# How much do car dealerships come down on price?



## shaggybill (Nov 1, 2007)

I'm about to buy a new car for the first time ever, and I was trying to figure out how much I should try to talk them down percentage-wise. 10%, ya think?

I'm going to trade my gas guzzler for a little Kia or something with good mpg's and a dealership around here is advertising a new Kia Spectra for $9,000 after incentives, rebates, etc. I was wondering how much I should try to talk them down to.

Thanks for any pointers. I'll be new at doing this (and dread it) so I'm trying to get ripped off as little as possible.


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## NOYDB (Nov 1, 2007)

Visit this site www.edmunds.com first. Get the invoice price for the model you are interested in. Look up the avg wholesale price for your trade. A dealer should make about $300-400 on a small car. So invoice+$300 less trade, less incentives and rebates = fair price.

Do NOT let them mess you up by talking payment. 

Books have been written on how to negotiate a car deal. But it's not really that big of a deal. Google the prices so you have a good idea what's realistic. Try getting some quotes online, if the local dealer hits those numbers or close, buy the car and get on with your life.


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## stev (Nov 1, 2007)

You will get a better deal on the 07s vs the 08s.


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## cball917 (Nov 1, 2007)

*07/08*



stev said:


> You will get a better deal on the 07s vs the 08s.



this is correct because the incentives(rebates) on the older vehicles will be much more , but keep this in mind they are harder to find


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## shaggybill (Nov 1, 2007)

Thanks guys. I just got off the phone with the dealership and I'm going to go used now. Looking at a car that's priced at $10,900. 

I'm not sure what my trade-in is worth, but he said it would be a bit negative. (I owe more than what it's worth). I've got a 98 Mountaineer with 175k miles and some door lock problems and I owe around $2,600. I'm thinking about telling them 10,500 for everything (trade included) and seeing what they say to that. Is that too much to expect?


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## shdw633 (Nov 1, 2007)

I worked for 15 years in the auto business and dealerships mark there cars up 3000 to 5000 depending on the price.  A $10000 car is going to have cost the dealer around 7000 to have on his lot.  You need to do everything you can to find the value of your car.  Go to Nada or Kelly Blue book and find the average value of your car then take 10% off and that is what the dealer is going to try to get your car for.  Hold the line for average book on your car and give the dealer 1000 over on his and walk away with a great deal.  If you don't trust me on anything at least understand this.  You do this about once every 4 years, they do it everyday!!!  You will lose if you don't do your homework before you walk in the door!!!!  Take your time and remember, he who is most patient WINS!!  Don't be afraid to say no if you don't get what you want and be prepared to leave and not take the deal.  Wait until you find the car that you want at the price you want it at and you will win.  Get in a hurry and you will lose.  Just that simple.  Do your homework and be patient!!!  Good luck!

Also, 98% of all dealerships in the United States do NOT make a profit on their new car inventory!  They make profits on used cars, parts and service.  The new cars are used to get you to the dealership and establish you as a customer.


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## centerc (Nov 1, 2007)

get a new one Kia's loose value quickly unless you are going to keep it forever you'll be stuck with it. If you are neg - value already it will only get worse.


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## ponyboy (Nov 1, 2007)

go with no money down , sell your usd car/truck yourself ..better off ...


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## shaggybill (Nov 1, 2007)

Thanks again, everyone. 

Shdw, I just checked KBB and they listed my truck, which I consider in "good condition," but entered as "Fair," at $2700, which is more than I owe. I imagine what I'll run into at the dealership is them saying that KBB is not reliable. Which may be the truth, who knows...


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## littlewolf (Nov 1, 2007)

*Rule of thumb*

Good rule of thumb: Don't finance anything that doesn't appreciate in value. If you are upside down in a ten year old vehicle worth 1/5th a new one then you know what I mean. Trust me - I financed my first new car - never again. 

If you can't afford to buy it and it isn't going up in value (ex: a house) don't finance it! The money you save in gas will not cover the interest on the note!


