Editor’s note.
It dawned on me that the casual reader might think that all I do is think about money. Well, this is, among other things, a financial planning newsletter. My main philosophy regarding money is something the casual reader might not understand. Money by itself is of no value. Money, as you age has a rapidly declining utility. People can’t enjoy their money in several different areas as much at 70 as they can at thirty.
Money is good for just one thing. You can trade it for stuff. By “you” I mean you, your family, and friends who might represent organizations you support.
One of my primary life philosophies is to optimize for personal enjoyment and while doing that create memory dividends. That can be done by taking a safari to Kenya (which we just completed) or taking your grandchild to the park for a ride on the swings. It’s whatever makes you happy. Sometimes those things cost money and sometimes they are 100% free. Maybe just looking at your investment account summaries online makes you happy. If so, please don’t be offended if I label you as one sick puppy.
I spend very little time thinking about money. Why? I have set up templates from my various financial strategies. Those templates and strategies cover things like Interest-only mortgages, solar panels, credit card arbitrage, new car buying, and the like.
Today I’m going to talk about Randy’s New Car Buying Method. On average, we only buy a new car every 3-5 years. I first came up with my method more than 20 years ago. Each time I use Randy’s New Car Buying Method it only requires a minor update or two. Then I never think about it again until I need to buy another new car.
This is how it works with all of my financial strategies. With everything in place, I have plenty of time to take the money that all of these strategies return to me, actually millions of dollars over a lifetime, and make my spending plans. To the best of my ability, I take these monies and go about optimizing for personal enjoyment and creating memory dividends. I just wanted to clear up any misconceptions about how much time I actually think about money. I pretty much only think about how to trade my money for stuff.
This is the main event!
Today, I will share my famous “Randy’s New Car Buying Method.” This is the updated 2024 version. This is not a theoretical approach. This is an approach you can use this afternoon and be driving a new car at a great price tonight. The method has worked for me, my family, and lots of others…many times over. This is a tried and true idea.
Is it that time of the year for Randy’s New Car Buying Method?
Not really. But we were dealing with unusual circumstances.
If you need a new car, there is one day and one day only that is the very BEST time to buy that car. Is it January 23 or August 1 or November 17? It is not. However, my birthday is January 23 so if you want to make a mental note of that please do. The best time to buy a new car is on New Year’s Eve, December 31.
Why is that? December 31 is “triple witching” day in the car business. No other day qualifies for triple witching. December 31 is the last day of the month, the last day of the quarter, and the last day of the year.
The 2024 update.
This is my 2024 update to Randy‘s New Car Buying Method. I’ve heard some people say that due to the COVID-19 impact on automobile supplies, my method is no longer state of the art. Nothing could be further from the truth.
I love it when people tell me that I can’t do things that I just finished doing or that I’m doing. That is the case with Randy’s New Car Buying Method.
We’re gonna go through each of the major steps in implementing my strategy. To be clear, this is for people who want to optimize their new car buying experience and create as much value as humanly possible.
Pick your car.
That’s right let’s start with the basics. You need to decide exactly what type of car you want to buy from a new car dealer. What color? What options? What are some of the ways that you can do that? When you see your neighbor pull into her driveway with a new car ask her how she likes it. Go to a new car show. They have them in all the major cities. Do your research. Take a test drive. Rent the car you’re considering to get an idea if you like the car.
When do you want to buy that new car?
That depends on whether you want to maximize optimization. If you do then you’re gonna want to buy your car on December 31. If you’re lazy, or impatient or you have big plans for New Year’s Eve, you can buy the car at a different time. You just won’t optimize. Lots of people don’t optimize. That’s OK. You’ll live another day if you don’t buy your car on December 31.
In the example I’m going to share with you today I didn’t buy my car at the end of the year. I know. I bet you never thought you would hear that from me. I have bought about 10 cars using my method for my family and me. I have counseled others tens of times with my method. I’ve always bought them at the end of the year, but not this time.
