A journey from $11,460 to $10,422
$11,460 is the sticker price on a new Pontiac Sunfire with the 1SV ("Special Value") package, but obviously that's not how much the car costs. Once I decided that this was the car I wanted after a fair bit of research online, all that was left was figuring out how I could get this car at the best possible price. That meant I had to talk to sales people. I hope my story will help you, gentle reader, when you go car shopping one day, or at least entertain you for a spell. Fair warning: long.





I am at once both fascinated and horrified by sales people. Their job is to make you buy a car from them, and since the dealer down the street is selling the same car, they live entirely in the margin of their sales prowess. Unfortunately, the tighter a market gets, the more incentive there is to use unethical tactics to succeed in that market.

A car sales person can reduce her job performance to a number, crudely:

(Number of cars sold n) x (average profit p)
where n > quota q

Given this, they have two motivations in order:
1. Make my quota so I won't get fired
2. Amplify my commissions so my take home pay will be larger
These two clash with each other- make too many deals and your paycheck is too small, hold out for higher prices and you might not make quota.

So my goal was to use this knowledge to determine who was most desperate to sell me the car I wanted. First I visited pontiac.com and looked to see which dealers in the area had the car I wanted. There were two: Don Allen in Oakland and Bowser in Pleasant Hills.

I started at Don Allen on Baum Blvd. A very tall man named Kevin greeted me and invited me to test drive the car. I tried it out and I liked it. The front seats were a little more crowded than I imagined, but there was a ton of trunk space when the back seats were folded down and I liked the way the car drove. If a big guy like Kevin could fit (if somewhat uncomfortably) in the back seat, anyone could. I was satisfied with the car, so again- it was a question of price.

I didn't negotiate that first day though. I let Kevin explain the financing process. He sat me down at a little table and brought a worksheet and a calculator over, and calculated what my monthly payment would be with various interest rates (he used 7% as an example). Car sales folk seem to really like breaking out the calculator and worksheet- I think it's a way of controlling what you think the price of the car really is, and possibly talking you into a more expensive car/option set than you really imagined. But I made it very clear that I knew exactly what I wanted. This was late Friday afternoon; he told me it was possible he could get answers back from the banks he dealt with about financing the next day.

Sure enough he calls me Saturday around noon and tells me I'm approved at 8.25% on a loan with the $4000 down payment I proposed, and that I could come get the car immediately if I like. We had company and I wasn't ready to buy yet, so I told him I'd come by at 7pm Monday and we'd work out details. On Monday pretty much all the dealerships will be open late.

Sunday the dealers are closed, but I am not idle. I call my friend Jeff who sold used cars for Enterprise Rent-a-car for several years. He told me the sticker price for the car I was looking at wasn't too bad to start with, and that he liked the Sunfires that he drove when they came his way. He had two pieces of advice that I thought were fundamental:

1. For a car at this price you can expect about $2000 of profit to be built into the price. (I suspect it's a little less since the 1SV is discounted below the normal Sunfire starting price of $15k to compete with the four-digit Hyundai Accent [$9999 MSRP], but we'll assume $2k for now and adjust as circumstances warrant.)
2. The sales person will try to screw you at the financing stage

So Monday morning before work I give a call over to the Credit Union at CMU on a recommendation from arilinn ( and Jeff- thanks to both!). Turns out their rate for new car loans is 4%, which is less than 8.25 in every mathematical system with which I'm familiar. By 2pm they've approved me for an $8000 loan on a yet-to-be-determined new car, all I have to do is get a sales agreement faxed from the dealer and they can cut me a check.

On Monday I leave work and rush as fast as my overworked Mitsubishi could take me down Rte 51 to Bowser. I ask to speak with a salesperson and I'm directed to a man named Mike. Mike is perhaps in his 50's, and seems to be going out of his way to extend what seems like basically genuine affability. He sits me down and asks me what I'm looking for, I tell him I know what I want, I've printed the window stickers for the cars I'm interested in from the Pontiac site already (and I show him the printouts), and all I want to know is whether they can beat Don Allen's price and by how much.