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## NOYDB (Nov 2, 2007)

shaggybill said:


> Thanks again, everyone.
> 
> Shdw, I just checked KBB and they listed my truck, which I consider in "good condition," but entered as "Fair," at $2700, which is more than I owe. I imagine what I'll run into at the dealership is them saying that KBB is not reliable. Which may be the truth, who knows...



Rough rule of thumb, NO vehicle with over 100k miles really has a book value. Think about it. Ever heard anybody say, "Yeah, I'm going shopping for a vehicle, I'm looking for one with a lot of miles on it. The higher the better!"? 

Your vehicle "Books" at rough or below avg reguardless of how it looks. Since you are looking at a smaller car, there is not as much room for the dealer to roll over negative equity into the new car loan unless you add some cash to the deal or accept that he's going to have to show not much of a discount on the purchase price. Looking at a '07 with some end of year rebates and incentives would be the better way to go.


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## HGM (Nov 2, 2007)

I've been in the car business all my life, on the back end, but I understand the front end as well... I can tell you honestly, I'll never buy new again.. It kind of feels good to say you are the first one to **** in the seat, but its not all its cracked up to be... Say you get a GREAT DEAL on this $10k car. What will it be worth tomorrow? After you drive it off the lot, you just threw away about $2k. I'll find you a good 2yr old car if you give me $2k.. Although the dealer will make most of its money on a used car, you can find one that would be a much better deal because someone else took the hit on it.. Better yet, if you can swing it, find one you can afford and like outside, as a privatesale, buy it and sell your truck.. You'll be much farther ahead.. If I had a house for sale, that I could guarantee you, would be worth 40% of what you payed for it in 5yrs, would you buy it??


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## NOYDB (Nov 2, 2007)

How much is the new car warranty worth to you? How much is having new tires already on the vehicle worth? Brand new brake pads & shoes? The A/C charged and working? Band new anti-freeze, brake fluid, power steering fluid, transmission fluid, differential fluid and oil?

What's it worth to you to know that some hot rod racer hasn't been abusing the vehicle for the last two to three years?

If you buy used and add the cost of doing the PM required and replacing consumable parts sooner plus an extended warranty (vs. repairs out of pocket) "saving" on depreciation isn't all that much.

There's pros and cons to either side of the new/used issue. Depreciation is only an issue if you plan to trade soon enough for it to make a major difference. And if you buy right at end of year that can be minimized.

Your daily vehicle is not an investment. It is a consumable, you are using it up, not storing it away in the hopes the market will rise.

Your decision is how much of your budget do you want to allocate to transportation, and how much you are willing to pay for intangibles like appearance and things you desire above basic utility. 

Financing is a tool, interest is the cost of using that tool. If it accomplishes your purpose and you are willing to pay that cost, go for it. 

Just me, but life is too short to spend it obsessing over every dime. Save a dime, get hit by a bus, what did that accomplish? Not saying to waste money or not plan for the future. But live now too.


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## Phillip Thurmond (Nov 2, 2007)

I agree with HGM  I'm a car dealer and I would never buy a new car!  find you a nice clean used car with low miles and let the first owner take that first big hit on the price.  You will still have a great car that will last a long time pluse you will have saved lots of money and kept money in your pocket.  Hope this helps and good luck!


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## grim (Nov 2, 2007)

Promo interest rates on new cars can make a pretty big difference.  They are almost always better than cash rebates, and can make the 1 or 2 year old used vehicle a worse buy.  The rate I got made a new truck only marginally more expensive, with no wear and tear and a warranty.

Most dealers play a shell game between trade in value and new car price.  Most want to deal on the trade value so they can report higher selling prices on their new cars.  The only number you need to be concerned with is the trade difference.  You should establish to your self what an acceptable trade dif is by determining a fair price for both the trade and the new car.  How the dealer lists it on paper after that is irrelevant.  If the dif is 7K, what so you care if it is 20k for the new with a 13k trade allowance, or 9k for the new with a 2 k trade.

Of course for financing, you will need to add your current loan balance to the trade dif.  Ignore any suggestions from the dealership that a down payment would make things more affordable.  It will reduce your payment, but not your cost.

