Topic: Buying a Mazda3 Sport GS - how to negotiate?

[bytown_b]

Well hi there,

So I'm 98.9% decided that I'm buying a Mazda3 Sport this week. I want to negotiate the best deal possible. These are some of the things I'm looking at:

1. Getting a 2005 instead of a 2006 - will they give me a deal for getting last year's model? If so, do you have any idea how much I should ask for in terms of a deal? Like $1000 or is that unreasonable?
2. I'm trading in my beater of a jetta - I'm asking $1K for it - engine's still great - needs a lot of bodywork though. I'm hoping they take it.
3. Paying cash - I think asking for $850 off is reasonable if I pay up front?
4. Extras - what should I ask them to throw in the deal and what will they throw in do you think - block heater, rear spoiler, winter tires, first service free, a/weather mats?

Since I'm a girl, I've been treated a bit weirdly at dealerships around Ottawa. I went to test drive the new Honda Civic at 2 locations (once alone and once with a girlfriend) - the first time I was asked if I like pretty colours and do I like it cool because this car comes with a/c. When I asked how much I would get on a trade-in, I was told my front right suspension was about to go any second and it was so dangerous I shouldn't drive off their lot. I left (with my car) and checked with my mechanic who checked my car and assured me - no front right suspension issue. 

And the second time I was shown how the door holds open so I can get my groceries in and out without hitting the car beside me. Gee thanks. 

Anyway, I'm leaning towards getting the Mazda3 Sport GS but want to get the best deal possible - since I'll be negotiating alone and have not done this before, any suggestions or input would be welcome!

I'm dealing with Carling Motors and so far the salesman has been great but I still have to do the negotiations with the manager.

Thanks! 

[sterling]

2. I'm trading in my beater of a jetta - I'm asking $1K for it - engine's still great - needs a lot of bodywork though. I'm hoping they take it.
3. Paying cash - I think asking for $850 off is reasonable if I pay up front?

If you are asking $1000 for your Jetta, it will be virtually worthless to a dealer. Anything they give you for it will just be built into the price of the new one. Keep it and sell it yourself.

Paying cash is not worth any discount in itself. In fact, banks pay the dealer referral fees so they they would prefer you finance. Whether it is from you or from a bank, it's all cash to the dealer.

[bytown_b]

Thanks for the input - I appreciate it.

I think you're right in terms of selling my jetta myself. I just have to time it so that I can sell my car and buy around the same time although carrying two insurance will be a bit pricey I think but it's short term I guess.

I understood that car companies factor financing into the pricing of a vehicle so that occasionally they can offer those really low rates of 0 or 1.9% - they make their money anyways in the initial price. So if you pay cash, you are essentially saving yourself the amount you would have paid in the financing they didn't charge you - ie. you get 1.9% financing, well the other 6% financing you're not paying is in the actual price of the car.

[sterling]

Typically, cars are markleted with cash rebate OR low finance rate. The starting price is the same, then either deduct the manufacturers cash rebate OR finance at the low rate. These programs are from the manufacturer not the dealer. The dealer doesn't care which one you take. Advertised prices are always "Rebate to dealer" meaning the rebate has already been deducted to come up with the advertised price.

[DarthMaul]

bytown_b, Mazda was offering trading dollars during the summer, not sure it if still available.  Trading dollars is Mazda's offer of $1000 cash rebate or Mazda's low financing rates.  Keep in mind this was when they had 0% financing. You many want to wait till Nov 1st as the financing rates may be lowered and the cash rebate reintroduced.

FYI, I myself was looking for a Mazda3 sport GT and negotiated a $1000 off + the cash rebate (as mentioned above) but I didn't buy because I didn't want the same car as my female friend, not that there's anything wrong with that 

[bytown_b]

Thanks again Sterling.

So if financing isn't a factor then will buying last year's model be a factor or is that a fallacy too? Can I expect them to take $1000 off the current tag price or is that unreasonable?

Thanks for your input asa well DarthMaul.
Do dealerships know in advance if they are offering low financing rates or do they find out November 1st along with the general public?

[DarthMaul]

Thanks again Sterling.

So if financing isn't a factor then will buying last year's model be a factor or is that a fallacy too? Can I expect them to take $1000 off the current tag price or is that unreasonable?

Thanks for your input asa well DarthMaul.
Do dealerships know in advance if they are offering low financing rates or do they find out November 1st along with the general public?

I'm not sure if they know, but the better dealerships will give you the lower rate if it changes between the time you desposit and the closing date.

