Negotiate certified pre-owned Lexus?

[HariOm]

We're getting ready to purchase a certified pre-owned Lexus from the dealer. Did the same thing 13 years ago and it's been a great automotive experience (still driving the same car). Question: does anyone know whether there is room to negotiate the price in this situation? Looking at the dealer inventory online, and using Carfax, most of the prices are, at most, a couple of hundred dollars above blue book. So wondering by what percentage I should try dropping the price.

 

[Matt]

We're getting ready to purchase a certified pre-owned Lexus from the dealer. Did the same thing 13 years ago and it's been a great automotive experience (still driving the same car). Question: does anyone know whether there is room to negotiate the price in this situation? Looking at the dealer inventory online, and using Carfax, most of the prices are, at most, a couple of hundred dollars above blue book. So wondering by what percentage I should try dropping the price.

I think @Vince knows something about car sales, along with perhaps a few other people here. Perhaps they can help.

 

[InstinctX]

When I purchased my car (new), I visited several car enthusiast forums.

Within those forums, there are buying threads. Some of the members are dealers...not sure how they make their money. But I was able to connect with a sales advisor in my area who guaranteed invoice pricing (I ordered a custom, build to order). With the internet, there's greater transparency around pricing ("confidential price sheets"). I was fortunate that when my car was ready for delivery, there was also a manufacturer incentive that I qualified for. The sales advisor was very up front with any fees I would pay .... (watch out for miscellaneous add-ons fees such as "dealer processing fees"). I ended up paying $2000 below invoice (about 15% off MSRP) -- which definitely made the finance manager not happy when I went to pick up my car.

 

[thepaul500]

We're getting ready to purchase a certified pre-owned Lexus from the dealer. Did the same thing 13 years ago and it's been a great automotive experience (still driving the same car). Question: does anyone know whether there is room to negotiate the price in this situation? Looking at the dealer inventory online, and using Carfax, most of the prices are, at most, a couple of hundred dollars above blue book. So wondering by what percentage I should try dropping the price.

I bought a Honda Certified SUV a couple years ago (2012?), so same same but different. I have no experience buying luxury vehicles, however.

I looked up the trade in value. This is the maximum the dealer would pay for that car. They need to sell for more than that just to recoup expenses. Knowing that, it gives you a number to shoot for, but knowing you'll never get it. (~19,000)

I then based my offer of around what the buying from private party value would be (~21,000). This was about 3k less than the kbb certified price, and ~4k less than their asking. Walked out the door after offering 22 and refusing to budge. I was completely willing to let it go, and you need to be able to do this, and stayed calm and friendly.

They called me back next day and we made the deal. They made their money and I felt like I got a solid deal.

So, yes, there is always room to negotiate, on everything.

 

[MickiSue]

I agree. It's the willingness to walk away that is key. You may not get that particular car, and you probably won't get it today, but you'll get a car you want for the price you want.

I started doing the research back when the only place to look was in the KBBs at the library. But I got, over the course of a few Saturdays, enough knowledge to buy the used station wagon that lasted me 5 years, and my sister another 4. All at well below KBB price, because I knew that it was one that met my criteria, but wasn't that popular in my area.

 

[Vince]

When I purchased my car (new), I visited several car enthusiast forums.

Within those forums, there are buying threads. Some of the members are dealers...not sure how they make their money. But I was able to connect with a sales advisor in my area who guaranteed invoice pricing (I ordered a custom, build to order). With the internet, there's greater transparency around pricing ("confidential price sheets"). I was fortunate that when my car was ready for delivery, there was also a manufacturer incentive that I qualified for. The sales advisor was very up front with any fees I would pay .... (watch out for miscellaneous add-ons fees such as "dealer processing fees"). I ended up paying $2000 below invoice (about 15% off MSRP) -- which definitely made the finance manager not happy when I went to pick up my car.