And like posted above, take your time.  Dont be afraid to walk out.  No deal is one day only.


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## dawg2 (Nov 2, 2007)

NOYDB said:


> Visit this site www.edmunds.com first. Get the invoice price for the model you are interested in. Look up the avg wholesale price for your trade. A dealer should make about $300-400 on a small car. So invoice+$300 less trade, less incentives and rebates = fair price.
> 
> Do NOT let them mess you up by talking payment.
> 
> Books have been written on how to negotiate a car deal. But it's not really that big of a deal. Google the prices so you have a good idea what's realistic. Try getting some quotes online, if the local dealer hits those numbers or close, buy the car and get on with your life.




That is good advice.  I always  print off the sticker off Edmunds and take it with me.  If they won't meet it, walk out.  You can even send your number to dealers on th ewebsite and setup an appt, they are the ones most likely to work with you.  Don't be afraid to drive a little ways either.

And it does not matter what the payment is, it is the price of the car that matters!!!!


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## HGM (Nov 2, 2007)

As for the maintenance and security feelings... It's nearly a non issue anymore.. Back when cars would only last untill 100k if you were lucky, that would be a valid argument. I bought a Ranger 4yrs ago, with 70k on it and have it long since paid for. It costs me for fuel, oil, filters and tires periodicly. I even go with 6-8kmi oil changes because of my type of driving. It is a consumible that I paid $7k for and now have 211,000mi without missing a beat and have no thoughs about replacement in the future.. It is cheaper for me to replace the shocks and bushings(1-2 new car payments) after 250k and $5-600 (1-2 car payments) when needed than to do the same maintenence  on a new vehicle. To each his own, I just know that couple hundred dollar payment looks better in my toy section than my driveway..


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## DaGris (Nov 2, 2007)

FIRST OF ALL!!!!!!!!!!!!!!!!....Dont buy a KIA!.......Are you insane?!.................we own a used car lot in Thomson,.....I will not trade a KIA or buy one at the sale.......Theres alot of banks that will not even finance a KIA.....They loose value quicker than anything.....and its a piece of crap too......do yourself a favor and at buy something thats going to be worth something down the road........Chevy Cobalt, Ford Focus, Base Ford Ranger.........something!........find you a used Cavailer, a Civic with s few miles on it.....Heck, go find you a late model Lumina, Impala,....something with Chevrolet 3000 series motor in it, those cars get high 20's mpg...even over 30 sometimes.................................my 2 cents.


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## dawg2 (Nov 2, 2007)

DaGris said:


> FIRST OF ALL!!!!!!!!!!!!!!!!....Dont buy a KIA!.......Are you insane?!.................we own a used car lot in Thomson,.....I will not trade a KIA or buy one at the sale.......Theres alot of banks that will not even finance a KIA.....They loose value quicker than anything.....and its a piece of crap too......do yourself a favor and at buy something thats going to be worth something down the road........Chevy Cobalt, Ford Focus, Base Ford Ranger.........something!........find you a used Cavailer, a Civic with s few miles on it.....Heck, go find you a late model Lumina, Impala,....something with Chevrolet 3000 series motor in it, those cars get high 20's mpg...even over 30 sometimes.................................my 2 cents.




Sounds lik eyou better drive over and see DaGris!


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## grim (Nov 2, 2007)

dawg2 said:


> And it does not matter what the payment is, it is the price of the car that matters!!!!



If you think this is true, I would love to finance your next car or house.  Heck I'd finance your lunch if all you are interested in is price.


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## HGM (Nov 2, 2007)

Woodswalker said:


> good luck with your purchasing decision, and btw, did you ever think about leasing a vehicle?




No offence, but there is not a much worse idea than a lease.. You pay a large down payment for a car that you will never own, unless you buy it at the end of your term durring wich you paid almost new car payments. If you run over your mileage allotment, you get WAY out of control. You will have to release another car by rolling the overage charges into the next one and never really be able to get out of it. Think about owing $15000 on a car worth $10000 after the lease is up, would you buy it? How do you get out of it? With a lease, you dont have a choice, you need to turn it in or buy it. If you turn it in, you have to come up with that $5k or roll it into the next car. $5k upside down before leaving the lot.. So, you'll have to tell the family "sorry we cant go on vacation this week, we only have 10mi left to use this month" on thier car... BAD BAD BAD!!


