back $75. With the package they cost about $30. All I need to do is show up at the dealer and they will change the oil, deducting one oil change from the count. No coupons, no keeping track. The dealer does it all. Jared got his spray-on bedliner from the dealer and gave him a discounted price of $350 instead of the $500 from the factory.

                       _____________________________________________________________

Updated: Just throw it all out the window! (August 2022)

When COVID rudely upended everyone's life, there was originally a hope that life would one day return to normal. Sadly that day many never come. We have seen life change in ways we never expected and it seems like those surprises keep coming. In the automotive world, these changes have been epic. Prices of new and used cars have risen much faster in the past couple years. New cars have seen $5,000 to $10,000 surcharges added to average cars while low volume models might have $50,000 added to the sticker price! (See Corvette below). Because various electronic chips were in short supply, manufacturers put the ones they could get into the higher end cars so you were stuck considering an expensive car instead of entry level. Since new cars were so expensive people started buying used cars which drove up prices of those with even high mileage up to the level of new car pricing. For those who were trying to replace a car they had bought five years earlier for $5,000 they soon discovered they would have to pay $20,000 or more for the "privilege!" Meanwhile, as cars fell apart or were involved in accidents, their owners often had to use Uber or Lyft to get around. I heard many of these stories as I drove people like this around.

This special edition Corvette had a surcharge of $50,000!

Dealers soon discovered that they had a prime monopoly going with their vehicles. Most dealerships turned into a used car lot with a handful of new cars out on the front row. With few vehicles available they stopped offering incentives. They stopped haggling for hours with customers who wanted to get a lower price. The price they gave you was the price you had to pay if you wanted it. Soon it was evident that paying MSRP for a vehicle was a "good deal" since so many dealerships had added so much more. If there was a silver lining it was that they would take your used car--running or not--in trade and give you more money that you imagined. They would be able to fix up that older car and sell it as a third-tier offering for those unable to pay new or better-used car prices. This is the very reason I had to stop driving for Lyft. Just a few years back I would have been able to buy a five year old Hyundai Elantra with 75,000 miles for maybe $4,000 or $5,000. Now it would cost $15,000 to $20,000! That 2013 Elantra GT we purchased new only cost $20,000 at the time so it becomes difficult to imagine spending new car money for an old car.

Look around the new car lots and you will find a smattering of vehicles available. However, you will likely not find the one you were looking for. The color you want is likely unavailable, and they options you want are nowhere to be found. When you do find cars on the lot you may be told that they are all pre-sold and are just waiting for their owners to come and pick them up. Many are getting the closest thing to what they wanted at a price far above they wanted to pay. If you want a hybrid or an electric vehicle, both of which are in higher demand, you might have to wait two or three years to get one. Good luck trying to find a Tesla that is available for sale. All the rules I shared earlier have pretty much flown right out the window.

The best advice I can give you is something I have followed for years, and that is to buy what no one else wants. I bought minivans for nearly thirty years and got great deals because nobody wanted a minivan. Jonathan was able to buy the Bolt electric car because everyone was after the Teslas and higher priced EV's. The Bolt happens to be a very capable and well-made car but it just isn't that popular now. Jared got his deal because the Ranger was new to the auto scene and everyone was looking for the full-size trucks. Do your homework and try to find the vehicle that is most reasonably priced and you just might be able to make that deal.

Arktander

(aka David Andreasen)