$19985:  2008 Honda Fit with 3200 miles (about $4000 over MSRP)
$18995:  2007 Toyota Yaris with 12000 miles (about $3000 over MSRP)
$17995:  2007 Honda Fit with 8000 miles (about $2000 over MSRP)

I’m seriously thinking of selling mine for a $2k markup and buying something at auction for $2k cash.  I only drive 14 miles to work — soon to be 5 — so the prospect of puttering around in a ’98 Intrepid isn’t exactly awful.  Especially when it frees up a few hundred bucks to put into killing those student loans a few years early.

According the the aggregation of KBB, Edmunds, and NADA, my car is worth about $15900 in private sale.  And that’s using the 2007 model, because neither Edmunds nor NADA have figures for 2008 on my car yet.  That’s also not taking market demand into account.  Interesting.

A friend of mine is going car shopping right now.  She did in fact read my posts on the subject, and said she felt prepared – aww, I feel all warm and fuzzy on the inside now.  One of the cars she was considering was a Dodge.  It just so happens that she was considering it because of Dodge’s “$2.99 Gas Guarantee”.  You know the one – this is where they sell you fuel at $2.99 / gallon for the next three years, up to 12,000 miles per year.

A simple check of the math demonstrated that this wasn’t a very good deal.  Let’s assume that gas is $4.50 / gallon, averaged over the next three years.  If the Dodge vehicle in question gets 25 mpg:

12,000 miles / 25 mpg = 480 gallons per year that qualify for the $2.99 rate
$2.99 times 480 = $1435.20
$5 times 480 = $2160
$2160 – $1435.20 = $724.80
$724.80 times three years = $2174.40 actual savings

In reality, that figure will be slightly different.  Gas is likely to go up, but then again, it’s $3.75 / gal right now, and will probably sink a little lower as we approach November.

So in other words, that’s similar to (but not quite as good as) getting a $2174.80 discount off the price of the car.  Considering that other, more fuel-efficient builders like Honda, Toyota, VW, and even Hyundai / Kia are all offering hefty multi-thousand-dollar rebates right now, the Dodge offer isn’t a very good competitive deal.  Of course, if you happen to like the Dodge for other reasons and already have your mind set, then it’s icing on the cake.

As I was typing this up, I realized that I forgot to put up my final part in the car buying series.  I’ll whip something together over the next few days.  I know that more than one car dealership is reading this blog, and if any sales reps have any advice that they’d like to submit (anonymously, of course), drop me a line.

In the beginning, I said this series wouldn’t be about the cars themselves, so I’ll make this quick.  Both the Civic and the Fit get outstanding gas mileage, around 35 on the highway by the revised EPA standards (which is around 38 – 40mpg on the old standards).  The Fit’s strong point is cargo space, while the Civic’s strong point is style.  Of course, the Civic has a huge trunk, and the Fit isn’t exactly ugly.  In the end, the same unorthodox taste that chose the Element that fateful day back in February 2004 wound up choosing the Fit Sport.  And after spending most of today driving all over the region, I’m certain I made the right choice.

In the end, the basic concept of “let’s not be obnoxious jerks to our customers” won out over price.  Don’t get me wrong; lower cost is always a good thing.  But it’s not the only thing (otherwise, we’d all be driving Hyundai Accents).  Ciocca Honda lost my business because of the way their business manager conducted himself.  Faulkner Honda won my business because of the way their entire staff treated me.  The other dealerships fell somewhere in-between because they simply didn’t care.

This adventure of mine has actually been rather enjoyable.  In another day or two I’ll conclude this series by sharing some of the basic techniques I used to keep the numbers in my favor.  Hopefully my exploits will help at least a few of you make it through your next car purchase with a little less pain.

Ciocca Honda (pronounced see-YOKE-uh) is a fairly new dealership at the corner of Route 22 and Route 39.  Last week, I stopped in to negotiate a price for both vehicles.  My sales rep was friendly and knowledgeable, and the sales process proceeded more or less exactly the same as it did at the other dealerships.  It’s always been my experience that Honda dealerships are a little cleaner, a little nicer-looking, and a lot more customer-friendly than most other dealerships.  For the most part, Ciocca Honda fit right in.

