He doesn’t exactly say it this way, but James Bragg is out to help little guys become big wheels. The author of The Car Buyer’s and Leaser’s Negotiating Bible (Random House, $14) knows that since dealers have all the cars, and banks and finance companies have all the dough, the typical car buyer needs a little leverage to keep deals fair and affordable. That’s why, in 1993, Bragg founded ”Fighting Chance,“ a car-buyers’ service devoted to arming consumers with the one negotiating weapon they can wield by and for themselves: knowledge.
”Leverage in the case of buying a car is having some sort of knowledge of what constitutes a decent deal,“ Bragg said in a recent interview. ”And part of getting a decent deal is knowing where such deals are struck.“ Bragg, who serves as an occasional guest on National Public Radio’s Marketplace and as a contributor to Money magazine and to Bloomberg Personal newsletter, dispenses knowledge with a chatty, hands-on style. His book is but the keystone of a strategic ”kit“ of materials that Bragg personally assembles for his customers. He holds that buying a new car means solving a ”three-piece puzzle“: 1. discovering dealer invoice price, 2. researching factory-to-dealer incentives, and 3. calculating dealer holdbacks. ”Knowing these elements for every car they’re considering lets buyers compare apples-to-apples without any hidden charges hiding in the worm holes,“ Bragg says. ”Plus, it sets the ground-rules for successful negotiations with the dealer, since both parties now have the same fair estimation of the deal’s true value.“
The issue of ”holdbacks“ is instructive: These are regular paymentsusually made quarterlyfrom manufacturers to their dealers. As Bragg points out in his book, holdbacks comprise ”a portion of the factory invoice price which is collected and åheld back’ by the manufacturer.“ The idea is for dealers to self-fund a modest safety net or cash reservea year-round Christmas Club, if you willthat is ”guarded“ and administered by the manufacturer. As cars are sold, holdbacks add up until they are refunded in periodic lump-sum payments. Holdbacks aren’t represented on a dealer invoice, but they do contribute to the dealer’s profit margin for each car sold. If buyers know what, if any, holdback exists for a given vehicle, they have a better sense of the dealer’s ”wiggle room“ when negotiating a price for that car.
For new-car shoppers, Bragg puts together ”haggle paks“ for about $25 per vehicle. He and an assistant take orders and consult personally over the phone at 1-800-288-1134; or orders may be placed via the Internet at www.fightingchance.com. But Bragg is quick to remind that pricing information is just the starting point. Mastering the often arcane complexities of financing or leasing contracts is another crucial task. And negotiating skillbravura, evenis ultimately what it takes to turn the whole buy-and-borrow extravaganza successfully to your favor.
Bragg makes no bones about specializing in new car sales; just the same, his counsel regarding negotiating tactics is relatively universal. ”I don’t necessarily position myself as an expert on used cars, for example, but I think some of the same principles apply. You see, even a used car is a new car to the guy who’s buying it. The biggest difference in shopping for a new car and a used car is that nobody knows what the dealer paid for the used car. So you need to find some way to arm yourself with something as close to that level of information as possible.“
That’s no easy task, as Bragg readily admits. The various pricing guides on the market are good up to a point, he says, but ultimately they’re just numbers on a page. ”The problem is, there are no actual offers to buy or sell anything in those little books, you know? They probably get you within a thousand bucks one way or another. Unlike with new cars, where there are a number of sources for the various costs a dealer has in a vehicle, each used car is one-of-a-kind; and the dealer will never let you know what he paid for it.“
That being the case, Bragg has one hard-and-fast rule about making an offer on a used carwhether you’re negotiating with a dealer or a private party. ”Always offer only 85 percent of what he’s asking, and never pay him more than 90 percent. Particularly with a dealer,“ Bragg continues. ”There’s an awful lot more play in used-car sales. People get the impression that dealers make a lot of money selling new cars. They don’t make a lot of money selling new cars; they make a lot of money selling used cars. The spread between asking price and what they really paid for a used car is more like 25-30 percent; and there isn’t a single new car out there any more where the guy would make anything like 18-20 percenteven if a buyer were dumb enough to pay full sticker price.“
Bragg’s ”negotiating bible“ is a readable if occasionally eccentric blend of price-and-financing worksheets, self-help negotiating advice, and soap-box editorializing. His chapter on Saturn, for example, includes one of the few unvarnished appraisals of that company’s much mythologized ”no-haggle“ philosophy: Since GM guarantees its Saturn dealers broad and exclusive sales territories, ”you won’t be able to play one dealer off against another to negotiate price.... Think of it as a legal form of retail price-fixing.“
For sheer entertainment value, however, Bragg excels at creating Walter Mitty-like scenarios wherein the reader strolls into a showroom, unafraid and unintimidated, and manipulates even wizened, veteran fast-talk artists to concede whimpering terms. In other words, he transforms an activity that most people would rather extract their own wisdom teeth to avoid into a gold-medal daydreamand for some, perhaps, into the first fair and equitable car deal of their lives.
”If you don’t like the offer that’s on the table,“ Bragg exhorts again and again, ”walk away. And always leave your phone number, because chances are they’re gonna callespecially as the end of the month approaches, and assuming you’re at least willing to negotiate a modest amount of profit. In most cases, you won’t even make it back to your car before somebody says, åOK, you’ve got a deal.’
”Remember,“ he continues, ”a salesmanwhether for new or used carsis by definition in the ånow’ business. If he doesn’t make it happen now, it’s not gonna happen at all because he’s never going to see you again. He’ll still have all these same vehicles on the lot, but he’ll have lost a valuable prospect. So if you don’t keep anything else in mind when you’re negotiating, remember this: The reason God gave you feet is so you can walk away from car salesmen. It may sound simplistic, but it works. It’s the buyer’s ultimate form of leverage. It sort of keeps the salesman in his cage when he wants to complain that he’s not making any money. After all, negotiating the price is a cat-and-mouse game; believe me, it’s more fun to be the cat.“
Where there’s smoke
Much maligned diesel engines may ultimately lead the way to greener automotive pastures. Despite their reputation for noisy, sooty combustion, a new generation of clean ”bio-diesel“ engines is combining high-mileage performance with ultra-low emissions. According to a Wall Street Journal report this week (Feb. 9), researchers are experimenting with ”a wide variety of nonfossil fuels ranging from used vegetable cooking oil to beef fat“ by blending them with standard diesel fuel. One firm, Nopec Inc., based in Lakeland, Fla., reports great reductions in emissions among municipal bus fleets using such bio-fuels. Given new ”emissions scrubbing“ technologies and the inherent high-energyor ”latent heat“characteristics of diesel fuel, the goal of 80-plus miles-per-gallon diesel vehicles producing near-zero emissions of greenhouse gasses is just starting to be visible through all the smoggy haze.
Maybe it’s no surprise to learn that thumping the bumper of a new E-Class Mercedes-Benz can cost as much as $5,990 to repair. But according to the Insurance Institute for Highway Safety, the humble Hyundai Sonata has a sad song of its own with a bumper repair estimate of over $3,500. Other dang ding ringleaders in the same price range include the Toyota Avalon, Mitsubishi Galant, and Ford Contour. On the other hand, the Institute has cited three models for saving up to $2,800 in bumper repairs for the ’98 model year. After re-engineering, bumper repair for the new Volkswagen Passat costs as little as $138; for the ’98 Nissan Maxima, the cost is $217; and for the new Lexus LS 400, the study reports a cost as low as $345.
Dealer news and other views are invited by fax at (615) 385-2930 or by e-mail to Autosuggestive@compuserve.com.
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