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Want a great car price? Just call!
Does sitting at home and phoning dealers really beat in-person haggling? It's not quite that easy.
November 2, 2004: 1:03 PM EST
By Peter Valdes-Dapena, CNN/Money staff writer

NEW YORK (CNN/Money) - Some time ago, when I was being trained for a possible career as an auto salesman, one of my duties was manning the phones. There was one firm rule: Never, ever, give a customer a price over the telephone.

"You know what you got when you got a customer on the phone?" the sales manager said. "You got this," making a hand movement suggesting a less-than-fully-productive use of one's time.

The goal was to get the customer to come into the dealership.

Things have changed. Many dealerships today, especially in large metropolitan areas, have fully staffed departments to deal with the phones.

The convenience of being able to dial up a real, buyable price without leaving your home certainly sounds better than driving from dealership to dealership on a long Saturday afternoon.

What's more, it could actually save you money, said Phil Reed, consumer advice editor for Edmunds.com.

Reed said he has tested the phone method against negotiating in person. Usually, the prices he's gotten over the phone are significantly lower and are arrived at in less time and with less hassle.

CarBargains.org, a Washington D.C.-based car-shopping service uses essentially this technique for its customers. A few phone calls can almost always yield lower prices, said Robert Ellis, director of operations for CarBargains.org.

That may be true. But, in our test, a quick round of calls didn't get us a really great price. Still, it got us off to a good start and it was far easier than driving from dealership to dealership. Clearly, though, some haggling would be needed.

The test

To see for myself how this approach might work, I contacted friends and acquaintances looking for someone who needed help getting the best price on a car.

A woman I'll call Lisa --she'd rather I didn't use her real name -- was looking for a Volkswagen Passat GLS wagon with four-wheel drive and an automatic transmission. She wanted a light color.

I used VW's consumer Web site to find dealers in her area. (I'm not identifying the dealers or the area where Lisa lived because I did not identify myself as a journalist to the dealers when I called.) Most of the Web sites allowed me to search their inventory on-line.

I found four that had the vehicle she wanted in stock. I called each one and asked to speak to the Internet manager. (If that request was met with confusion, as in one case, I asked for the fleet manager, instead.)

In most cases, I had to leave a message, giving the stock number of the vehicle I was interested in and saying I was calling several dealers for the best price.

I had some idea of the kind of prices I should be getting, because I had already checked Edmunds.com's True Market Value, Kelley Blue Book's New Car Blue Book and CarsDirect.com.

Edmunds and KBB offer estimated average prices paid for new cars. They both showed a little over $26,000 for the Passat.

But those prices don't include consumer incentives -- $1,000 in this case -- and they didn't include a $3,500 dealer incentive, which was contingent upon the customer's choice of financing. Subtracting that from TMV and KBB market price numbers yielded a figure of about $22,000.

CarsDirect.com offers two valuable functions in a price search like this. First, its prices are available for anyone to see without having to sign up or pay a fee, just like Edmunds' and KBB's market prices. But since you can actually buy cars through CarsDirect.com, they also offer real competition, reflecting all available incentives.

In this case, CarsDirect didn't have a dealer partner in Lisa's area with this car in stock. So, instead of a selling price, the site displayed a "Target price" of $23,431.

So I knew what I should be seeing if I played my cards right.

Actually, I didn't even play my cards right, really. I decided I was going to do no actual negotiation. I was just going to call and ask for a price. The only talking back I did was to say, "Thank you."

Did it work? Well, as you might expect, I didn't get an earth-shattering deal that way.

Once all the calls were in, the lowest price I got was about $22,800 for a wagon with an optional stability control package. Factoring in the incentives, that's about $1,300 above the dealer invoice cost.

It's also about $550 over the Edmunds.com True Market Value when incentives and options are factored in and about $900 over KBB.com's New Car Blue Book value. It did beat CarsDirect.com's target price, though.

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Clearly, just making a quick round of calls didn't entirely eliminate the need for haggling. It could be a good way to shorten the process, though.

I decided to let Lisa take it from here, but I advised her to follow Reed's suggestions for next steps: Make another round of calls to the leading bidders -- one dealership quoted full sticker price minus only the $1,000 customer incentive, so I figured they didn't deserve another shot -- and get the best quote faxed over with all the details.

She also followed another good suggestion: Always do a thorough test drive. She visited her local VW dealership and drove a car similar to the one she would be buying. She felt a vibration she didn't like.

That was it. No Passat wagon for her, at any price.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.