If you have a vin Buber I can get you the exact cars worth

 

[Vince]

Vin number

 

[Vince]

Key take aways are be able to walk away and also wait till last day of the month.

 

[HariOm]

Thanks @Vince, for that tip on the last day of the month. It confirms something I heard before. With regard to VIN, we're probably about a month from purchase, and I don't want to waste your time, so is it okay if I PM you the VIN in about a month? Otherwise this is an example of what we're looking for, and one we might negotitate on come March 31:

 

[InstinctX]

FYI -- this is one of the forums a friend of mine frequents

http://www.clublexus.com/forums/

.. you can search for pricing / post your own questions re: deals, etc

 

[Vince]

No problem once I get back back to work on Tuesday I'll run that vin number. Currently getting hammered with snow at kkr t but I will run the vin and tell you what I come up with.

 

[Vince]

Just so you know I sent you private message with info about vin number you sent.

 

[TheBOSman]

Thanks @Vince, for that tip on the last day of the month. It confirms something I heard before. With regard to VIN, we're probably about a month from purchase, and I don't want to waste your time, so is it okay if I PM you the VIN in about a month? Otherwise this is an example of what we're looking for, and one we might negotitate on come March 31:

Just wanted to note that I edited the post to remove the VIN, in case @HariOm does end up buying!-TheBOSman, moderator, and someone who has spent almost 10 years working at car dealerships

As for my personal thoughts, I echo the advice of @Vince above. You need to be able to walk away. Do not get married to buying a car, it is an appliance, not a love affair. You can definitely negotiate the price. I would never expect to pay below the private party price from a dealer, so if trying to negotiate a price below that, you might end up with a lot of disappointment. Do your legwork on what the pricing should be, work out a number that makes you happy, and walk away if it is over that while trying to negotiate as low as possible. I would try to negotiate as much as possible through the internet sales department as well, before you go into the dealership. Even on a pre-owned vehicle I would feel well about negotiating sight unseen as it is a certified model, particularly a Lexus. Ideally, you can get the price you want before you go in the door, and go in just to make sure the car is what you want and doesn't have anything noticeably wrong.

Also, if you're planning to own the car for 5+ years, I personally suggest renting the car for at least a day and put it through your normal daily paces. I narrowed my decision on my most recent car to three possible model options, and then I rented each car for 1-4 days. Made a big difference in my eventual buying decision.

 

[HariOm]

Thanks BOSman, for all of the above. At what level do I make my opening offer; that is, what percentage below my ideal price should I offer, leaving myself room to negotiate up to the ideal price? From the Lexus forum it looks like people in my state (CA) are getting around 12% below MSRP (before taxes). That's on new vehicles, and we've actually just expanded our field to include new ones not just certified pre-owned.

 

[InstinctX]

For pre-owned, I would try to calculate the invoice price of the car when it was initially sold as new. Search eBay and other sites for selling prices (Some dealers put their CPO's on there).

While doing research for my car (new), I was able to find a copy of a "confidential wholesale price sheet" to calculate "wholesale price" of the car with the options I wanted. Depending on manufacturer, "invoice" price is not always what is really cost for the dealer. This is a "trick" to make you think they're not making any money off the sale. I use 90 - 92% off MSRP for new.

• Base Lexus Invoice Price + the dealer Invoice price of Options + Destination - Holdback - Special Incentives = Total Dealer Cost.
• What is Dealer Holdback? A hidden amount that manufacturers give back to a dealer. It is a percentage of the MSRP or the Invoice price. The holdback for Lexus is 2% of the Base MSRP. There may also be "secret incentives" available depending on timing.

http://www.car-buying-strategies.com/lexus-invoice-prices.html

http://www.investopedia.com/articles/investing/091714/how-get-good-deal-used-car.asp

Also some cars depreciate much faster...
http://www.investopedia.com/financial-edge/1012/cars-that-depreciate-in-value-the-most.aspx

Did you search through the Lexus forum for pre-owned prices?