For the most part.

As was par for the course at every other dealership, we went back and forth on price for a while, and ultimately, Ciocca beat Faulkner by a noteworthy amount.  I gave them my finance application, signed on the dotted line, and set up delivery for Saturday.  But when Saturday actually rolled around, Ciocca Honda pissed me off faster than any pushy sales rep at Discount Donny’s Used Car-O-Rama could ever dream of doing.

Up through this past Saturday, Honda was running a special 2.9% finance offer on the Civic.  This was my “x factor” that allowed me to justify bumping up to the slightly more expensive Civic over the Fit Sport.  And while my FICO score isn’t 850, my credit is good enough to get me into the top one or two tiers.  I stood an excellent chance of getting approved at 2.9% – 3.9% and was prepared to pay as high as 4.0%.  But when their business manager took me into the office to sign the paperwork, he informed me that my loan was approved at a whopping 7.99% — almost double my maximum limit.  I would later find out (not from Ciocca, of course) that this was wildly inaccurate, and that I had, in fact, been approved at 3.9% — more on this tomorrow.

My first thought was that this was some high-pressure sales tactic, and/or that Ciocca Honda was trying to recoup some profit on the deal by jacking up my interest rate.  I played along — for the moment — and asked what my monthly payment would be.  “I’ll get to that in just a second,” said the business manager.  “First I want to talk about this Honda Care package we’re currently offering that gives you piece of mind in the event that…”

“First I want to talk about my monthly payment,” I interrupted.  If they were going to be rude to me by jacking up my interest rate and dodging my questions, I was going to be rude right back.

“Now hold on a minute,” he said.  “Just relax.  I’m going to get to that in a minute.”

“No, let’s get to the payment first.”

“Well now just relax,” he repeated.  “Just take a deep breath, slow down, and relax.  We’ll talk all about that, but first you really need to hear about this great protection we’re offering you, because…”

“Tell you what,” I interrupted again.  “I don’t have time for this, and I don’t care to be treated this way.  You can either give me a payment amount right now, or you can put the tags back on my Element.”  He grudgingly relented and told me that with the extended warranty, my payment would be around $380 a month for 60 months.

I got up to leave.  He all but begged me to wait just a little bit longer, and disappeared to call American Honda Finance.  I waited patiently up to and including the ten-minute mark, at which point I started to walk out of the dealership.  Both my sales rep and the sales manager, who had also been very helpful, came running over to see what had gone wrong.  The sales manager asked me to just hold on for one more minute, as the business manager was “on the phone with Honda Finance”.

So I waited some more.  Out came the business manager, who informed me that the 7.99% rate couldn’t possibly go any lower.  I pointed out that since they’d had my finance application for several days now, they had more than enough time to discover what rate I’d been scored at.  I told them in no uncertain terms that I thought it was extremely shady and unethical that they coincidentally threw this outrageous rate at me on — surprise — the last day of the offer.  I told them that I didn’t appreciate having to ask three times (and threaten to walk out) for my payment amount.  And I told them that I didn’t appreciate their business manager “sneaking the extended warranty into the payment” (to which the business manager actually replied, “Sir, I do that for ALL of our customers here”).

Naturally, I left.

Yesterday (Monday), I went to Faulkner and discovered that I had, in fact, been approved in the second-best credit tier for that promo offer.  Honda Finance had, in fact, approved me for 3.9% financing on the Civic.  So why did Ciocca Honda quote me a rate that was 4.09% higher than what I was approved for?

That’s an excellent question.

Faulkner Toyota (across Paxton from the Harrisburg Mall) was my first stop.  My first impression was not good.  The showroom was cramped and disorganized, and just seemed dirty.  But since they’re rebuilding their dealership on-site, I tried not to think about it.  My sales rep, without asking any questions about what I wanted or what I was looking to pay, immediately showed me to a Toyota Matrix — a $21,000 baby-blue automatic.  After I told him that this was pretty much the exact opposite of what I wanted (hatchback aside), he actually seemed a bit miffed.

I had no sympathy.  The cardinal rule of sales is that you ALWAYS ask the customer what they want.  Not only does it help the sales rep frame the product in terms of the customer’s desires, but it also helps prevent wasting ten minutes explaining a car that the customer doesn’t want.

