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Warning, this is long and detailed!
 After several maintenance items that I'd been putting off on my Accord, it started burning oil like crazy (1 quart
per 1,000 miles). I was concerned that I was losing a piston ring (common with the F23A1 engine in my generation
Accord). Even if that wasn't the problem, I was looking at a minimum of $2,000 to keep the Accord running
properly, without having to worry about possible engine rebuilds or replacements. The trade-in value was a mere
$3K while the private party was probably $4.5K, meaning I would have to spend half the value of the car just to
keep it at it's mediocre condition.
I decided to finally look seriously at the Subaru Forester XT (FXT), which I had been eyeing for a couple years.
Subaru of Schaumburg had a used 2005 FXT so I went to look at it, vowing not to buy anything yet as I hadn't
prepared my finances. The two year old car already had 55K miles on it and unfortunately was an automatic. On
top of the that, the dealer was selling it for $18K, which would be fine if it had a normal amount of miles on it
(30-40K) but not 55K. When I suggested that I would be interested in a new one, the salesman, Viktor, quickly
started working the numbers. There were two main negotiation points that I had. 1) I was not ready to buy, even
though I could afford it and 2) they did not have the model I wanted.
 The first can help because you can walk away any time. If they know you need a car today, then you may have to
give something up on the negotiation, especially if you've already invested a good amount of time with them and
closing time is approaching. You've put yourself up against a wall so try to avoid this. It's also important
that you already know what you can and can't afford so you're not making dumb decisions. Of course, playing
hardball is also an option if you say, "I'm ready to buy today if the price is right." They want your money and
money talks. But again, this works better if you don't need the car and can walk away (or they don't know you
need it).
The second point helps for a similar reason. The dealer wants to sell you a car and get your money today, even if
they don't have the car you want. If they try to charge you more for a special order, just walk away and go to
another dealer (unless they run after you and fix the problem). And of course, if you know you want a certain
model or color, don't compromise because you have to live with that car for the next few years. Again, you can
play hardball, but I'm personally not that aggressive so I've found that hesitation will help them to sweeten the
deal to get you to play.
 So Viktor told me the sticker price for a regular Forester XT Sport with 5-speed Manual: $25,995 MSRP + $625
Destination = $26,620. Subaru had their All-Wheel-Deal which was $1,000 cash back, bringing the price down to
$25,620. He asked what he had to do to sell the car. Now I didn't do any research on the 07 model so I
completely guessed that the MSRP markup was about $2,000 so I asked for $24,000. He laughed saying that Subaru
doesn't have such large markups and asked me where I got that number. I told him I made it up (which I did) so he
went to talk to the manager and they came back with $24,800.
I told him that sounded pretty good but asked about my trade-in. He asked what I wanted and I said $3,000. He
checked on that and said it would be fine and asked if I was ready to buy. I wasn't so he went to see the manager
again and came back with $24,500. Then he asked me to sign a piece of paper with the price, but since I wasn't
ready to buy, I didn't want to sign it. I then told him how I had just spent 100 for a new tire on the Accord so
he changed the price to $24,400. I asked for some time and pulled out my loptop to see what I could afford. I
knew I could afford it, but mentally, I just wasn't prepared to buy a new car since I had vowed not to buy
anything. So Viktor went to the manager again and came back with $24,200. I thought that sounded pretty good so
I signed the paper.
 So how good a deal is that? Well, the invoice price is $24,380 + $625 Destination = $25,005. So was I getting
$800 below invoice? From my point of view, yes. From the dealer point of view, no. The dealer was selling me
the car at $25,200 so they were getting $195 over invoice, which is generally considered a "fair" profit for the
dealer (they don't actually pay invoice due to wholesale pricing from the manufacturer and other deals). The
other $1,000 comes from Subaru, for a net of $24,200 (you will see all these numbers below). So this deal was
fair to everyone. But the story's not over yet.
So then I was transfered to the financing guy where they calculate tax, title, license, paperwork fees, financing
and warranty. As a reminder, don't buy a car in the City of Chicago b/c the tax rate is 8% instead of 7%. Now,
there were a few more bumps here. First, the car I wanted wasn't available so I would have to wait for it. But
for some reason they really wanted my Accord so they offered me a loaner car if I would go get the title that
night. The second bump was that I hadn't prepared my financing and had no way to pay for my 2,200 down payment.
So they waived their $1,000 limit and took my Chase Subaru MasterCard. I also had $600 in Subaru Bucks (earned
from that same Subaru Card).
 Finally, it was time to talk financing. Based on my credit, he quoted me a 6.15% interest rate. I don't know if
this is a Subaru thing only, but once again, they offered me a lower interest rate, 4.9% if I purchased an
extended warranty (I haven't experienced this at non-Subaru dealers). Over the life of the loan, the lower
interest rate would almost cover the cost so I went ahead and got a 6 year warranty. They asked for three color
preferences, but I told them I only wanted Obsidian Black Pearl and would wait until they found it. I signed the
pile of papers and then went home to unload all the junk in my trunk (har, har) and pick up the Subaru Bucks and
Title.
It's amazing the things you find in your old car when you're really cleaning it out... I had to get everything
out: papers, maps, CDs, garage opener, iPass, sunglasses, jumper cables, subwoofers, amplifier, etc. I also
replaced the spare tire (which was in my garbage because it had gone flat and failed). Unfortunately I did not
have time to remove the amplifier power cable or the Sony 10 CD changer. I also didn't have time to remove some
of the simpler bolt-ons that I could have sold on eBay (Tenzo R strut bar, DC Sports short shift adapter, Momo
shift pedals) but oh well. I returned the now empty car to the dealer and picked up my loaner 07 Forester X.
8 days later, I received a call that my FXT had arrived. I went to pick it up and as promised, the dealer re-did
all the paperwork with the VIN and honored their price of $25,200 plus $1,000 Subaru cash (applied toward the
downpayment). Then I found out that I didn't get the car I ordered. Well, the car itself was right, except that
it had almost $500 in options. However, they honored their quoted price so I got those options for free, putting
my final standing at about $1,300 below invoice. Not too shabby.
So here are my numbers:
Price Summary
| |
|
Invoice |
|
MSRP |
| Car Price |
|
24,380.00 |
|
25,995.00 |
| Destination |
+ |
625.00 |
|
625.00 |
| Compass Mirror |
+ |
183.00 |
|
183.00 |
| Popular Equip |
+ |
302.00 |
|
302.00 |
|
| Total Price |
|
25,490.00 |
|
27,105.00 |
| My Price |
|
25,200.00 |
| My Savings |
|
290.00 |
|
1,905.00 |
|
Out-The-Door / Financing Summary
| My Price |
|
25,200.00 |
| Doc Fees |
+ |
58.48 |
| Trade-in |
- |
3,000.00 |
|
| Net Price (for taxes) |
|
22,258.48 |
| State Tax (7%) |
+ |
1,558.09 |
| County Tax |
+ |
181.94 |
| License & Title |
+ |
143.00 |
| Extended Warranty |
+ |
1,500.00 |
| All-Wheel Deal Cash |
- |
1,000.00 |
| Subaru Bucks |
- |
600.00 |
| Down Payment |
- |
2,200.00 |
|
| Amount Financed @ 4.9% |
|
21,841.51 |
| Cook County Sales Tax (1%)* |
|
$222.58 |
|
* Cook County tracked me down several months later for this.
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