The Art of Haggling and Other Questions About the Civic Hybrid

Would you view it as an investment that will pay off for them some day?
How does the economics of licensing work out for Toyota? Don't they sell
their technology to Ford and/or others?

Also, if gas were as much in America as it is in Europe, I imagine the
demand would only increase. Maybe we would see more older, smaller
displacement cars fixed up (mechanically at least) and on the road.

By the way, I have no idea how much gas is taxed in Canada, but I have
travelled there in the past. I don't remember it being significantly higher.

Mark

 

Hello All!
My wife and I are very close to purchasing an '05 or '03 Civic Hybrid.
Although this is not the first car my wife has purchased, it will
essentially be the first I have purchased. I was wondering if anyone
can offer any tips on haggling with the Honda dealership. We feel this
is an important but somewhat unsavory part of purchasing a car. (I
know that some people view haggling as a sport - I hope they will sound
off here!) There may be some general rules of thumb to follow, but I
don't know them and would like any tips anyone could give. We'd like
to get them to come down off the price a bit - I think the sticker on
the '05 is around $20,000.

I was also curious to see if anyone knew the answers to the questions
that the salesman couldn't answer, specifically:
- What happens to the batteries after they are replaced? The
ecofriendly nature of this car is a big selling point for us. But the
fate of dead batteries is unknown to us right now. Would hate to think
they'd end up in a landfill or something.
- Has anyone any expereince with problems in extreme weather
conditions? (tough starts in extreme cold, for example)
- Can some one explain, in as plain a language as possible, under what
circumstances the auto stop feature occurs in the engine? My wife and
I read a little about it in the manual on the test drive, but we're a
bit confused still. Do all of the conditions listed in the manual have
to be present before the engine shuts down? Or just one or two?

Any feedback at all on this car is appreciated. Just for reference,
both of the cars we're looking at have the CVT transmission.

Have great day,
Matt

 

The basics are simple. You have to be willing to walk out of a
dealership emptyhanded if you don't like the initial results.
I've been pressured with, "what can I do to see you walk out
with the keys". Then I shopped around, got some more quotes,
walked back to the dealership and got my price after looking
around.

The other thing is that you can now use Edmunds or any of the
auto services to contact multiple dealers for quotes. The Civic
Hybrid doesn't have options, so quotes should be. And don't
forget that financing is very important, unless you plan on
paying cash. Once I took an advertised factory financing special,
and the financing manager told me he was a bit miffed about it.
Something about not making anything off of it, when normal
financing deals net them decent profits.

 

those tips sound very good - i appreciate you taking time to answer!
any other tips from anyone would be appreciated.

 

First, this is not a "gotta-have" car. It's just one of several you're
looking at. And this dealer is just one of several you're visiting.
It's a mindset -- communicate it to every salesman that you talk to.

Never be afraid to say the deal isn't acceptable & head for the door.
They hate for you to leave because your deal will probably be cut at
another dealer. If they want to negotiate, they'll ask you want you
want, and may actually listen more than before. Then you use the good
info obtained from Edmunds.com and elsewhere to outline the deal you
want. If you're not prepared, you'll get screwed or be wasting
everyone's time, including your own.

Don't be afraid to leave an e-mail or phone # with the dealer even if
you walk out. Often they'll give you a call, or the manager will call.
Listen to what they have to say; research anything that sounds fishy.
You don't have to commit -- ever -- and that's your ace card.
Sometimes these contacts can go on for months.

Leading up to, DON'T BE IN A HURRY. Communicate to the dealer that you
have all the time in the world. They don't. They have rent to pay,
and more cars arriving daily. They've got to sell them at some point,
and that point isn't too far away.

Be prepared to hear the truth -- the dealer may actually be honest,
when telling you a particular vehicle is in such high demand that
they've already given you their best price. Sometimes for a specialty
vehicle, it's true. It's your choice at that point whether to pay MSRP
or many thousands above it.

Try alternative contacts at the same dealer: call the fleet manager up
(just tell the receptionist you want to talk with "the fleet manager").
Frequently they'll give you a good price, pretty much non-negotiable
in some cases, and cut through all the b.s. If they even ask if
you've been dealing with one of their salespeople, just say no. (It
helps if you haven't been to the dealer in a few weeks.)

Once you agree to buy the car, you'll be thrown into a new pit:
dealing with the "F&I" or Finance and Insurance guy. He is not your
friend. For that matter, some females I've seen in this position are
even more cold-hearted if that is possible.) If you brought your own
financing (and why didn't you?) ask if they can beat it. Sometimes
they will. Every slug of an F&I guy makes $80,000+ U.S., and does it
by screwing as many customers as possible. Know the best rate you can
get before you walk into his office, and be prepared to say 'NO' to
every fabric treatment and undercoat deal they insist that you buy.
"You should be getting this and protect your Investment -- are you
Stupid, or what?" I actually had someone tell me that. She was very,
very pretty.