He disappeared for about ten minutes to find a 5-speed xD.  He brought it around and I took it out for an uneventful test drive.  When we got back, I said I was interested in hearing what they could give me for trade-in on my Element.  I pointed out that I had already spoken to several other dealerships and was gathering prices for a purchase this coming weekend.  His response was classic faux outrage:

“Well if you’re just going to go from dealer to dealer, we’ll just call Harrisburg Toyota and see what offer they made.”

I told him that if they wanted to do that, I could save him the phone call and walk out right now, because their offer was unacceptable.  “Well, okay…” he replied, and walked off to presumably “run it by the boss”.  When he returned 5-10 minutes later, he had a ridiculous offer of $6200.  “Are you kidding me?” I asked.  For the record, my car is worth about $9000 in trade, about $8500 – $9500 at auction, and about $13000 retail.  Those are figures from KBB, NADA, Edmunds, Manheim’s auction reports, and Autotrader.

“That’s what your car is worth,” he said.  “Not according to NADA, KBB, Edmunds, or your competitors,” I replied.  “You’re not just a few hundred off; you’re a few thousand off”.

He shrugged and said “Okay.”  I got up and walked out.  Whatever bonus points Faulkner had accrued over the years had vanished in the scope of 24 hours.  How Faulkner Honda can be such an extreme difference between Faulkner Toyota and Faulkner Nissan escapes me, but the chain no longer has a nice ring to it in my ears.  Still, Faulkner Honda *did* make a pretty good offer, so they weren’t out of the running.

This post is getting pretty long – Ciocca Honda will follow tomorrow.  At this point, the Scion has been knocked out of the game.  Maybe there are better Toyota / Scion dealers out there, but if I’ve had weak experiences at two out of two, that doesn’t bode well for the company.  Now it’s down to Honda Civic vs Honda Fit; Honda dealer vs Honda dealer.

Faulkner Nissan’s new location is near the Harrisburg Mall, just past Sheetz. Right off the bat, I could tell that my sales rep really didn’t want to be there. He didn’t seem the least bit excited about the Versa (in stark contrast to Faulkner Honda), or about being there, or about anything at all. It’s not that he was rude, he just didn’t seem the least bit interested in whether or not I bought my car there. Maybe that’s a strategy; maybe he was expecting me to feel sorry for him. Regardless, we took the Versa out for a test drive. While not as energetic, nimble, or quiet as the Fit, the Versa offered far more headroom and much more comfortable seats. The dealer made sure to talk trash about Hondas and Toyotas as much as possible in our short jaunt up to Mushroom Hill and back 322. Between the car’s impotent performance and the sales rep’s conduct, the test drive was far from enjoyable.

We got back to the dealership and started negotiating. Round one opened up at $7500 trade and MSRP. Round two went to $8000 trade and $100 off MSRP. And this is where it gets interesting. Round three involved me going home and coming back the next day (I had failed to do as thorough research into Nissan as I had into Honda, so I went home to correct this).  Upon returning, I informed my sales rep that their trade-in value was far below what I was expecting, and I wasn’t satisfied with his price on the car. He explained that by offering me the car at $14335, they had already come down $2000 off MSRP, so really it was like they were offering me $10000 for my car.

However, according to Nissan’s website, MSRP on the Nissan Versa 1.8S configured with cruise control, splash guards, and “1.8S Power Package” is $14445, including $625 destination & handling. So according to Faulkner Nissan, $14445 – $2000 = $14335.

I guess Faulkner Nissan assumed I wouldn’t be capable of going home and checking the MSRP myself..

Now, I’m not saying they lied to me. I’m sure that they conduct business to the highest standards of ethical integrity. They’re just idiots who use 1970s-era used-car-salesman tactics and employ disinterested sales reps who presumably have a million better things to do than help customers. Between the combination of the Versa’s poor performance, the sales rep’s “meh, I don’t care” demeanor, and the dealership’s poor math skills, the door has been pretty much closed on the Versa. And truth be told, it definitely eroded my otherwise positive experiences with the Faulkner name.