Gentle reader, this is where we truly enter sales-land. In my perfect world, he would have a standard markup and say "here's my best offer, take it or leave it." Instead he tries a bunch of ways to reduce the price without actually cutting into his commission, not all of which I can recall. He asks me if I've got a trade (no). He asks me if I or someone in my household owns a GM (no). He asks me what color I want. I tell him all the available colors are equally good. Etc, etc. I am getting impatient, but I expected this. One thing they always seem to do though is to ask what it would take to get me to buy a car today. He gets out the calculator and worksheet and I stop him telling him that I've got my financing covered through the credit union and I'm pretty sure he can't beat 4%. Finally he runs out of things to say and tells me he's going to check with his manager.

He goes downstairs and leaves me sitting at his desk for about 5-10 minutes, then comes back with a sheet of paper. He shows me three numbers:
$11,460 the sticker price
$10,670 the dealer invoice price
$10,500 the price they're willing to offer me.

I admit, that's a bigger chunk than I expected them to take all at once- almost $1000 off the price. I begin to think that maybe Jeff was right about the $2k built into the price of the car, so I'm wondering just how far this can go. I tell Mike that it's a good offer, and I appreciate it, so I'll consider it and once I get my credit union paperwork taken care of if that remains the best offer I'll come by and take it. At this point, he looks a bit bewildered, and tries to talk me into actually taking the car with me today. He tells me I can write him a check and he'll hold it for 5 days, I tell him I don't feel comfortable writing a check that can't legally be cashed.

This is a good time to mention that if there's one thing that sales people are good at, it's breaking down your defenses. They know you want to buy the car or you wouldn't be putting up with their bullshit at all. So I suggest two strategies:

1. Have a multi-tiered defense against the suggestion that you can and should buy immediately. My defenses were:
a) still looking for a better price
b) don't have credit union check yet
c) need to borrow some money to make the full down payment
d) want to let girlfriend see car before final decision

all of these were true, but dealers have crafty ways of dealing with them - don't underestimate them. Remember, they do this for a living. So there is also

2. Deliberately sabotage your ability to purchase the car on shopping day.

This way no matter how charming the salesperson is you will in some way be physically incapable of committing to the car. In my case it was the fact that I hadn't arranged for the money I needed to purchase the car. The "let the gf see the car" thing didn't really matter but seemed persuasive to the dealer so it proved useful- for others it may actually be a requirement so leave the spouse and/or your checkbook at home on the first round of negotiations. (Ultimately qiika didn't see the car I bought until it was in our driveway).

So Mike, unable to convince me to give up the ghost, calls for reinforcments. The soft sell is over and the hard sell is about to begin. He instructs me to wait while he fetches his manager. Mike comes back a few minutes later with a tall, very muscular man with too-white teeth and the sort of smile you'd expect in a car salesman. I have forgotten his name so we'll call him Mgr1.

Now a brief digression. I read an article a while back about how some dealerships are hiring up former Marine interrogators as closers for car deals. The idea is that they get you buttered up with the soft sell then take you into a "pressure room" where a very intimidating figure browbeats you into purchasing a car. You can't leave because it would be impolite to do so and besides, you actually want the car- so you try to give bad-cop what he wants so you can go back to dealing with good-cop and close the deal.

Well, it wasn't that bad. But Mgr1 tried hard to convince me that I should buy that specific car that day. He kept pointing at the sheet (which now had the 10,500 highlighted in orange) and insisting that they were losing money by selling the car to me at that price. He tells me I can look for a better deal, but how can another dealer beat their offer where they're actually losing money?

Apparently the question wasn't rhetorical; he let the question hang in the air and stared at me. I think this was where he expected me to break down and confess buy the car. Instead, I said "If it's a logic problem, I'd ask you how you could sell to me at a loss at all and still stay in business?"

He says "Volume."

Gentle reader, I had to try so hard not to burst out laughing at this point. Maybe he's never seen the SNL "Change Bank" commercial ("How do we make money when our sole business is making change for people? One word... Volume") If you lose a little money on each customer, and then you do it in volume- you'll net a loss equal to your volume times the number of such losses you take.

So I changed the subject. This is where I launched my gambit. I told him that the number i was trying to reach was $10,000... including taxes. I suspected this was incredibly unrealistic (this means a pre-tax price of about 9350, which means more than $2000 of profit has been built into a discount car), but it was a good starting point. He didn't think he could reach that so I told him I'd consider his offer and would call him before I made a decision in any case. I asked Mike if the sheet with the orange number on it was for me and they said no- you can't take that with you and snatched it up before I could grab it, so I left.

