As you all know, Girl Ninja and I have been hunting for a used Pilot, Highlander, or MDX for the last two weeks pretty intensely. We were hoping to find a sweet ride on Craigslist since we know that is where both the seller and buyer can get the most bang for their buck. Unfortunately, CL inventory on specific models of cars, within specific price points, with specific parameters on miles and years, is pretty limited. We’ve only gone out and test drove one vehicle from CL and we weren’t impressed.
My daily routine hunting for cars looks like this. Check Craigslist. Check the local car dealerships used inventory. And check a few Auto Brokers websites. Yesterday, we finally found a car that we felt like was priced fairly. Well, sort of.
The local Honda dealership has a 2006 Honda Pilot EXL with 69,000 miles priced at $20,000. I ran the Blue Book retail value on the car with the specs/upgrades the dealership listed and was given a $20,200 value. Some people are stupid and would think the dealership is offering a great deal since it is $200 less than blue book retail value. That couldn’t be further from the truth.
I ran the “trade in value” on the Pilot and saw that one should expect to receive about $15,500 for it from a dealership. That is the price I am assuming the dealership paid for the vehicle. So although their “below blue book” ad might trick some, we all know a $20,000 sale price brings them a healthy profit.
I told them, on the phone, I wanted the car for $18,000. After about 20 minutes, they called me back and said $18,500, but if I came on the lot the manager might be able to go lower. The price drop was close enough to humor me, so after work Girl Ninja and I headed to the dealership, checked out the car, gave it a test drove, and decided we liked it.
After a solid hour of back and forth negotiating the sales rep and his manager only came down $250 more dollars to a sale price of $18,250. Knowing they paid $15,500 for it, and that its private party value is $17,800, I really wanted to get it for $18,000. Not because that would have been a GREAT deal, but it would have been a FAIR deal, for both me and the dealer.
Unfortunately, they didn’t budge. Girl Ninja and I walked out of the dealership hoping they would pull us back in and accept our $18,000 offer. No such luck, they let us walk out.
After talking things over and doing some more research tonight, GN and I decided we are willing to pay $18,250 for it, but not without one last attempt to negotiate the price.
Here is my plan this morning.
I will go in to the dealership and accept their $18,250 sale price. As they are drafting up the contract and paperwork, they will inevitably ask me how I will be paying for the vehicle. That’s when I will whip out my secret weapon…my credit card.
The look on their face when I do this will be priceless as this will definitely be their least preferred payment method. Visa will charge the dealership a 2%-3% merchant fee on the transaction, costing the dealership at least $360. They will likely tell me that there is either a limit to the amount I can charge to the card (like $2,000),that they wont allow me to use the card at all, or that they will charge me a 2% fee for using the card.
That’s when I will whip out the VISA merchant agreement that says a merchant must….
Accept all types of valid Visa cards . Although Visa card acceptance rules may vary based on country specific requirements or local regulations, to offer the broadest possible range of payment options to cardholder customers, most merchants choose to accept all categories of Visa debit, credit, and prepaid cards .* (this dealership has VISA listed as a method of payment option).
Always treat Visa transactions like any other transaction . You must not impose any surcharge** on a Visa transaction
The threat of reporting them to VISA for violating their merchant agreement will prevent them from charging me more for using my card. I will then re-offer my original deal saying, “Look instead of taking my card and paying a $360 merchant fee, drop the price another $250 and let me pay cash so we can be done with this deal.” In a perfect world, they accept my cash offer. The next best scenario is they allow me to just use my CC for the purchase, thus earning me a crapload of frequent flier miles.
The worst case scenario, and the one that will likely transpire, is they say no to the deal. Since paperwork is not typically signed until payment method is discussed, they could just scrap the whole deal and refuse to sell me the car at the negotiated price. If this happens, they will get their $18,250 cash price as we still think the car is worth it. I wouldn’t be a personal finance ninja though if I didn’t pull out every last trick in an attempt to get the best deal possible, right? Wish me luck!