Making the Offer

While home for Christmas I decided to resume my car search after a 2 month hiatus (my previous post published a few days ago was long overdue as those test drives occurred in early October). Now just because I wasn’t searching for a car that doesn’t mean I wasn’t thinking about it, I was. As my friend Chris put it so eloquently “dude, you’re the King of waffling” and you know what, he was right. I have gone back and forth on this car decision more times than I care to count. I’d wake up one day ready to rock n’ roll determined to buy a car, the next I would be telling myself “the Saturn is fine, no need to buy something you don’t need.” However, after more deliberation I decided that if I was going to make a purchase, the last week of the year was the time to make it happen.

First I started off by looking for loan pre-approvals; I checked three sources, Bank of America, BBT, and Chase. Bank of America’s process was simple enough, I filled out the online application and heard back almost instantly, they literally called 10 minutes after I hit the submit button. I was approved for a 72[1] month $16,000 loan at 4.07% not too bad, but I thought I could get better. So next was BBT, one of banks used by my parents. For this route they suggested I call and see what the rates were since I wasn’t an account holder. Ten minutes later the guy on the phone is telling me the best rate I would be approved for was 7.25%, I was shocked, but the reason was because I didn’t have a minimum five lines of credit history. That requirement surprised me as well, five lines seems to be an awful lot of credit. Regardless I only have two, my Chase Freedom Visa and Bank of America Visa. Oh well, on to Chase. I filled out the online application which was similar to Bank of America, but this time I had to wait a day for an email response. I was rejected…why? I have not a clue. I been a customer for 3+ years, paid my credit card off every month (balance is often over $1,000), and have part of my paycheck direct deposited to them. I will be investigating this further and will post what I discover. So in the end, Bank of America it was.

Now that I had financing in order I just had to find the car. I decided during my 2 month break that I wanted a BMW 328i Coupe 2007 or newer. I had been eyeing this one since before thanksgiving http://www.hillsboroautomart.com/web/used/BMW-3-Series-2008-Tampa-Florida/2139099/ it’s list price was certainly over my budget of $23,000 or $21,000 with trade-in but I figured since it had been sitting for a while, there was a good chance they would come down in price (at the time of my offer the list price was $26,976). Before driving out to Tampa to take a look I decided to do some searching near my neck of the woods so I spent an afternoon driving around the Clearwater St. Pete area looking for coupes, and ended up finding nothing I was interested in. The next morning it was off to Tampa to check it out in person. The car was just as nice as online, it was exactly what I was looking for, dark blue exterior, tan interior with wood trim, and spoke wheels. Time to take it for a test drive, upon the initial start the engine made a weird ticking sound, according the sales guy that was normal for a BMW that had been sitting for a while and would go away once driven (and it did). Music to my ears, the car had been on the lot for a few weeks now and because of this clicking I knew no one had driven it for quite some time. We took the car out and everything checked off, as I pulled back into the dealership I was ready to make an offer.

Turned out the sales guy Nick who had been helping me out up until now couldn’t talk about the offer and had to get a “numbers guy” to take over if I wanted to make one. Which looking back was unfortunate, because Nick was a great guy and had made the experience up until that point a pleasurable one. No “number guys” were available at that time so he hooked me up with the owner. At that point I was feeling really good, I found the exact car I wanted, it had been sitting for weeks, and I was about to talk to the owner who has the most wiggle room, which meant I wouldn’t have to deal with the “aww I got to check with my manager” crap, sweet! But this is where the story turns, the owner brought me into his office and proceeded to take me on a 20 minute sales pitch about how great the dealership is, how they don’t offer the antiquated financing technique of add-on loans (which I am pretty sure is not used anywhere, and is possibly illegal), he busted out the paint meter and told me they are the only dealership who uses one, told me how many vehicles they sell each month, and showed me pictures of the dealer auction of where they buy their cars. The real kicker was when took out a binder of email print outs from Gmail to show me “proof” of why a car-fax is unreliable and how every car from Miami is junk…I have no idea who would buy email print outs as proof…for all I know he could have typed them up and sent the “proof” to himself. Once we got past all this, I made my offer, which I knew was lowballing him, but I figured start low and work our way up. I offered $19,000 plus my trade in; he looked at me then got up and left the office mumbling something about being too far apart and not playing the numbers game. I sat there for a second to register what happened, then I got up and walked out. A bit flabbergasted by the utter rudeness of the owner I got in my car and left.

As I drove home I was a bit bummed that a counter offer wasn’t made. I decided I was going to give it two days and if I still wanted the car, I would call back and make a second offer. Well two days passed and I still wanted it, I called up the dealer to make my 2nd offer $23,000 no trade. The conversation was short and to the point, the “numbers guy” insisted the best they could do was $28,000 out the door. Since that was the case no deal was made. So, here I am few weeks later still driving the Saturn, but still looking for the right deal. My first car buying negotiation didn’t quite go as I expected, but hey, I learned a few things this time around and will be better prepared when I make the next offer.

Update: As of 1/15/12 I noticed the car had dropped in price to $23,976, a $3k reduction, so much for “the best we can do is $28k out the door.” I am considering putting in a third and final offer, $24,000 out the door, no trade in, what do you guys think?


[1] The reason I chose 72 months was to give myself the most flexibility in terms of the monthly payment. I don’t intend to take the full six years to pay off the loan, but if there is a month where I can only pay the bare minimum I wanted that payment to be the lowest amount possible.

Advertisements

6 thoughts on “Making the Offer

  1. What’s the value of your Saturn? Also, curious as to why you didn’t check any credit unions for loans? I went through GTE FCU and got an awesome rate on a 5-year loan.

    • I’d say the Saturn is anywhere between $2500-$3500. Every place I’ve offered it as a trade said they would give me $1000 so I’ve decided to sell it my self if I purchase something. I do need to check some credit unions before I make a final decision, they will probably have better rates.

      • Yeah I was really happy going through a credit union. As a first time buyer, dealerships couldn’t even compete with the rate the credit union offered me. I did buy new however. If you’re going to go with $24k with no trade in, I’d make that the out the door price (tax, tag, and title). I spent 3 and a half hours at the dealership going back and forth, but it was worth it since I got the price I wanted.

  2. Have you ever thought about attempting to selling your car now privately opposed to trading it in? It will probably be harder and take a little longer, but if you “waffle” for buying a new car, you would have the time to wait it out. You can probably get a little more for it in return. I don’t know if this is what you are thinking of when you said, $24,000 out the door with no trade in. I think that’s a good final offer also. I can’t imagine the “numbers guy” holding tight with his offer, especially since the price dropped. Since it dropped $3,000, I would even consider offering 21 or 22k for the hell of it.

    • Rob, that is exactly what meant with no trade-in. I’ve decided to sell it myself since I would be able to get more for it. Only downside is I have to layout more
      cash upfront. I’ve considered lowering my offer but I’m still unsure.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s