Using A Car Buying Service To Negotiate and Purchase A New Car

I just read this article on Yahoo Finance, courtesy of Bankrate about using a car-buying service to shop for a new car. I’ve heard of this, but I’ve always been a little skeptical about the service. What if they don’t get you any deals? Do you get your money back?

The way it works is you give all of your information to the company including credit information, (scary) contact information, and information about what type of car you are looking for. Then, you shell out a couple hundred bucks, and they go shopping for you. Apparently, they are supposed to negotiate the best deal possible for you to get the new car. According to the article, some companies can negotiate prices close to invoice. However, sometimes the price they give you isn’t the “out-the-door” price.

Some car-buying services give you a price that’s close to invoice, but neglect to tell you of added dealer fees and other costs that suddenly appear when you go to pick up the car and sign the paperwork, he says.

“That good deal you thought you were getting is not such a good deal anymore,” Shebesta says.

The article advises you to get a copy of the buyer’s order before you go into the dealership to pick up the car. Also, it’s important to remember that you won’t get as good of a deal from these services if you’re looking for one of the more popular cars.

Car-buying services have their own pricing structures when negotiating deals. “Our pricing structure is to negotiate 1 percent over invoice for cars, but 3 percent over invoice for high-line vehicles like Lexus, Mercedes and BMW,” says Oxsalida.

However, some cars may not be included in these guidelines. “There are also vehicles that are excluded from our program based on supply and demand,” Oxsalida says. “For example, a new model coming out that already has a waiting list would be excluded.”

Also, the article points out that these services are not for everyone. You might do better on your own. But, make sure you go into the dealership equipped with your most powerful tool: knowledge of the vehicle.

Shoppers who go it alone are likely to have better luck if they first research the cars in which they are interested. “To learn about car values, research car sites on the Internet,” Fix says. “Know the cost of any extra features for the model you’re looking for.”

Have you used one of these services to buy a car? How was your experience? Did you feel like you saved a bunch of money? Write a comment below and share your experience if you’ve used one of these services. Please research these companies before you use them, because I can foresee there being a lot of scammers out there just looking for you to shell over your money while they don’t do jack squat to help you find a deal.

  • Chief Family Officer

    I just used a car-buying service to buy a new car. We had a very good experience with USAA’s program. I’ve read good things about Costco and AAA’s programs as well. The programs are free, and they’ve taken much of the hassle out of negotiating. As I wrote a few weeks ago, the USAA price was much better than what I initially thought was a fair price based on research. I can’t imagine paying a service, but I’ll definitely use USAA (or Costco or AAA) the next time I buy a car.

    • Doc

      I appreciate that you say paying for a service to help you negotiate would probably not appeal to you. It might seem ‘hoaky’ to pay a service to negotiate for you because you don’t know if you could trust that company with your money, probably your credit card info, and not to mention some of your personal info.

      With that said – I checked out the USAA car buying service site. I just bought a 2010 Jeep Patriot with options stickered for $21,450 1 month ago. According to the USAA site – they would get me the EXACT same care with options for $19,450.

      So what did I pay? $17,000! (Same rebates, etc.)

      So what I would like to ask you – if I were able to negotiate another $1,450 lower price for you…would be willing to pay me a $500 flat fee to do that? You would still save about $1,000 lower price than the USAA price!!! And you had to do ABSOLUTELY nothing to get that price other than pick the exact car you want, tell me what it is, wait for your price, and go pick it up!

      What if I also told you that I would give you the $500 back if:

      A. You could find a lower price than mine from another dealer outside my network.


      B. If you purchased the car from the dealer who has the lowest price.

      In either scenario – if I gave you a 100% money back guarantee based on either A. or B. above – would you be willing to put down $500 to secure my services to negotiate knowing you would get the money back?

  • John

    Good information, a car buying service does take the hassle out of negotiating. I can end up costing you a couple hundred more than a strong negotiation but who likes all that drama. I have a couple tips on buying cars and selling cars on my site if you would like some more.

    Thanks again.

    I found this fascinating quote today:

    1) Do the salespeople really need to go to the manager for prices, payments, and discounts?ON THE LOT with JOHN RYAN, The most FAQ I have been asked by friends and family about car and truck sales | Buying or Selling cars for profit, Oct 2009

    You should read the whole article.

  • liz

    I just used AAA buying service to buy a new Subaru in Seaside CA. I had already researched prices at Consumers Union, I got a great price, was in and out with my car in about an hour and a half from start to finish. No haggling, no games!! I’m don’t know if all experiences will be this good, but I’m a believer now.

    • Erik Folgate

      That’s good to hear, Liz! I think it can definitely be a good thing as long as their fee isn’t exorbitant.