Carol needed a new car now. Her Lexus was totaled in what amounted to a fender bender. She was fine. The idiot who hit her should have avoided contact. We could have waited to replace her car until the end of the year. In this case, that didn’t make good sense.
The best I could do was to buy the car at the end of the month. That would not be as good as buying the car on December 31. I figured buying two months before the end of the year would cost us $1,000-$1,500.
Buying now seemed like the best choice of several options.
We could have rented a car for a couple of months. That would have cost us about $2,000. We could have tried to operate as a one-car family. My travel schedule and Carol’s constant running here and there would have made having only one car for two months too much of a hassle.
I knew I wouldn’t get as good a deal on October 31 as I would on December 31. I doubted that waiting could recover the expense of a $2,000 rental car expense. We would buy our car at the end of the month, October 31. To be clear if you want the very best price I strongly recommend buying your car on December 31.
We were going after a 2025 Toyota Camry hybrid.
We decided that the new Toyota Camry hybrid would be the car for Carol. This is the first year the Camry is a 100% hybrid. The Camry is not a plug-in hybrid but a hybrid just the same.
I’ve rented the 2025 Toyota Camry several times already this year. I’ve driven the Camry Hybrid 15,000 miles or more. In the rental car business, the Camry is considered a full-sized car. In the general automotive world, the Camry is thought to be a mid-sized sedan. The “sedan” is a dying breed. In 2025 General Motors or Ford will not offer any sedans.
Carol had ridden in the Toyota Camry several times with me this year. I wanted her to buy whatever car she wanted. It was going to be her car and her choice. I did recommend she consider the Tesla Model Y SUV. That’s a great car at a great price right now. She’s not into fully electric cars. She decided the Toyota Camry would be just right for her. The decision was made. In our house when Carol makes a decision I support her 100%. Now I would use Randy’s New Car Buying Method to get her what she wanted.
I knew we would get an outstanding deal. If you use Randy’s New Car Buying Method the right way it is impossible not to get the best deal available at the time you decide to buy a new car.
I wanted to clarify one point. It didn’t matter to me if we got a $1,000 advantage or a $3,000 advantage or whatever.
To me all of this is a game. I love doing this. I think I play the game well. We would “win” but the money we saved was not the prize. Winning the “game” was the prize. If you use Randy’s New Car Buying Method and money is important to you will win. If you just like playing the game then you will win.
Where would we buy the car?
I had no earthly idea! We would buy the car somewhere in Southern California but that was as much as I knew. I remember how my parents used to buy a new car.
They had a friend named Ralph at the local Ford dealer. When the new models came in, they would call Ralph and say, “When a white one comes in give us a call”. I’m sure there was very little negotiation that went on with those deals. I suspect that “Ralph” did very well. I know my parents didn’t get the best deal. But it was convenient for them. All they had to do was wait for Ralph to call and tell them the “white one” was now on the lot. I don’t operate that way.
Nothing less than the best for Carol. She does the chores.
We were now in the market for a new car. Carol told me that any old used car would work for her. Sorry. She didn’t marry that kind of guy.
Long ago I discovered that money is for spending. I want to optimize for personal enjoyment. Money helps me do that. The money itself is of no value until I can trade it, in this case, for a new car. Getting Carol a new car provided personal enjoyment for me.
I told her I wouldn’t hear of the idea of her having to live with a used car. She was going to get a new car or no car. Given that ultimatum, she reluctantly accepted my new car offer.
We live about an hour south of Los Angeles and an hour north of San Diego at the beach. Southern California is a big place. There are lots of car dealers in Southern California. Many of them are Toyota dealerships.
Finalize the details of the car you want.
The Toyota Camry comes in four different trims. They have sort of a basic sport model and an advanced sport model. They have a standard sedan and a luxury sedan. Carol was coming from a Lexus RX 350. The luxury sedan would be the car for her. In the Toyota Camry line that is the XLE.
