Haggle-Free Car Buying

Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Mark Solheim, Senior Editor of Kiplinger's Personal Finance magazine to talk about buying a car. Mark, we know everybody loves to buy a new car; everybody hates to negotiate with a dealer. Mark Solheim: That is right Kevin. In fact, there is a recent survey that shows that two-thirds of people would rather pay a fixed price than have to go through the stress of negotiating with the dealer. Kevin McCormally: I suppose most dealers would be more than happy if people just came in and paid that sticker price. Mark Solheim: Well they sure would, but the same survey shows that the majority of people think that paying sticker is an unfair high price to pay. Kevin McCormally: But you have got a solution for people who do not want to negotiate and do not want pay the sticker price. Mark Solheim: Absolutely, there are buying services that will go to bat for you, go to the dealer and negotiate a price for you. Some are through membership organizations, but there are three that we checked out that are nationwide. Kevin McCormally: You have checked these out, and done a test? Mark Solheim: Yes we shopped for Toyota Rav4, SUV and a couple of services we checked out negotiate in advance with the dealer. One of them is CarsDirect.com and another is DriveOne.com which is a service of Capital One Auto Finance. Kevin McCormally: Now when you say they negotiate in advance what does that mean? Mark Solheim: It means that they agree with dealers or dealers agree with them to give consumers fixed price on the cars. Kevin McCormally: Below the sticker price? Mark Solheim: It is below the sticker price. Kevin McCormally: Okay, what other services are out there? Mark Solheim: Well besides those two, one that we -- especially like, in fact, we have teamed with them over the years is CarBargains.com which is a service of the nonprofit Consumers' CHECKBOOK organization. Kevin McCormally: How does it work? Mark Solheim: It works a little bit differently, it shops five dealers in your area, you tell them what car you want, and they go out and solicit bids from these dealers. Kevin McCormally: Okay, when you did this test with the RAV4, who got the best price for it? Mark Solheim: CarBargains came out ahead; in fact, $1,000 ahead of the nearest competitor. Kevin McCormally: Is that possible? Mark Solheim: Well the way it works is that they go to the dealers and ask them to compete for your business and that competition drives down the price. Kevin McCormally: And how much do you have to pay for CarBargains service? Mark Solheim: There might be others that are free, CarBargains cost $190, but in all of our tests with CarBargains you more than get that money back. Kevin McCormally: Thank you very much Mark.