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## dawg2 (Nov 2, 2007)

grim said:


> If you think this is true, I would love to finance your next car or house.  Heck I'd finance your lunch if all you are interested in is price.



What I am saying is the dealer will try to set you up with a car and give you a monthly payment.  They will add a lot of costs in and spread it over 7 yrs, and a $9,000 car becomes $12,800 in payments.  You need to establish a price you can afford and know what the payments are for the length of time you want it.  They are very conniving especially with first time, young buyers.


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## grim (Nov 2, 2007)

dawg2 said:


> What I am saying is the dealer will try to set you up with a car and give you a monthly payment.  They will add a lot of costs in and spread it over 7 yrs, and a $9,000 car becomes $12,800 in payments.  You need to establish a price you can afford and know what the payments are for the length of time you want it.  They are very conniving especially with first time, young buyers.



Agreed.  Keep loan terms to 5 years or less.

Interest rates important too.  I have purchased vehicles in the past where we had a deal and then they offered unattractive rates, bumping the payment up.  I told them it was not good enough, and lo and behold, they found a better rate.  Just becasue you are done with the saleman, doesnt mean negotiations are over.  Its good to be preapproved by your bank or credit union just to always have a number to fall back on.  Then challange the dealer to do better.

I dont have much faith in internet sales departments.  The two dealerships I dealt with online, simply quit responding to my emails when I didnt accept their first offer.


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## dawg2 (Nov 2, 2007)

grim said:


> Agreed.  Keep loan terms to 5 years or less.
> 
> Interest rates important too.  I have purchased vehicles in the past where we had a deal and then they offered unattractive rates, bumping the payment up.  I told them it was not good enough, and lo and behold, they found a better rate.  Just becasue you are done with the saleman, doesnt mean negotiations are over.  Its good to be preapproved by your bank or credit union just to always have a number to fall back on.  Then challange the dealer to do better.




Another good point.  The dealership is not the only place who can finance a car


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## shaggybill (Nov 2, 2007)

Good advice. I appreciate it.

The car I'm looking at now is a 2005 Hyundai Sonata with 33k miles. It's priced at $10,995 so this afternoon I'm going up there and telling them $10k for the car and not a penny more, and they make the pay-off on my Mountaineer ($2600). And I'm not going to hastle and squabble with them. If they don't like that, I'll just leave.

Unfortunately, being in school, payment is pretty much everything for me. I'm looking for something under $200/month. If it's stretched out over 72 months, that's fine with me. This car should last me 120k miles.


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## DaGris (Nov 2, 2007)

shaggybill said:


> Good advice. I appreciate it.
> 
> The car I'm looking at now is a 2005 Hyundai Sonata with 33k miles. It's priced at $10,995 so this afternoon I'm going up there and telling them $10k for the car and not a penny more, and they make the pay-off on my Mountaineer ($2600). And I'm not going to hastle and squabble with them. If they don't like that, I'll just leave.
> 
> Unfortunately, being in school, payment is pretty much everything for me. I'm looking for something under $200/month. If it's stretched out over 72 months, that's fine with me. This car should last me 120k miles.



Hyundai's alittle better than a KIA


What kind of Sonata?

Current Black Book value...(avg. wholesale)
4dr sedan GL/ $7700- loan $9225
GL V6/ $8300- loan $9825
GLS V6/ $8850- loan $10375
LX V6/ $9350- $10875

avg wholesale is about what a dealer can pick one up at the sale for,..or what we would "like" to put in the car on trade.



NC is really too far away for me to help you....just dont get riped off


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## NickW (Nov 2, 2007)

Oh man I have bought so many cars over the years and I HATE it when you are trying to haggle..ie..the salesman runs back to the sales manager and says this is our final offer etc etc etc. That is why I only shop at CARMAX! It is the easiest process I have found for buying a car..don't have to get molested when you show up and the price is the price..no haggling.. It's the only way to go imo..