This new car, like all other Camrys, is a full hybrid model. It is not a plug-in hybrid. The car has a battery and a gasoline engine. The battery is continuously charging. The Camry gets 50 miles per gallon. The car is long, low, and sleek.
What’s the next step? Decide on the particulars of the car you want. What trim? What exterior and interior colors do you want? What options are must-haves and like-to-haves? Put that info into your broadcast letter.
Check out a source like Edmunds.com to find out the invoice costs of the car and the options you want. This stuff isn’t all that easy to get but if you work at it you’ll find what you need. The dealer might say their invoice pricing is confidential. In my experience, most dealers will give you that information if you ask but you won’t have that resource before you send out your broadcast letter.
37! Yep. I was working with 37 new car dealerships on this project.
I decided that I would survey every Toyota dealer within about an hour to an hour and a half of our house. How many dealers is that? 37! Yes, there are 37 Toyota dealers near us. I drafted my broadcast letter. I’ll share that with you in a moment. I copied and pasted my letter into the website contact page of those 37 dealers. That took me about an hour. I was playing the game now.
I was having the time of my life. I was doing this for fun. Over the years I have streamlined the process. It’s easy to implement. Maybe this part of the process would not be fun for you. Again, no harm; no foul. Everyone optimizes for different things in life.
What if you don’t live where you can easily work with 37 new car dealerships?
Let’s say you live out in the country. You don’t have 37 dealers of any make maybe even in your entire state. Let’s say Omaha is the nearest big city to you and it’s two hours away. You’re not gonna be able to contact 37 dealers. I would guess if you have three or four dealers that might be about right in a smaller market.
Here’s what I recommend you do. Send your broadcast letter to all the dealers in Omaha or Des Moines or Cedar Rapids, Iowa or Lincoln, Nebraska or Sioux Falls, South Dakota or Kansas City, Missouri or anywhere else that sells the car you want. Send your letter to anybody who operates a dealership within a few hours of your place.
Then when you get the feedback and decide which dealer is gonna be best for you drive over to Des Moines or wherever and get a hotel for the night. Go out for a nice meal. Enjoy relaxing at the hotel. Bring your swimsuit and sit in the sauna. Then drive over to the dealership the next morning and pick up your car at a great savings.
Ready to go fishing?
It was time to go fishing. I set my trotline. As a kid, I went with my grandfather so many times when we first SET our trotline and then later RAN the trotline. If you don’t know, a trotline is one long fishing line, maybe twenty feet long. Another smaller line is attached to the bigger line at increments of a foot or so. Every small line has a fish hook and bait. You leave the line in the water for a day or two and then come back to see what you’ve caught. My broadcast letter is my trotline.
I sent my broadcast letter to the dealers on October 30 in the morning. This would give them all day to respond to me. I could ask clarifying questions and by the end of the day, I would be prepared to make my dealer selection to pick up the car the next day on October 31.
I’ve been using the same basic broadcast letter and renditions of this letter for about 25 years. This year‘s 2024 Randy’s New Car Buying Method template is the latest version of my communication piece.
Essentially, I simply tell the dealer that I’m a serious buyer. I’m ready to buy the car right now. I want to get a good price with the deal. I tell the dealers that I’m sending my letter out to all of the dealers in the area. The dealer who comes back with the car that I want at the price I need is going to get the business.
Have you ever had multiple goldfish in a small fish bowl? Isn’t it fun to drop some food into the bowl and see the frenzy it creates with your goldfish? The same thing happens when my letter reaches 37 dealers. Can you imagine having 37 goldfish in your fish bowl?
Not all new car sales people seem to read all that well. Some follow directions and some don’t. However, virtually every dealer immediately comes back to me with something. Some ask me to give them a call or give them my phone number so they can call me.
Do NOT give your phone number to anyone during this process. Don’t do it.