[Careener]

The Sport is the hatchback right?
Here's a recent quote I saw

MSRP: $20,395.00
Total Options: 
Total Basic Vehicle: $20,395.00
Discount: ($261.00)
Rebate: ($850.00)
Our Price: $19,284.00
Freight: $1,195.00
PDI: $0.00
Air Tax: $100.00
Fuel Tax: $75.00
Net Vehicle Price: $20,654.00
Administration Fee: $150.00
 Trade Amount: $0.00
Lien On Trade: $0.00
Total Vehicle Price: $20,804.00
PST: $1,664.32
GST: $1,456.28
Deposit: ($350.00)
Total Cash Price: $23,574.60

[sterling]

So if financing isn't a factor then will buying last year's model be a factor or is that a fallacy too? Can I expect them to take $1000 off the current tag price or is that unreasonable?

I'm not sure what the supply of 05 mazda3's is like right now. Being one of the top selling cars in Canada, I would guess that not many are left around. I could be wrong about that though. If 06's are already plentiful then I doubt that a Mazda would hold out for maximum price on a leftover '05. Mark-up on a Mazda3 is probably around $1200-$1600. So that, plus whatever Mazda is offering as a rebate is what you'd have to work with off of the MSRP.

[Careener]

The Sport is the hatchback right?
Here's a recent quote I saw
Edit..this is for an 06 GS Sport model

MSRP: $20,395.00
Total Options: 
Total Basic Vehicle: $20,395.00
Discount: ($261.00)
Rebate: ($850.00)
Our Price: $19,284.00
Freight: $1,195.00
PDI: $0.00
Air Tax: $100.00
Fuel Tax: $75.00
Net Vehicle Price: $20,654.00
Administration Fee: $150.00
 Trade Amount: $0.00
Lien On Trade: $0.00
Total Vehicle Price: $20,804.00
PST: $1,664.32
GST: $1,456.28
Deposit: ($350.00)
Total Cash Price: $23,574.60

[bytown_b]

Thanks again for the input - it's much appreciated!

The car salesman left a messaage last night while I was in class saying "the sales manager says there may be a few wholesalers looking for jetta diesels for the winter" and wanted to know if I had any more questions.

The other thing I remember from my conversation with him on Saturday was him saying that the rebate they give me on the car (say $850), they'll put towards my trade-in (if I trade-in) so that will save me on GST on the overall purchase since it reduces the price of the Mazda before taxes - is that not worth considering as well?

Careener - that is a low quote! Where did you find it? From what I've been looking at, with taxes, the Mazda3 Sport (before negotiations) comes in at ~$26,174.

Sterling - I appreciate your feedback! I know Carling Motors doesn't have any more Mazda3 Sports in any year so they'd have to look at other lots. I'm hoping there's 1 or 2 left. 
I can't ask for the whole markup off (people need to get paid right?) so I'm thinking $1000 is still reasonable or should I and let them bring the price down to $1000 from $1200?

DarthMaul - I'll ask my salesman if he knows if the financing is changing - I wasn't thinking along the lines of it changing monthly before. Thanks again!

[DarthMaul]

Check out www.cars4u.com.  Probably not the best price you can get but it's a good start.

[Snowman]

Check out www.cars4u.com.  Probably not the best price you can get but it's a good start.

  ...could not find a Subaru Legacy GT...stupid site

[sterling]

The other thing I remember from my conversation with him on Saturday was him saying that the rebate they give me on the car (say $850), they'll put towards my trade-in (if I trade-in) so that will save me on GST on the overall purchase since it reduces the price of the Mazda before taxes - is that not worth considering as well?

Hmmm, I'm not sure what that all means but here is how it works:

When trading in, GST is calculated on the difference. E.g. $20,000 new car - $1000 trade = $19000. The GST is calculated on the $19000. So, that means that any GST savings from trading equals the GST on the value of the trade. A $1000 trade saves $70 in GST.

Rebates have no relationship to a trade-in so I don't what your guy was talking about there. But I suspect it is as I said above: Your trade is basically worthless to the dealer so anything they give you will be built into the price of the new car. What's the point of using an $850 rebate to "show" you $850 for your worthless (no offence  :)trade? So you can save $59.50 in GST instead of getting that $850 discounted from the new car and then keeping and selling your old car for $1000? Hmmm, $59.50 vs. $1000? Now, having said that, selling your car yourself is not a sure thing and you may be willing to trade it just for the convenience of getting rid of it. In your scenario the cost of that convenience would be the $1000 that you may be able to sell your car for.

Regarding the wholesaler, these are the guys that buy the junk that a dealer cannot resell. A wholesaler buys cars cheap and resells them, often at auctions, or often to corner dirt lots. If you think your car would sell privately for $1000 imagine what someone would pay who needs to clean it up and resell it for a profit.