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## Allen Waters (Nov 2, 2007)

littlewolf said:


> Good rule of thumb: Don't finance anything that doesn't appreciate in value. If you are upside down in a ten year old vehicle worth 1/5th a new one then you know what I mean. Trust me - I financed my first new car - never again.
> 
> If you can't afford to buy it and it isn't going up in value (ex: a house) don't finance it! The money you save in gas will not cover the interest on the note!



smart!!! i drive a yukon, bad on gas but its paid for, i only have liability insurance and no payment. i think i save money every month driving it vs. a new one even though it uses the gas. i would rather drive my paid for gas guzzling yukon than pay a payment, interest and higher insurance on a forgeign car. the money spent washes out.


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## Mark Brooks (Nov 2, 2007)

My advice would be to keep what you have and pay it off.  

If you truly are upside down in the value vs. owed on loan, that money doesn't disappear.  It gets added to your car purchase.  

Cut down on trips and errand running and see if you can cut down your fuel costs.  Keep your tires inflated correctly and car tuned and gut it out.

Your long term finanical outcome is more important.  You can dig yourself a hole real quickly.

You are getting ready to spend a lot more money than your fuel cost in the short time will be.

Pay it off and drive it till it dies and you will be in way better shape than trying to drive a bargain at a dealership.  

Your young and have many years to drive new vehicles.  Finish school without debt and really be ahead of many of your peers financially!!

My thoughts
MB


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## Shane Dockery (Nov 2, 2007)

DaGris...

How much you seeing '03 Ford F-150 Crew cabs going for these days????


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## corn grinder (Nov 2, 2007)

There are two books out there to read first. One is "What car dealers don't want you to know". It tells the inside secrets of car sales, and what to expect. And it is on the money! The sales people, and sales manager will do just what the book says everytime. It's like reading there playbook!!
    Also you can pick up a book that shows the true price of a car (all cars for each year, updated yearly).It has all the options by code, and what each one adds. So you can pretty much tell down to a few hundred dollars what a dealer has in a certain car. The book says you must allow the dealer around 3% for advertising. These books have been a great help on buying our last three cars, And saved us a ton of money. These books can be found at your local book store, or library. Good luck anyway you go.

Look on ebay to see what the averages are running on used cars!

  Just my three cents worth Corngrinder.


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## DaGris (Nov 2, 2007)

Shane Dockery said:


> DaGris...
> 
> How much you seeing '03 Ford F-150 Crew cabs going for these days????



well,...it depends on what options they have and the miles/ condition of coarse.....believe it or not, even with the gas prices,.big trucks are still hot!....always have been and always will..........we just sold a 02 Ford F150,CREW CAB, v8, cruise, pwr w/l, XLT, 2x4, bedliner, 92 k miles, 20 inch wheels, very sharp truck for 11,000.00..............


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## DaGris (Nov 2, 2007)

big carlots suck!.........They think that they are soooo smart and their little stupid sales tactics work on everyone......I want someone to explain to me why does it take 6 hours to buys a car?.....ooooo,...thats right,...it doesnt!.......Our prices are on the window,....heck,..I'll even show a customer what the book value on the car he/she is looking at....I have nothing to hide......we get our cars completely serviced and checked out before the sale...I like to show the customer what service work we've had done to it too. If a customer buys a vehicle from me and two weeks later the "check engine" light come on or whatever.....we will repair/fix it most of the time.........sometimes I'm able to take care of all the $, sometimes we will pay "x " amount of dollars towards it......always try to work something out.......word of mouth is everything! Thats why is just under three years here, we have become the "best pre owned" carlot in Thomson (Voted buy the readers of the local newspaper) and sell more cars then anyone one else around here!


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## K80 (Nov 2, 2007)

Shaggy, 

I've been there and done that while in college and my advice would be to keep what you have and pay it off.  You will be much better off in the long run.