I wouldn't worry about battery disposal too much, I don't think that
they are particularly toxic. No lead, mercury, cadmium. Why don't
you worry about the ton of disposable diapers your kids are going to
put into that landfill?

JM

 

There is one big one: Have the willingness to walk away. That's the one and
only weapon they have zero answer for. Don't use this tactic as a bluff. It
won't work. You have to really mean it, and that takes some guts.

Just remember, they see people like you every hour of every day. Every
tactic you'll try, everythng you say, they've heard it all a dozen times
over. You will not fool them and you will not say anything new. Walking out
is the one thing they can't control and cannot fight, except by dropping
their price.

If you decide to walk away, be firm and don't look back. Don't hesitate.
Don't vacillate. You might just find a call from the salesman on your
answering machine when you get home, or you will be physically pushed back
into your seat, meaning you're going to get your price. If they let you
walk, your price was unrealistically low.

Having said all that, you've also got to be realistic in your expectations.
If a car is a hot seller, the ball's in their court and you will be
unlikely to get any sort of break on the price they want for it. If you get
up and walk out because you can't get your price on a hot seller, they'll
let you go.

If at all possible, avoid financing and trade-ins unless you have no
choice. Those two things are where they get most of their money. Do your
homework, then walk in with a set, ON-THE-ROAD price, and stick to it,
asking the salesman "what can you give me for that price?". On-the-road
means the final bill after ALL charges of ANY kind are added in. Don't
budge, and don't let them tack on other charges to your on-the-road price
at invoice time. If they do, get up and walk out.

The above approach gives the salesman the impression you're serious, that
you have the cash, and he will be hard-pressed to let you leave without
finding something that will fit the check amount you'll write.

He's more likely to hunt around for you for something to fit your price.
You may end up with a less-than-popular options package, or an unpopular
color, but at least you've got your price.

Oh, and one more thing: Forget this "below invoice" nonsense pushed by some
consumer groups. It's a mug's game and you won't win it.

 

Others have given good advice in this thread. Here are some warnings
about sly tricks.

If your wife is with you and the salesman leaves you alone in a little
office while he "checks with the sales manager", watch what you say.
Dealers have been known to bug such places so they can get hints about
how ready you really are to buy and what your price is.

Watch the guy with the adding machine! Re-check his totals. They've
been known to tell you they're knocking $ off and slip them right back
in again. Not so important if there aren't a lot of options.

Don't be a rug merchant. Haggling is all very well but don't be too
greedy. Know what the car is worth and don't ask for too large a price
cut.

Make sure your bank or credit union can't do better for you than their
finance guy. If you have cash from a personal line of credit at your
bank, don't tell the dealer. He may be giving you a deal on the car
with the intent of screwing you on the financing.

With hybrids, don't forget to factor the cost of replacement batteries
into the maintenance costs.

Then there's that 'extended warranty' business which I'll leave others
to comment on.

 

All of the negotiating tips were good, but I don't know if they'll be
that applicable to hybrids. According to all the media reports, hybrids
are in extremely high demand. Some dealerships are selling above MSRP
because people are willing to pay that much.

 

Then you're screwed, as is anyone lusting after an item that is selling
very well and/or is in short supply.

At this point you may want to consider whether paying a premium of
thousands of dollars is worth the small savings in fuel dollars you'll get
with a hybrid.

Overall, it may be that an ordinary Civic will cost you less in the long
run.

If cost is not the issue but environmental correctness is, then you have no
choice but to bite the bullet and pay for the privilege of being pious.

Even at the prices these cars sell for, both Toyota and Honda lose money
overall on every hybrid they sell.

 

heh... they wanted my girlfriend to buy an extended (7yr, only 4 were
additional) warranty for...

"only $30 more a month!"

hm... 12 mos, times 5 years, times $20. $1800? i laughed.

 

dont buy based on monthly payments

dont fall for the "up to" scam...

salesman: how much can you afford a month?

you: bout $300

saleman: up to?

you: well, maybe $350.

theyll figure out a way to work the deal, but itll be in their favor.

 

i dont believe thats true any more for the prius. i think theyre finally
in the black with this generation.

 

Toyota has aggressively marketed their technology to other manufacturers,
and that is with the aim of recovering their costs for what is definitely a
superior system.

At the end of the day, it's still debatable whether or not Toyota will
actually end up making more than they spent on hybrid technology. And
Toyota ain't sayin', except to state that if "development costs" are NOT
counted, then they're "breaking even". That's straight from a Toyota press
release of a couple of years ago.

If there's one thing definite about "green" technology, it's that the word
"cheap" does not describe it.

Of course. But gas in Europe is far, far more heavily taxed than it is
here, and taxes account for ALL the price difference. The "environment"
doesn't get that tax money, the government does.

Diesel and propane are all the rage in much of Europe. Not because they're
inherently cheaper, but because tax policies leave consumers with no
economic choice.

