Buying a New Car, Part II

The other day I wrote about our decision to buy a new car. I also provided a roadmap for how we’re doing it. We’re in the market for a 2005 Honda CR-V LX with two-wheel drive and, as of that writing, we had come oh so close to finding the deal that we wanted. The sticking point was a previously undisclosed ‘processing fee’ of $299, which took the deal from really good to simply average.

What was particularly frustrating about this fee was that we’ve gone out of our way to give this guy our business. We had a really good buying experience with him the last time around, and we therefore centered our whole shopping strategy around giving him every opportunity to earn our business. And then he pulls something stupid like this. We were, of course, pretty pissed off when we caught wind of this fee, and we e-mailed him to (politely) let him know how we felt. His initial response was that all local Honda dealers charge this fee. That’s actually true, but we had asked for an itemized quote including all applicable charges, and he had never mentioned anything about this fee. When I laid this all out for him, he responded that he didn’t want to lose a customer over a ‘misunderstanding’ about hidden fees, and he agreed to sell it to us for the agreed upon price, with no additional fees.

All in all, we’re pretty happy with our deal. We’re getting the car for $125 over invoice/destination. While I realize that the invoice price generally overstates the dealer’s true cost due to things like dealer holdbacks and other possible incentives, we’re confident that we found the bottom of the market in our area. In fact, when I shopped this price to one of the other dealerships in our area, they not only stated that they couldn’t match it, but they further suggested that we pull the trigger before the dealership that offered it to us changed their mind. Yes, I’m sure the dealer is making some money on this, but I’m not averse to a win/win deal.

So what’s next? Well, we now have the out-the-door price (including tax, title and license) in writing and we’ve made a $500 credit card deposit to hold the car. We also have the VIN of the vehicle that we’re purchasing, although we haven’t laid eyes on it yet — it’s currently en route from Maryland. The deal is, of course, contingent on our inspection of the car and a final test drive, and the deposit is fully refundable. In fact, since the vehicle is due in so soon, they’re not even going to run our credit card for the deposit.

Now I just need to get our Driver’s Edge reward credits straightened out, as we’ll be cashing them in as soon as we sign on the dotted line.

Read Part I of “Buying a New Car”
You’re reading Part II of “Buying a New Car”
Read Part III of “Buying a New Car”
Read Part IV of “Buying a New Car”

9 Responses to “Buying a New Car, Part II”

  1. Anonymous

    oh okay just wanted to share. i figure you probably test drove it plenty and know about the car plenty, seeing as how you approach the buying so well.

    but I do like the extra room. i’ve used it to help moved lots of friend’s room. pretty darn handy.

    and yeah the mpg on these honda is wild. they’re just pumping more power, but still giving you more mpg, while retaining ULEV, or LEV

  2. Cap, thanks for taking the time to share your thoughts. No, we haven’t signed for it yet. And yes, I’ve driven it a good bit. While the ride is definitely different, I’m fine with it. Given our family circumstances, we really do need the extra space (and two additional doors) as compared to my current car. But I can’t justify buying a bigger vehicle than the CR-V, as I’ll be driving alone a good bit of the time. The amazing thing to me is that it actually gets better mileage than my current Accord. Yes, new Accords are better still, but it does pretty well for what it is. By the way, I read somewhere (maybe it was on that the lower power rating on the ’06 are due to a different way of measuring it, as opposed to less actual power. But I can’t vouch for that.

  3. Anonymous

    huh weird.

    I didnt realize the 06 model has less power output.

    so there is a difference.. but I guess not necessary a good one. The 06 has 156 HP @ 5900 rpm and 160 lb.ft of torque at 3600 rpm

    while the 05 (same 2.4 liter in-line four engine here) has 160 hp @ 6000 rpm and 162 lb.ft of torque at 3600 rpm.

    I wonder what they changed.. because the EPA MPG is the same 23 city 29 highway..


    anyway, I know you guys are going to sign for it soon (if not already).. so I hope I didnt come across as being nosy.

  4. Anonymous

    um I know its a bit late to chime in here..

    and I’m not flaming your decision what-so-ever, but have you test drive the CRV plenty?

    Because its a heck of a lot different ride compare to the 91 Accord.. and althoughthe 91 Accord is a bit “old”, its handling (along with the 94-97) is quite different than a CRV. I know you can’t compare a sub mid-size sedan with a small SUV (even if its on a car platform) but the only reason why I caution you is because I’ve drive the CRV plenty, and it’s a rather bumpy ride for long commutes.

    For long drives I much prefer an Accord of any year (91-93, 94-97, 98-02, 03-06) compare with a CRV. I’ve driven plenty of Honda so I can compare and contrast a bit.

    The current generation Accord shares the same engine as the CRV in certain models, though the suspension system makeup is quite different (although IMO current gen Accords arent as well as some of the old ones in terms of handling).

    Anyway, all of this depends on what you’re looking for in a car.. so yeah if a CRV is what you guys are looking for, go for it. The fold-out picnic table is still pretty neat, IMO. There’s definitely a good size of space for a compact SUV such as it. It gives reasonable MPG for its size, and enough power with its 2.4 ivtec 160hp.

    Most of the beef though, are with its stiff uncomfy chair and ride quality. In my opinion (and a lot of other owners).. it can be much better. I think a lot of people made the mistake of buying it as a commuter.

    You can get a great comparison by test driving the Honda Pilot. I know that’s a much more expensive (and bigger) SUV… but its also on a completely diffrent platform (its on the same one as the Acura MDX). The comparison in the handling and ride characteristic of the Pilot can give some clue on some aspect where the CRV can improve on.

    But yeah just my opinion. I know you’ve gone through a lot of the process already, and it looks like you’ve covered many of the financial angle.. but I thought I’ll share my opinion on the CRV.

  5. Anonymous

    When we bought our Buick Rendezvous 3 years ago, the salesman told me that the $500 dealer-prep charge wasn’t for rust-proofing. He told me it covered “anything that might happen to my paint.” There was no contract to fill out so I knew the guy was lying to me. So, I told him that we didn’t want to pay it.

    I would have told the guy to take his processing fee and shove it somewhere and walked out. People should not be allowed to treat people like that. You know that that $299 was PURE profit for them. And dealerships wonder why people don’t like them.

  6. Anonymous

    Good post. I recently went through this process and had the dealer do an itemized quote. Of course, when we went to sign there was another “processing fee” on the line and I said that I was not paying it. I gave them a choice, and of course they removed it. The point is that a car salesman more often than not are able to add these fees in so they will try everytime. All it takes is to say no and threaten to walk and they remove it. The key is education on the process. One site I really like for this type of information is (I am not related to this site in any manner – I just like it!):

  7. Anonymous

    Few comments:

    1. Congrats! 😉

    2. The same happened to me with an “advertising fee” they tried to add on. I said “no way” and they waved it.

    3. The dealer holdback is $300 to $500 based on my experience. Hence, they probably made $425 to $625 on you. Not bad.

  8. Anonymous

    Congratulations on your new car purchase.

    Something that you might feel worth writing about was in the latest issue of Consumer Reports, warning people for the next year to be careful about buying used cars. Cars that were declared “totaled” by the insurance companies after having been involved in the floods and then sold at auction might show up all over the country and sold as though they were not totaled after Katrina. They give warning signs to look for and state to make sure to get a carfax report.

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