Next up was Harrisburg Toyota to check out the Scion xD. In case you’re not up on these things, Scion is the youth-oriented stepchild of Toyota. They make that ugly-as-sin Element knockoff that would fall apart if you ever so much as thought about going off road, the xB. The xD is a stubby hatchback that looks similar to a Dodge Caliber. Fuel economy and performance were acceptable, but the vehicle still didn’t have the crisp handling of the Fit or the high-power / high-economy combo of the Civic.

To be honest, I went into Harrisburg Toyota with mixed feelings. They’ve had some ridiculous and/or offensive ads over the past decade, and I remember some shady allegations about why they had to change the name from Hartman Toyota to Harrisburg Toyota. Nonetheless, I wanted to see what they could put together on my vehicle. My sales rep was far more attentive and knowledgeable (and downright personable) than the one from Faulkner Nissan. He didn’t bash the competition, and he was able to make intelligent comparisons between the xD, Fit, and Versa.

Harrisburg Toyota’s showroom, recently rebuilt, was clean and organized if not a bit barren. One “trick” that I immediately noticed was that they had a 2007 Corolla on display. Why 2007? Because the EPA changed their fuel economy standards for 2008 model years, and every vehicle’s 2008 gas mileage numbers are about 10% – 15% lower than they were in 2007. More on this later; for now, having a 2007 model in the showroom will undoubtedly get some consumers to compare their ’07 numbers with the competition’s ’08 numbers.

The coffee was adequate. A little burnt. But who am I to complain about free?

Negotiations started. I let the rep know that I had been to multiple other dealerships, that I was going to be purchasing this weekend, and that I already had my “magic numbers” in mind. Naturally, he asked what those “magic numbers” were. Also naturally, I responded with “You show me your best price, and if you hit my numbers, I’ll let you know.”

After disappearing for about five minutes, my rep returned with some disappointing numbers. $7200 trade. Since the price of all Scions is non-negotiable, the only room the dealer has to negotiate is on trade-in.  And since their profit on the car is firmly secured, I was hoping to see far better trade-in value than other non-Honda dealerships were offering, and I let my rep know this.

He disappeared and came back with $8000 trade-in and explained that this was as high as they could go due to the age of my car (four years, 105000 miles) and the fact that it would likely be sold at auction.  Now, Faulkner Honda already showed me a current Manheim report.  This shows what cars are selling for at dealer auction.  2003 Elements in “average” condition near my mileage were selling for around $8500 – $9500.  So what the dealer was telling me was that he planned on selling my car at a $500 – $1500 profit at auction AND collecting the profit off the Scion.  I told the rep that if they really couldn’t move any further on the price, then I’d take their price under consideration but in all likelihood would not be purchasing my car from them.  This is when the PIP started (though it appeared only the sales manager was available).  I received the standard lecture about wholesale auto pricing and Scion’s fixed-price policy.  My response was basically “that’s nice, but your competitors are offering me better deals”.

Despite the fact that they knew they had been knocked out of the running, Harrisburg Toyota remained calm and professional, which is more than I can say about some of the other dealers I went to (see tomorrow’s post).

Day two ends. It’s Faulkner Honda in the lead at $9000 trade + $1000 off MSRP on the Civic, Faulkner Honda at $9000 trade + $300 off MSRP on the Fit Sport.  Faulkner Nissan at $8000 trade + $100 off MSRP on the Versa.  Harrisburg Toyota at $8000 trade + MSRP on the Scion xD.

My first stop was Faulkner Honda on Paxton Street.  I bought the Element from them one snowy February morning back in 2004 and they’ve been great to me ever since.  Their showroom is *always* clean, their people are *always* friendly, and they’ve even done a few minor out-of-warranty repairs for me at no charge.  Their coffee is mediocre, but being free, it’s not the worst I’ve ever had.

My sales rep and I took the Fit out for a spin.  I said this post wasn’t going to be about the cars themselves, but let me just say that driving the Fit is like driving a go-kart at 70mph.  It is 27 different kinds of awesome.  Whether we were skirting traffic on 83 or darting through rush hour on Second & Front streets, the Fit never lost its edge.  The cornering is amazingly tight and, because of its low weight, the tiny 1.5-liter engine pulls the car around with a surprising amount of power.