If you’re dead set on getting a new one, you need to calculate what your payment, insurance, and tag is per year and then find out what the payment, insurance, and tag is for the new vehicle that you want is.  After you have all of those cost numbers you need to calculate your estimated yearly miles are or will be and see what the difference between the total of each is.  I really doubt you will save much per month if you get a new one and once you reach the point that your current vehicle is paid off you will be losing money on a monthly bases.

When I bought my new truck I was doing better until I got to the point that my old one would have been paid off and I had an unexpected expense that I didn’t not have the cash for but would have if I would have kept my old truck.

The only two circumstances that I would suggest for you to buy a new one would be, 1) your current vehicle is not reliable or 2) you are in a situation where you can no longer afford the current payment you have, which was the case with me because my school load increased and I wasn’t able to work as many hours as I needed.  I could have gotten by but I was living off of ten dollars per week for food and habits and would not ask my parents for any money.

I’m sure if you really scrutinize your spending habits you can find ways save money for ex. if you average buying one 20 once drink per day at $1.20/piece that is $468/ year which is over 2 months payment of what you want your monthly payment to be on a new car.  If you drink beer stop that’s what I did unless a friend gave me one.  I’m sure if you look over everything that you buy you can find ways to get by until you get this one paid off.  Shoot if you don’t take summer classes and you work your tail off you could almost come up with the payoff this summer.

And to the question you asked, on a new car if you can get them to sell it to you at invoice the dealer will still make a profit!

Good luck with what ever you decide.


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## shaggybill (Nov 2, 2007)

Well guys, I bought the car. I did some research and everything I found pointed to the car being worth at least $12k in the condition that it's in. The dealer said he had just knocked the price down about a thousand dollars last week. After filling out some paperwork, I told him $10,500 and I wasn't going any higher. He said he wouldn't take any less than what was on the sticker price since it was already over a thousand below KBB. I said I couldn't do it and we shook hands and I left. I was half-expecting him to run out the door as I was pulling out saying he'd make the deal. Didn't happen.

I went to the mall closeby for a while thinking I'd get a call from him, but that didn't happen either so I called my dad and told him about the car, the price, etc. He told me that for what I was getting I should go ahead and buy it. So I went back to the dealership and told him that if they could get me some acceptable financing that I would purchase the car. They did, and so I bought it.

K80shooter, I definitely needed a new car. The Mountaineer could have bitten the dust at any moment. It has run fine for the last 90,000 miles, but it was due for something major. I could just feel it. I'd rather take on a new set of payments and have a reliable car than to get stuck with no car and 2600 dollars left to pay on the loan. The dealership made the payoff for me, plus a little.  On the new car I have 30k miles on a bumper-to-bumper warranty, which gives me some peace of mind.

The dealer problably made some money off me, but according to KBB and NADA, I didn't do too bad.

So here's what I got:
2005 Hyundai Sonota
33,000 miles
Bumper-to-bumper warranty for 30k miles
Lots of extras

$10,990

The fact that I don't have to worry that my mountaineer is going to crap out on me at any moment. Priceless.


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## NOYDB (Nov 3, 2007)

Congrats, peace of mind is priceless. Enjoy!


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## jinx0760 (Nov 5, 2007)

*Good Job!*

I think too many people almost have a heart attack trying to buy an automobile.  You did your homework, you made an informed decision and now you can get about your life.  It's not open heart surgery!  It's buying a car.  I expect people too make some money on me when I buy something and it doesn't make me lose sleep.  I think you did a good job getting the most for your money!


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## holton27596 (Nov 5, 2007)

go to a bank (or even better a credit union) and get a loan approved in advance. It will make your negotiations much easier.  I am also a fan of carmax. i got my 2005 f150 supercab fx4 with 23000 miles on it for 18, 988. I could not find a ford dealer that could touch that price.


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## SHMELTON (Nov 5, 2007)

I used to sell cars and the max amount of mark up in cars in that price range is about 3%.  So 10% is out of the question.  And with a KIA you will probably have a hard time getting them to go below sticker because they are so cheap already.  IMO


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