Question: What do the Toyota Prius, the Ford Escape Hybrid and the Mini Cooper have in common?
Answer: They are all selling for sticker price and above.
When cars are highly desirable it's hard to know how to go about buying them. How much should you pay? How can you locate the car you want? Will a deposit hold your car until you buy it? How long should you wait? What if the price changes once the car arrives? These are questions you may face if you want to buy a car that is in high demand.
It's my job to acquire long-term test vehicles here at Edmunds.com. I'm often chasing over-sticker vehicles because we want to report on the cars our readers are interested in. Now that I've been through this process several times, I've got a few tips to pass along.
My first recommendation is painfully obvious: find a reputable dealership to do business with. How do you know if a dealership is reputable? Some dealerships might have a stated policy to sell these high-demand vehicles at sticker price — not above. This dealership is thinking about the long term, about building customer satisfaction and generating repeat business. If customers are charged over sticker they eventually feel they got burned, especially when they see prices on their car begin to fall.
If you find an honorable dealership charging sticker price, they will probably have a waiting list. Put down a deposit (make sure it's refundable), get on the list and check in with the salesman frequently. How much should you pay as a deposit? This is negotiable. When we bought a PT Cruiser, the dealer asked for a $1,000 deposit. We asked if $500 would work. The salesman checked with his boss and agreed.
If you need the car ASAP, and you are willing to pay more, go to Plan B — the strategy I usually follow. This requires using the Internet and doing a lot of phone calling. What you want to do is find a car that is either on the lot in a place where that model is less desirable, one that has been rejected by someone who reserved it, or one that is on the way to the dealership. If you find a salesperson who says, "We have a truckload due later this week," you are in luck.
The search should begin by logging your request through Edmunds.com. You can start the process by using our Free Price Quote tool located on the Edmunds.com home page. This will bring e-mail replies from local dealerships' Internet managers. If the vehicle is in high demand, they will probably encourage you to make a deposit and wait. However, the Internet manager can keep his eye open for your car and — if one comes in — will probably give you a better deal than the salesperson on the floor.
While you are waiting for answers to your Internet request, build a list of dealers. You can also visit the manufacturer's Web site to find dealers.
If you live in a rural area you might not have many dealerships to choose from. If you live in the city there are apt to be several dealerships selling the car you want. If you strike out at local dealerships, you can try calling statewide until you find a car on the lot, or one that is inbound. Try to avoid crossing state lines because this can make it more difficult to register the car. In California, cars coming from out of state have to meet rigid air pollution standards, and while many of today's cars are designed to meet emission requirements in all 50 states, some are not. Look into these variables before you plunk down cash on a new car. It will avoid headaches later.
Regional differences can work in your favor as you search for your car. Ask yourself where in the state (or the country) would the car I'm looking for not be popular? When buying a PT Cruiser several years ago we found one for about $1,500 over sticker in Massachusetts. More importantly, we got it after waiting only two weeks. But we did have to wade through extra paperwork to get it registered because it was an out-of-state car.
As you call dealerships, ask for the Internet manager, fleet manager or even a sales manager. The higher the level of person you deal with, the faster the process will be. The sales manager has the ability to make a deal on his own; a salesperson usually has to ask for approval for everything.
Tell the salesperson exactly what you are looking for. Make sure you describe the make, model, color and all the options you want. If the car is on the lot, ask them to fax you a copy of the window sticker or invoice. In their zeal, salespeople often imagine cars have options that are not actually there. But the sticker or invoice doesn't lie. When you get it, look it over carefully.
After you locate a dealership that has the car you want, or has one on the way, you need to begin to set a price. Consult the True Market Value pricing on Edmunds.com and use this as a benchmark. When you talk to the salesperson at the dealership, you can say, "The research done by Edmunds.com shows that these cars are selling for such-and-such price. This is a fair price and I'm willing to commit to paying that price now and make a deposit." This is apt to be met with some resistance. And the pricing of in-demand cars varies wildly from one dealership to the next. But if you can set a price now, it will avoid attempts by the dealer to bump you when the car comes in.
Even if you find a dealership with a car coming in, and you make a deposit, you should continue your search. First, you may find a closer, more readily available car that happens to be in the exact color you want. Secondly, you will have a chance to check the pricing at another dealership. If you find two good prospects, you might consider making a deposit at two different places. This increases your chances of getting exactly what you want at a fair price.
Once you reach an agreement, try to get it in writing. If you are going to finance the car, or lease it, set the terms and get a quote on your payment. Obviously, if you are working with a dealership across the state, you need to get this information faxed to you in what is sometimes called a "Deal Disclosure" or "worksheet." Once everything is set, call the salesperson and tell them you are accepting the terms in the fax. You might even sign their fax and fax it back to them. There is nothing legally binding in this, but it might make it harder for them to change the terms once the vehicle arrives.
And what if they do try to raise the price on you? Remind them you have a written agreement. Remind them you put down a deposit to hold the vehicle at those terms. Remind them that you are willing to buy the vehicle at the agreed-on terms.
This price hike might come disguised in valid-sounding reasons. "We didn't know it included the extra-whoopie-reclining luxury seats — you have to pay extra for that," the salesperson might say. If this is a dealer-installed option, ask to have it removed and the money deducted. If they refuse, and the bump in price is modest, take the car and swallow your pride or demand a return of your deposit, walk out the door and start the process all over again.
While all this might sound like a lot of work, keep in mind that the search can be exciting and fun. Not only that, but if you're the first on the block with the latest car, you're going to get a lot of envious stares from your neighbors. That might offset the sting of paying over-sticker prices.
To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.