Buying a car: Getting money off

In continuation with the theme of frugality and of cars, I found out this method of buying cars from an interview with an economist talking about how to buy cars using Game Theory. It makes a lot of sense and is definitely advice that I will follow when next buying a car:

The Get Money Off The Price Of Your Car Trick

We could all afford to shave a few pounds of the price when purchasing a new car. It's very simple. Just follow, word for word, the transcript below.

The Transcript:

Decide exactly what car you want to buy in terms of make, colour (if matters), options etc.
CRITICAL: Do no go to a dealership! For this to work you will need to use the telephone only.
Phone all dealers who sell the car that you are interested in, who reside within a 50 mile radius (or however far you are willing to travel to pick up the car).
To each dealership that you call the following transcript must be followed:

You: Hi my name is [insert name], I plan to buy [vehicle of interest] today at [pick a designated time]. I am going to buy it from the dealership who gives me the best price.

Dealer: Hello sir/madame, you can't buy a car on the telephone. Come in and we will give you the best price.

You: I know I can buy a car this way. I know people that have bought cars over the telephone before. If you don't quote a price for me, I understand that you are telling me that you know you don't have the best price for me, in which case I don't intend to take up any more of your time and I appreciate you saving my time.

At this point the dealer will say one of 3 things:
1) Goodbye, in which case phone up the next dealer and start again
2) Will quote you a price, in which case you make a note of it and call up the next dealer
3) The dealer will say "yes but if I tell you a price you will call the next dealer and that dealer will quote a price that is £50 lower than the price I have quoted and then you will buy their car"

You: That's right so if you can go £50 lower this is your opportunity because I will buy from whoever can give me the lowest price. Furthermore I need the full total price that includes taxes and everything. I don't want to turn up and find you have charged me a couple of hundred extra for whatever gizmo or modcom you felt the need to add. I want the full price. When I come in I will not discuss the price. Instead I will come in with a cheque for the full amount made out to whoever gave me the lowest price. If you renege I will walk out and go to the next dealership and offer them the second best price cheque that I will also have on me and so on and so forth. So...what is your best price?

Buying a car: Analysis

Using this script forces the dealer into making you the best possible offer. It forces the dealer into competition with other dealers without the other dealers even having to be there. Thus they are forced into a competitive bargaining situation in which the true market value of the car is revealed. This is the lowest possible price for the car you want within the 50 mile radius.

Have any of you bought a car using this method/ a similar method?
Let me know how you('ve) get on.

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WorkSaveLive said...

I've actually heard of this method but I've never implemented it myself. We don't buy new cars very often and when we recently bought one we purchased it through a rental car company.

The price was insanely lower than any of the dealerships!

Mr. Moneybanks said...

Hi WorkSaveLive, can you divulge a little more. I didn't even know that you could buy from rental dealerships. What sort of savings can you make?

Get Rich Point said...

I am planning to buy a car shortly and I am certainly going to try this one out. I would like to share one more thing; my experience says that the dealers who quote a lesser price are the ones who provide a better service.

Mr. Moneybanks said...

Hi Get Rich Point. Please let us know how it goes once it's all completed.