Here’s a rare Wheels post that doesn’t talk BMWs. This past weekend my wife Gabriele and I purchased a brand new 2011 Toyota Highlander.
Readers of this blog will know I’m no believer in buying new cars. My view is let someone else take the new car depreciation hit. But as I explain below, the numbers really made sense in this case.
It wasn’t an impulsive decision. Gabriele had been thinking about this for a while. She really liked her 2005 Infiniti FX35, but was ready to trade some sportiness for more comfort and interior room. After a lot of online research, she decided a Toyota Highlander was the right choice. She originally started looking for a 2008 or a 2009, but found that the new models were not that much more expensive.
The post-Christmas holiday week gave us some time to car shop. First step was to look at how to finance. And here was another surprise — unlike previous purchases, our credit union wasn’t the best choice. We still love Northwest Federal, but they let us down this time.
They were offering a higher percentage rate than many dealerships. That was a change, because in the past we’ve always known before we set foot on a lot how we would finance any purchase. This time we were very open to Toyota’s 2.9% offer.
Second step was related to the first. We had to get enough for our trade-in to retire Gabriele’s existing car loan. We’re not the types to just roll the balance forward into a new loan — that’s a slippery financial slope to start down. It was going to be her car so it would again be her loan — Gabriele felt strongly about that.
Our first dealer was Jack Taylor Alexandria Toyota on Route One. We liked Eric the sales guy, he was an old-timer who had been selling cars for a long time. Gabriele found a blue 2011 that she really liked. Eric was ready to give us a very good out the door price (tax, tags and delivery included) with the 2.9% financing and the $500 rebate, as opposed to one or the other.
But just when it seemed like things would be too easy, their trade-in offer came in. It was a joke — more than two thousand less than the lowest range of trade-in prices we found at Edmunds.com and KBB.com.
So it was time to go back to our old friend CarMax. We’ve sold them two other vehicles at prices we thought very fair. The next day we took the FX35 to the Woodbridge CarMax location, and they came back with an offer that was not only better, but actually more than we thought we could get. Good-bye old loan, and the hunt for the right Highlander was back on.
Gabriele found it at Koons Toyota in Tysons Corner. Salem (he goes by his surname since Americans can’t pronounce his first) was very friendly and attentive, and with his help we zeroed in on a red 2010 FWD with the SE package and a black 2011 AWD base model with the Technology package. Then it was a question of which one we could get for the best price.
The first offers were way off. Having just gone through this at another dealer, we had a good feel for how much we could negotiate. It took a while, and a couple of trips by Salem to the back to “talk with management.”
But we got there with the black 2011, for a price that was thousands below MSRP. And we got all the perks off the table with used vehicles — full warranty coverage, roadside assistance and even two years scheduled maintenance. The Highlander is a lot of crossover for the money, with nice touches like projector headlights, back up camera, Bluetooth phone synch and loads of room. Most importantly, Gabriele is thrilled with her new car.
(Note — I’m reluctant to put hard dollar numbers in this post. Car dealerships need to make a profit just like any other business. But if you’re in the market right now and would like more details, just drop me a comment.)
Did we get the best deal possible? Probably not, and that question is almost impossible to answer. To know for sure you would need intimate knowledge of things like actual dealer cost for the vehicle, cost of the dealer’s umbrella loan for every day the car sits on the lot, etc.
I am confident we got into that zone that gave us a fair price while still allowing Koons a decent profit margin. From the perspective of the loan payment, Gabriele traded in a six year old car and now has a new car for only another $40 per month.
There’s nothing you can do about cars being depreciating assets. But if you do your online homework, think financing ahead of time, sell your old car to CarMax and don’t mind some haggling, you should be able to get the best possible deal. And maybe even enjoy the process!
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