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The Honolulu Advertiser
Posted on: Thursday, July 13, 2006

AKAMAI MONEY
Special-order cars see few deals

By Greg Wiles
Advertiser Columnist

Q. Is it better (less expensive) to order a new 2007 car that will be delivered at a later date rather than one that is sitting on the lot already? A friend of mine ordered a new PT Cruiser rather than purchase one of the few on the lot and saved a lot of money, although she had to wait some months for delivery.

A. Your friend was probably the exception to what usually is the rule, according to experts.

They said special ordering a car generally will cost more because dealerships are less inclined to cut deals on them.

"Technically they should be the same price," said David Thomas, a writer for vehicle sales and research site Cars.com. "In reality, almost every time the one on the lot is the one you'd get any kind of play on from the dealer."

One reason for this is the costs dealers incur by keeping cars on the lot. There is an incentive for them to sell what's on hand as quickly as possible, even if they have to give a little discount off the sticker price.

"They've already made the financial investment to have the car on the lot," said Phillip Reed, an Edmunds.com editor who once explored dealership practices by working as a car salesman.

"Moving metal that's right in front of them is their top priority."

When it comes to special orders, dealerships know they have you because you've come in with a specific, one-of-a-kind car, Reed said. There isn't as much risk that you'll walk off the lot to a competing car dealership.

Moreover, some dealerships will tell people they only accept the manufacturer's suggested retail price, or sticker price, on special orders, Reed said.

"Ordering is probably for people that want very specific cars," Thomas said. "If you want the brand-new, baddest-of-the-bad black car with sunroof, go in and special order it."

But "you're probably not going to save anything." Also, if the car is a popular model, there probably is less leeway for negotiating.

Experts agree that whether special ordering or buying off the lot, the way to get a fair price is to do homework on car prices and the sales process.

That includes knowing the difference between MSRP and the dealer's invoice price, available rebates and incentives, financing rates and how much your trade-in is worth.

For example, if a dealership is overstocked with a model you want, you may have more negotiating leeway. Ford, Chevrolet and other U.S. car makers' Web sites allow you to see inventory for specific types of cars at local dealerships.

There's a wealth of other consumer information on buying cars at Internet sites such as Edmunds.com, Intelli choice.com and Cars.com, which is partially owned by Gannett Co., owner of The Honolulu Advertiser. Some of the sites include information on typical invoice prices that shoppers can use in negotiations.

A few hours of homework and going to several dealerships to request the best price they can offer can potentially save you hundreds of dollars or more over what you might have negotiated without studying.

Reed said information on the Web has helped consumers get better deals, compared with just six years ago when he wrote "Confessions of a Car Salesman," a series of articles about the then hard-driving sales practices at dealerships.

"The key is to find a dealership that will really work with you and make sure you are really getting a good deal," Reed said.

Got a question?

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com