Price negotiation tips for when you go to the dealership

Consumer Report car tester Mike Quincy.

Tess Vigeland: Maybe John should've called up our next guest before his veggie experiment.

Mike Quincy knows a whole lot about cars. He's an automotive specialist with Consumer Reports, one of the guys who gets to test drive cars for a living. So we thought he might have some secrets to getting through that awful process at the dealership.

Mike Quincy: I think that the best thing that consumers can do is to find out exactly how much the dealer paid for the car. So, in other words, when you see a newspaper advertisement or you hear a radio commercial of this really smooth come-on, you know, "Come to the dealer and you're going to get below invoice." Well, they probably can sell below invoice, because the dealers are getting holdbacks and money back from the factory. So that's kind of the cushion or the unknown amount that's more negotiating room. And that's actually where you start the bargaining. You start the bargaining from the dealer's cost up, instead of the sticker price down. Their profit margin, actually, on a new car sale is very small. They make a lot more money on used car sales, finance and insurance, parts, service and what not.

Vigeland: If you are in the market for a new car this year, give me some of the best new cars out there and why.

Quincy: Some of the cars that we like when you're on a budget include the Honda Fit and also the Hyundai Elantra overall. And the Elantra does it without a hybrid system, without a turbo. Good reliability, it's a great car on a budget, about $19,000 for a nicely equipped model.

Vigeland: OK. Let's get to the bad news. What are your not-so-awesome picks? Stay away from this car!

Quincy: Going from the best and the brightest to just the downright gnarly. The question that we get often is "what's the worst car you've tested?" And that award, if you want to call it that, goes to the Jeep Wrangler.

Vigeland: Uh-oh.

Quincy: Now, the Jeep Wrangler is cool. What you take it off-road, the Wrangler is unstoppable. But for you and me, the commute to work, that's where the Wrangler goes bad. 'Cause the Wrangler is noisy, it has a rough ride, it has sloppy handling, the brakes aren't so hot, the fuel economy is terrible. It's hard to get in and out of. As a day-to-day car, it requires it's owners and drivers to make a lot of compromises.

Vigeland: So let me ask you, in this era of high gas prices, what is the best way to save yourself a little bit of money on gas?

Quincy: First thing, keep your tires at the right pressure. Second suggestion: Open up your trunk and take out all the junk you don't need.

Vigeland laughs

Vigeland: I don't have anything in my trunk. I don't have any junk in my trunk.

Quincy: You've gotta take the junk in your trunk!

Vigeland: I think one of the overall questions that we want to get at is why are cars such a thing?

Quincy: Wow. Cars are expressions of people's wealth. They're expressions of their own eccentricity. So why is the United States so car crazy? Because the cars are not an appliance. They're such an extension of yourself and your personality and what you stand for. And it could be a sports car, because you like speed. It could be a hybrid, because you want to be green. This country is all about cars for better or for worse.

Boy, being in L.A., this is car country. I see more cool cars per square inch in L.A. than anywhere I've ever been. I love cars and I caught the bug, whatever it is.

Vigeland: Alright, Mike Quincy of Consumer Reports. Thanks so much.

Quincy: Thanks for having me on.

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