Best strategy to get lowest price on a new car

[dragonwalker]

I have a 09’ Honda Civic Lx with 135K miles valued by KBB at about 5K in a private party sale. I have decided that I’m going to get a new car sometime by the end of the year. I am looking at the Toyota Prius XLE. I know it’s not the most mustachian thing to do but I plan to do it and I’d like some help to get the lowest possible price.

I’m looking at getting the car toward the end of the year and likely toward the end of the month because I had heard this time is more ideal due to dealerships trying to meet quotas. I have the ability to pay the car in cash but I’m not sure that is the most optimal decision. Toyota offers 5.99% financing but a search of local banks shows I can get 4.99% on a 5 year term. However, I have heard that dealerships prefer financing with them since they make money off that. Assuming I have plenty of more cash remaining, could there be a case at this time for not paying in cash? I’m earning 3.6% in interest now.
 
There is also the matter of my car which I’m looking to sell or trade in. I believe that selling a car private party will always yield a higher amount but are there situations it would not? My car is mechanically in excellent condition but cosmetically it does have a few noticeable defects.

The Prius also appears to be in demand so I think I may have less negotiating leverage but what are some strategies I can take advantage of to get the lowest price? I have read of people “surprising” the dealership by securing a price and then saying they are going to pay in cash. I’m not sure that’s a good idea because they can easily renege. I did not have a good experience when I bought my car in 09’. These days for such a car how much am I realistically able to negotiate the price down?   

[GilesMM]

Most "mustachian" choice would be to keep the Honda for another 100,000 miles or so.  Second choice would be a used replacement.  A four or five year old Prius XLE would run you around $20K vs nearly $40k for a new one.

[dragonwalker]

Most "mustachian" choice would be to keep the Honda for another 100,000 miles or so.  Second choice would be a used replacement.  A four or five year old Prius XLE would run you around $20K vs nearly $40k for a new one.

I understand.

I am looking for advice on minimizing the price on the car I want to buy and optimizing how I do it. 

[GuitarStv]

Most "mustachian" choice would be to keep the Honda for another 100,000 miles or so.  Second choice would be a used replacement.  A four or five year old Prius XLE would run you around $20K vs nearly $40k for a new one.

I understand.

I am looking for advice on minimizing the price on the car I want to buy and optimizing how I do it.

Best mustachian advice would be to re-examine why you want the more expensive car and then optimize your life by figuring out why it's unnecessary.

[JLee]

To answer your question, basically pit dealers against each other - get a price from several dealers, and go around and around with competitive quotes until someone gives you a deal you're happy with.

[jrhampt]

I try to get different quotes for the total out the door price in email for comparable vehicles from different dealers.  Also, pay attention to price history and how long the car has been on the lot (you can see the full history of this on cargurus, for example).  Finally, when you get the total quotes, examine them for unnecessary fees and question which ones you don’t understand or whether or not they are optional. For example, my quote included a $300 “security” fee which turns out to be vin etching.  This is optional in my state so I had them drop it.  I also knew from looking at the price history that the car had been on the lot for a few months and had come down $3k+ in price, but it was up about $900 from the lowest price a few days before I found the listing, so I asked them to match the lowest price and they agreed.

[dragonwalker]

I try to get different quotes for the total out the door price in email for comparable vehicles from different dealers.  Also, pay attention to price history and how long the car has been on the lot (you can see the full history of this on cargurus, for example).  Finally, when you get the total quotes, examine them for unnecessary fees and question which ones you don’t understand or whether or not they are optional. For example, my quote included a $300 “security” fee which turns out to be vin etching.  This is optional in my state so I had them drop it.  I also knew from looking at the price history that the car had been on the lot for a few months and had come down $3k+ in price, but it was up about $900 from the lowest price a few days before I found the listing, so I asked them to match the lowest price and they agreed.

Is there a site that shows what the lowest price a particular vehicle has sold for in the area? I thought I remember seeing this before.

[charis]

Most "mustachian" choice would be to keep the Honda for another 100,000 miles or so.  Second choice would be a used replacement.  A four or five year old Prius XLE would run you around $20K vs nearly $40k for a new one.

I understand.

I am looking for advice on minimizing the price on the car I want to buy and optimizing how I do it.

Best mustachian advice would be to re-examine why you want the more expensive car and then optimize your life by figuring out why it's unnecessary.

Just to pile on here (sorry), but assuming it is still running well, replacing a car at its financially optimal point (a mid-high mileage Honda) for a brand new car is a pretty odd decision.

[Uturn]

The last time I bought a new car was in 2013.  I financed through the dealer because there was a rebate to do so.  I really wanted an out the door price and not a monthly price.  They did raise the interest rate to get the lower final price, but I didn't care because the second payment I made was payoff.  Paying cash carries no weight with dealers.

[Dave1442397]

Your best bet is to email every dealer within range, ask them for a quote with their best out-the-door price, and tell them you're going to purchase from the dealer with the best offer (even if you aren't).

In the email, be specific as to preferred trim line (XLE), must-have options, and let them know you don't want any add-ons, extended warranty, or gap insurance (all of which are cheaper aftermarket if you really want them).

As for financing, if they have a great deal, go for it. We have 1.9% for 72 months on a 2021 Venza. I make more than that keeping the money in SPAXX. If not, check credit unions such as PenFed.org

Just because I'm pedantic, you don't have a 9-foot Civic, you have an '09 Civic :)