I got on my cell right away and called Kevin back at Don Allen. I said "I'm coming by at 7 as we discussed, and I managed to get a better deal on financing- all that's really left is to talk about price". He sounded disappointed- "Talk about price?" I told him Bowser offered me 10,5 and wondered if they could beat it.

This story is getting really long, geez.

So I go to Don Allen and we talk about the price, we wait for his manager to arrive, we'll call him Mgr2. He brings to mind Ed Harris cast as Ralph Nader in a TV movie. He hems and haws that there's no way they can do that, they're losing money. He doesn't know, even if he does this and that- he runs through the gamut of possible incentives and trades that don't apply to me in hopes that his competition missed something. He tells me he can do 10,450 and that's as low as he can go.

I mention the 10k goal and he tells me no way - and I'm convinced. I break out my second magic number in hopes that I can lure him a little lower. I tell him I'm prepared to put the down payment down tonight if he can bring it to $3k, which just so happened to be the amount I'd set aside for this purpose without having to make any other arrangements. That means the total cost of the car has to be 8k (the amount of my loan from CMU) plus $3k, for a total of $11k. He thinks and looks at his worksheet and unbuttons his collar and plays with his calculator and tells me he can get to 10,450 but can't get any lower. I tell him I'll consider his offer (which to a salesperson means "I'm buying from someone else and I hate you"), and he looks down and scratches some more numbers on his worksheet and plays with his calculator some more while Kevin and I chat about the way the internet has armed consumers with so much information that all the profit has been sucked out of the new car market such that the new cars are loss leaders for the used car and service departments. Perhaps it was really true, but since it was in his interest to make me think I was getting a good deal I can't take him as an unbiased source.

So Mgr2 looks up and tells me his best offer- 10,422.00, so my total including tax, title, etc would be 11,317.00. Kevin writes the number on a business card, not sure if it's a legally binding offer but it's more commitment than I got from Bowser. I thank them, tell them I'm leaning towards their offer for various reasons but that I'll let them know hopefully in the morning, and I call India Garden to order some Mattar takeout as I head back to my poor Mitsubishi. Then I call Mike from Bowser and give him an opportunity to beat 11,317, and I mention my $3k down payment offer if he wants me to buy tonight - he tells me he'll check and call me back.

As I'm getting back into my car and the yummy indian food is making me salivate, my cell rings. It's Mgr1 from Bowser. He tells me he can do 11,200 but only if I drive right out there tonight, if I call Don Allen to see if they'll beat it he won't do it. I tell him I've got yummy pea-goop and Nan and that I couldn't make it before they closed even if I tried, but that the only way I can do it tonight is if he can get down to 11k total- and he all but hangs up on me.

I take this as a sign that we've reached our true best price if he doesn't call me back again. He doesn't.

Next morning I make some arrangements with insurance and credit union, and I call Kevin to tell him I've decided to take the car from Don Allen so long as the total is 11,317 as we discussed. All that remains is for the sales agreement to be drafted, faxed to the credit union where I would pick up my check at lunchtime, then I'd visit the dealership, sign the papers in the presence of a guy with a notary stamp, and drive away into the sunset.

I arrive at the credit union at lunchtime and all the papers are prepared. I ask to see the sales agreement before signing off on the loan, since I've not yet seen it.

Gentle reader, I am no naif, but I was hurt. Kevin had tacked on a $900 extended warranty without asking me. The total was 12 thousand something or other. I got on the phone and he agreed to take it off. He had an excuse but it was poor- he said they have to "offer" it to everyone and his boss tried to call my office phone but couldn't reach me. (I haven't verified this yet by checking the caller list, but either way Kevin had my cell and I only agreed to the price we discussed -- UPDATE - I checked my caller id log, they did try to call my office phone, so at least that part was true.). Ultimately I had to sign a form saying I declined the extended warranty so I'm sure they planned to try to push it on me - but the right thing to do would have been to fax a note to the credit union asking for me to contact them instead of trying to slip $900 into the agreement attached to my loan without mentioning it first.

I was hoping to end this post saying that I bought from the less pushy, more honest-seeming dealer. In the end I decided to buy the car from Don Allen rather than go back to Bowser and try to renegotiate. It wasn't worth $117 to me to waste any more time on it and that was how I made my decision. I'm really happy with the car so far, but buying it was an experience that I am both glad to have had and glad to have behind me.