I never ever provide a dealer in these circumstances with my phone number. Never ever. If a phone number is absolutely required on the dealer website I simply enter 555–555–5555. They know what that means! I didn’t call a dealer or give them my phone number until I had heard back from everyone. Only when the deal was final did I call the dealer we were going to work with.
I learned that Toyota dealers have a greater inventory of the more basic models the LE and SE. The prices on the four different Camry trims aren’t that much different, maybe $1,500-$2,000. Nevertheless, many buyers want the cheaper model hence the greater supply of the basic models.
The more upscale model that we wanted, the Toyota Camry XLE was in shorter supply. The Camry comes with “packages” of bundled options. I selected the package that we wanted. I was very much surprised that almost no cars came with any of these packages. The “glass roof” aka moonroof aka sunroof was the most expensive option at about $1,300. Carol wanted one of those. Quite a bit of the time the available cars didn’t have all the options I needed. Sometimes they had minor options that we didn’t want.
Exterior colors and interior colors complicate the process. If you decide to go with Randy’s New Car Buying Method I highly recommend you have two or three exterior and interior color selections you are willing to accept. Of course, a basic negotiating strategy is to never let the dealer know that the car they have is exactly the car you want. If you want a black car and they have a black car your best response is this. “I don’t necessarily want a black car but if the price was right maybe we could make that work”.
Know the difference between the MSRP price and the invoice price.
This is important. There are two types of prices offered by new car dealers. First, there is “MSRP”. That stands for manufacturer suggested retail price. Since Covid, dealers want to refer only to the MSRP price. They want to tell you how their (or your) offer price compares to MSRP. During Covid with limited supplies new cars often sold for more than MSRP and at a minimum maybe full MSRP. As an example, a salesperson today might offer a car at $500 under MSRP.
I recommend you strike the term “MSRP“ from your vocabulary. Don’t ever say that word during your car-buying process. Instead, substitute the word “invoice”. You want to buy the car in increments compared to the invoice price. The last time I bought a new car for Carol, her Lexus RX 350. I bought that car for $3,140 under invoice which was about $7,000-$8,000 under MSRP. The dealer is going to want to talk to “MSRP”. You are going to want to talk “invoice”.
Yes, means ask for more.
Here are some interesting stats regarding Carol’s last new car purchase. I got a smoking hot deal on that Lexus RX 350. I bought the car at $3,140 under (aka back of) invoice. I paid $39,959 for the car.
When the car was wrecked the insurance company offered us $21,600. I called them up. When people don’t give me the news I’m expecting I always call ‘em up. I pointed out that we had nearly brand-new Michelin tires on the car. They had listed the car’s condition as average. I told them that 99.9% of the time Carol was the only person in the car. There were no kids, no smoking, and no pets in the car. Based upon that information and that the autobody guy said the car was in excellent condition they increased their offer to $23,200.
Here’s the math on that Lexus RX 350.
Purchase price $39,959
Insurance price $23,200
Net depreciation $16,759
We got a smoking hot deal on both ends of this transaction.
We had that car for almost 11 years. Carol drove it 61,000 miles. After 11 years we “sold” it for 58% of what we paid for it. The car had only depreciated $$1,523 per year!
If I didn’t have much money I would always buy a new car and keep it for ten years or more. That way the depreciation cost would be minimized and somewhat offset by the extra maintenance costs and breakdowns from driving a “beater” for ten years or so.
I find these numbers nearly unbelievable. Lexus cars hold their value very well. If you buy a car right using Randy’s New Car Buying Method and sell it right using Randy’s no means maybe, and maybe means yes method you might achieve results like these.
Think about it this way. The dealer will not sell you a car unless they want to. They get to decide how much money they want to try to make or how much they are willing to lose to make their sales goals and rewards at the end of the month quarter or year.
You are not contacting these people to try to make a new friend. You’ve heard me say I don’t want to be “friends” with people in business. You might come away thinking I don’t want to make friends. Not correct. If you are my friend I will do anything for you.