Not much more than in the US. Our gas is almost exactly the same price as
that paid by those in California, but is more than that charged in
Pennsylvania. Today I paid 78¢ per liter for 87 octane, which is about
$2.65 per US gallon. However, if you factor in our lower standard of
living, I paid more like $3.53 US per gallon. The Brits pay about $5 per US
gallon.

 

I wonder if Honda is losing money on the Accord hybrid. In any case,
not all hybrids sell at a loss. I think Ford makes money on the Escape.

 

That is a great tip. 48 month loan stretched out to a 60 month loan.
I've even heard 72 month loans but this was on a certain brand of
'luxury automobile'. Financial insanity.

 

There is an excellent book on negotiating, called "You can negotiate
anything" by Herb Cohen. (http://www.herbcohenonline.com/) I see from
his web site he has a new book out. Time and information are two of
the major keys. Time being the amount of time you are willing and able
to put into it. If you want the car by this weekend, you will pay more.
If you are willing to visit many dealerships and ask many questions,
you will get a better price. Obviously your time is worth something,
so there is a trade-off to be made. Information includes what other
dealers are selling the car for, what their inventory level is, etc., etc.

Good questions about the batteries. I don't know the answer, but I
would be very surprised if Honda doesn't have a plan. Whether that
plan is carried out is another matter.

Good luck.
Dan


(This account is not used for email.)

 

Are you talking strictly about the latest green technology, namely,
hybrids?

Or do you mean going back across all time? If so, then is it your
understanding that the substantial car emissions improvements since about
the 1960s has been 'expensive'?

It seems to me, based on buying cars for a couple of decades now, that it
has not been expensive.

I'm focused on small cars, because of course those tend to be the greenest.

Now maybe that's because car manufacturers were forced to mass produce
certain technologies, and the mass production aspect made prices not
skyrocket.

I've run the numbers in the recent past, and I agree hybrids currently are
not worth the money for the consumer. Gas prices would have to go up a lot
more. I haven't looked at whether the manufacturer is losing, too, but will
take your and others' word (here at the newsgroup) for it now.

I welcome citations on the cost of reducing automobile fuel emissions since
the 1960s.

 

But from Jan. 11, 2005:
-----
The Prius and Honda Motor's (nyse: HMC - news - people ) Civic Hybrid are
the two most financially successful hybrids on the market. They probably
don't make large per-car profits, but they aren't among their companies'
loss-leaders. Honda's odd-looking Insight hybrid, which has the highest
inventory on the market, is among Honda's loss-leaders, which would seem to
make the case for more conventionally-styled hybrids.
....
A major financial advantage for the [Toyota Lexus 2006] RX 400h is the fact
that Toyota's hybrid powertrain program began to break even midway through
2004 (a powertrain is a car's power-producing and transmitting components,
including engine and transmission). The tooling for the entire program has
not yet been amortized, but probably will be within a couple of years;
sales of cars such as the RX 400h will help offset such costs. More and
more Toyota hybrids, from this point on, will mean more and more
revenue--especially if Toyota continues to put its hybrids in existing
models, thus saving the cost of building new cars from scratch.
http://www.forbes.com/lifestyle/vehicles/2005/01/11/cx_dl_0111vow.html
-----
and
-----
The success of the Prius has taken Toyota by surprise. The average wait at
American dealerships is currently six months, even though the company
increased its sales target for North America from its initial estimate of
36,000 units to 47,000 for 2004. To meet demand, Toyota announced another
increase in August, saying it would push monthly global production up next
year by 50% to 15,000 cars, and double its allotment for America to 100,000
units. While that number is still only one-quarter of last year's sales for
America's most popular Toyota model, the Camry, it shows that consumers are
willing to pay a premium for clean, environmentally friendly cars-as long
as there is no need to compromise on performance.
http://www.economist.com/audio/displayStory.cfm?Story_id=3422941

 

The Forbes article says what I've been saying all along, that it's an
expensive way build a car.

Toyota is only just now starting to reach the break even point, so they
have been losing money on the car for a long time, which is what I said.
Originally, Toyota never intended that the car actually turn a profit, as
it was supposed to be a "statement". Well there appear to be enough people
out there with rather different priorities to turn that concept on its
head. Toyota is as surprised as anyone.

Now Toyota is selling the technology, sort of like GM did with their
automatic transmissions in the '50s (only then it was the tranny itself,
not the technology), which helped them pay for development costs that much
quicker.

"Green" technology IS expensive. Hybrids cost more than regular cars and
still don't make the sort of profit regular cars do. "Green" technology is
most popular in wealthy contries that already have the best and cleanest
living conditions, and the longest human lifespans.

 

I think I'll let the excerpts from the articles I posted speak for
themselves.

People can google for more info on whether going green pays for
manufacturers (and has been cheap or not for consumers) since the 1960s or
so.