After doing both interstate and city traffic (we RUSHED up the hill at Paxton and Cameron, proving the Fit had more power than it let on), we went back to the dealership to “talk about some numbers”.  I had already done my homework and found the invoice price on the Fit Sport and Civic LX, as well as what my car’s KBB, NADA, and Edmunds values were ($10300 trade-in, $14k retail).  I also found out what similar Elements were selling for on Autotrader ($13k – $16k) and what they were going for at auction (around $8500, though there was one Element listed in “below average” condition with 168000 miles that went for $9300).  I also know that there are additional holdbacks and factory-to-dealer incentives available, so asking the dealer to give me invoice on the car and maximum trade-in value was entirely within reason.

I also had my “magic numbers” in mind beforehand.  These were the numbers at which I’d stop dealer-hopping and sign on the spot.  In my case, it was $12000 in trade and invoice on the car.  Of course, these are the numbers that you never, ever share with the dealership, no matter how nicely they ask.  So suffice to say, I was prepared.

Right out of the gate, Faulkner offered me MSRP and about $7500 trade-in for my car.  Far from the worst opening offer I’d see over the next three days, it was a lot lower than I wanted (and you never take their first offer anyway, no matter what they say).  I sent my sales rep back to get better numbers.  And the game began.

One nice thing about Faulkner Honda is that when they disappear to “run it by the sales manager”, they’re only gone for a minute or two.  Unlike other dealerships, I’ve never been left hanging on the sales floor while they play Team Solitaire in the back.  The worst dealership I’ve ever dealt with in this area was Deihl in York, where I wound up walking out at the 10-minute mark.  More on that later.

After maybe three minutes, my rep came back with much better numbers.  $9000 in trade, still hanging on MSRP.  I explained that I was looking to either see more for the car or get the MSRP knocked down considerably.  I got the line about how there wasn’t much markup in a Fit (which is comparatively true; there’s LESS markup on a Fit than a Civic or Accord), but they came back on round three with $200 off MSRP.  I refused.  They refused to move on round four.  So did I.  Thus began the traditional Parade of Important People (PIP).  You know what I’m talking about:  One after the other, the F&I manager comes out looking frazzled and angrily declares that they can’t do business with me, the sales manager comes out and politely explains how auctions work, and the General Manager comes out and conducts an “exit interview” to find out why I’ve chosen not to buy from them.  It’s all a big song and dance to make the customer think negotiations have ended.

But negotiations only end when the customer says they do.  So, knowing that I had tied up one of their sales reps for the past two hours, I declared that I wanted to start over with the Civic.  And we did.

There was one five-speed Civic LX on the lot.  About ten seconds in front of us, two guys and their dealer arrived at the car to get the stock number; THEY were ready to purchase it, and their dealer was going back inside to get the key.  If this was a show put on by the dealership, I can’t say, but it was pretty funny since we already had the key.  Away we went.

Over to New Cumberland and back in the Civic.  Back to the negotiating table.  They really had no choice but to start where they left off with trade-in.  Round one was $9000 trade-in plus $500 off MSRP.  Round two was $9000 trade plus $1000 off MSRP.  They wouldn’t do round three, and I was getting tired.  This is the point at which dealerships generally expect to win.  They figure that if you’re exhausted enough and don’t fancy the prospect of repeating this again a half dozen times over the next week, you’ll eventually just figure that the deal is “good enough” and sign.  After all, what’s $500 over 60 months?

The answer is $8.83 per month at 2.9%, or $529.  That’s 15 tanks of gas.  Thank you, I’ll keep the cash.  I said I’d take their final offer and compare it to what I got from Ciocca, Apple, Ebersole, Liberty (Bloomsburg), and MotorWorld (Wilkes-Barre).  I thought it couldn’t hurt to remind them that they were no longer the only local Honda dealer.  As much as I like Faulkner Honda, I’m not about to let them off the hook that easy.

And day one ended.  The single-player score was Faulkner:  $9000 in trade + $1000 off MSRP on the Civic LX, or $9000 in trade + $200 off MSRP on the Fit Sport.