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Comment by Xcelerate | Hacker News Reader

I bought a new car last year, and the way I did it was to locate the car I wanted at all dealerships within 300 miles. I then emailed each dealership and asked for the lowest price that they could sell the car for. Then I passed the lowest number to the other dealerships, who counter offered. I iterated this process until no dealership would go any lower, and then I drove to the one with the best deal and picked up the car.

It brought the price a few thousand lower than the supposed "invoice minus holdback minus whatever", but I suppose they wouldn't have sold the car unless they made some profit on it.

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The person actually selling you the car makes a surprising difference. A friend who worked at a Ford dealership for awhile told me to always go straight to Internet / fleet sales.

Reason? Those agents are comp'd based on volume over minimum, not on margin (or how the lot salespeople are measured).

End result? If he or she can sell you a car in 5 minutes for over the minimum, they'll happily do so and then chase the next sale.

Sometimes you can take a loss on the car, but make a profit on the sale: https://www.thisamericanlife.org/513/129-cars

If you're interested in how dealerships actually work (and how perverse and stressful the incentive structure can be), I highly recommend listening to the above podcast. It was fascinating.

One example: sometimes dealerships are selling you a vehicle at a loss, in hopes they'll hit the next volume tier, earning enough manufacturer rebates to make a net profit on the deal. And they have to cut their prices that low if they're in a competitive market.

Which turns the entire endeavor into a monthly game of musical chairs. "And 3rd place? Third place is you're fired."

Just a heads up, the lowest email/phone price is often higher than the lowest in-person price, for this very reason.

How did you initially identify at scale if the dealerships had the particular make of the car you wanted? By simply searching their website?

I have never bought a new car, but I suppose if I did, this would be a good strategy. I mean it's a lot of effort, but when you talk about something that expensive that you're going to keep for 5 ~ 10 years at least, it makes sense to put in that effort.

It’s a few hours over 1-2 days - not that much effort to save a few thousand dollars.

That’s the method described in the end of the article.

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