[bytown_b]

Hi again,

DarthMaul - I checked out the cars4u website. The price is actually the same as the dealer's. It's just the cars4u give you the bare bones of the car deal and exclude colour and a/c. But thank you!

Sterling - Thank you again for taking the time to give me your input - much appreciated.

So I had started telling the salesman on Saturday was that I want
$850 for paying cash (the salesman had told me that they could give me a discount rate if I do that - but maybe it's a rebate they would have given regardless)
$1000 for my trade-in
at least $300 off for buying a 2005 (although now I see maybe I should be asking for $1000?)

The salesman said that maybe if they took my trade-in for $1000, they could write up that they gave me $1850 for it instead so the GST would be less by rolling the $850 in with it.
So with the above example you gave it would be $20,000 new car - $1850 trade = $18150.

My car, according to my mechanic, is worth $1000 but it's a junker with rust but a good engine so no offense taken. I know it's of no use to the dealership really.

So the question becomes will they give me $1850 off anyway even if I don't trade in my car? Maybe I should ask the salesman if I should sell it on my own and they'll still give me that deal.

I feel like I'm overthinking this whole thing or starring in amateur hour - I'm not sure which.

[sterling]

I guarantee that they are just shifting new car discount into trade value. It's not a "tactic", it's just that nobody likes to hear that the car they've been driving everyday is worth $100. It's the truth about many trade-ins but most people are offended by that truth and run away, only to buy from the store that lies and tells them it's worth $2000 and then charges $1900 more for the new one. It's the same deal for the customer but guess who gets the business?

What you need to do (or maybe you already have) is verify and differentiate between the manufacturer rebates and the dealer's discount. Based on the above posts I'm assuming that Mazda is offering the $850 rebate.

If you ask the dealer what the price would be without the trade-in they will probably just give the trade-inflated price and hope you'll go for it because now they don't have to lose the amount they were "pretending" to put into the trade. What you really want to know is how much they (or their wholesaler) would pay for your car if you didn't buy a new one. My guess is that they will just say they wouldn't want it which gives you your answer - virtually everything they were giving for the trade could be discounted off the new car price if you kept your trade. Then you have to decide whether it's worth the potential hassles of selling your car yourself or reducing your GST by a few bucks.

[bytown_b]

The salesman told me on Saturday that he couldn't tell me how much the wholesaler would give because they needed a guarantee before calling the wholesaler that the car was being traded in. I took this as a tactic to get me to do the negotiations then.

I'm going to think about my course of action, talk with the salesman again and see if I can make a decision this week - snow's supposedly coming in the next 24 hours and I'd like to get this done before I need to change to my winter tires and all that.

Thanks again for the input Sterling - you've been an invaluable resource.

[sterling]

The salesman told me on Saturday that he couldn't tell me how much the wholesaler would give because they needed a guarantee before calling the wholesaler that the car was being traded in. I took this as a tactic to get me to do the negotiations then.

Sounds like your instincts are correct. Good luck and let us know how it goes.

[bytown_b]

Well I made the purchase last night. I feel good about the deal.
I bought the 2005 Mazda3 Sport GS in Red. It wasn't my colour of choice but that's the only colour of that model that was left in the 2005's. I don't mind red really.

It took about 2˝ hours of pricing and negotiating. I ended up with the following deal:
- $610 cash
- winter tires on rims
- block heater
- I'm selling my jetta privately so whatever I make off that sale.

It total with PST/GST it came to $24,972.50. And they'll let me pay for part of the car ($2500) on my visa so I get airmiles points and that's a bonus to me.

I said no to the extended warranty and the rustproofing. While I see the value of both, I'm still unsure.
It's ~$450 one time payment for lifetime rustproofing through the dealership or I can go to Krown yearly for $125. Is there a bonus either way?

I don't know that the extended warranty is worth it other than piece of mind?

I have a few days to think about it anyway.

I'm seeing if I can get it next week so I can save on licensing and insurance for October plus see if I can sell my jetta right away without carrying two insurances. We'll see.

The input I got here was extremely helpful - so thank you very much - I'm glad I posted.

[Craig]

You did just fine.  2 1/2 hours in a dealership can be grueling.

Also, congrats on getting out of there without dealer rustproofing or addons.  Spending that money on winter tires instead was very smart.  Go to Krown for better rust protection.

Extended warranty is simply insurance.  Most here would advise against it, and I agree.  Chances are, it won't come in handy, or won't cover the specific problem you may have down the road, despite what they tell you now.