The product the car people are selling is a commodity. Thirty-seven dealers sell Toyota Camrys within an hour and a half of my house. If I don’t buy it at dealer #1, I’ll buy it at dealer #23 or #37. It doesn’t matter to me.
Just in case you didn’t know this.
This is another important thing to know. Let’s say you buy a car from a dealer that is 50 miles from where you live. It would be rather inconvenient to take your car to that dealer every time you need a service of any kind. You don’t have to.
If you buy a new car from Toyota or any other major manufacturer, you can buy the car anywhere you want. Then you can take your new car for service to the dealer that is closest to where you want to have it serviced. That’s a fact, Jack. We have bought most of our new cars from dealers far from our home and never returned to that selling dealer ever again.
The dealers were beginning to talk to me.
The dealers I surveyed came back to me with all kinds of offers. They were in two general categories of responses. One was about price. The other was about the availability of the model and options that I wanted.
Some people didn’t have any of the XLE models, but they had other options from the three different trims that we were not interested in. Some could get the car in a week. Some had the exterior color I wanted, but not the interior color, and vice versa.
People were all over the board with the price. Some insisted on making their offer relative to MSRP. I quickly got back to those folks and told them that I needed a reference relative to the invoice. Other people got back to me with prices relative to the invoice.
This was our best offer.
The best offer I got was $1,000 under invoice. That price was about $3,400 under MSRP. I thought those were excellent prices. Remember we were only talking about a $35,000 car here.
I wasn’t trying to buy a car at the end of the year. I was trying to buy a car at the end of the month. The model I wanted was possibly the most scarce of any of the Toyota Camry’s four trims available.
Initially, it looked like I would be buying a car at a dealer, which was just about as far away as any I contacted. Then I got a good offer from the dealer that was closest to our house, less than 10 miles away. All things being equal if we could do business with the closer dealer and they had the right price on the right car that would be great.
Let the dealer do the work for you.
The dealer closest to us was willing to sell me the car for $1,000 under invoice. They just didn’t have the car I wanted. They did tell me they would contact some other dealer friends and possibly make a trade. If they could get the color combination I wanted from another dealer, they would still give me my price at $1,000 under invoice.
This dealer also had one of the sport models, the XSE, available. That trim didn’t appeal to us. They offered $1,500 under invoice on that car and I’m pretty sure they would have gone to $2,000 or more under invoice if we were interested. No, price was not our only consideration. We wanted the type of car we wanted and a low price on another model was not going to work.
Speaking of interest, Carol and I had discussed the color and options she wanted in advance. Once that conversation was completed she sent me off into the forest to hunt and gather.
Different ways to skin a cat.
The local dealer found another dealer who had the car we wanted. However, when they contacted that dealer they wouldn’t give up the car for a low price. That deal was dead. I was messaging the salesperson back and forth frequently now. They wanted to make a deal. They just didn’t have the car we wanted.
We were sort of back to square one. The sales rep I was working with asked if I had any ideas. I told her they could give us a loaner car for free and let us drive it until they got the car in their inventory. That might work for us. I am nothing if not helpful, right? They searched around a little bit more and found the car we wanted. We had a deal.
It’s important to note that when a dealer gets a car from another dealer a couple of things might happen. Dealer A might trade cars with Dealer B. Dealer A might pay Dealer B an upcharge for the car they want. Finally, maybe Dealer B owes Dealer A favor and they just work it out.
We would be buying our car at $1,000 under invoice. They would have the car for us ready to pick up the next day October 31. Did I get the absolute best price available? It’s hard to say. I didn’t get any offers better than $1,000 under the invoice. Other dealers offered their cars at MSRP or maybe $500 below MSRP. In our situation, $1,000 under invoice was $3,400 under MSRP.
Picking your car up should be a no-brainer.
As I mentioned, I’ve done these deals many times. It’s really easy to finish the deal once you’re at the dealership. It’s usually a good idea to make a phone call before the offerings are finished. The purpose of that phone call is to impress on the person you’ve been working with that you’re not going to accept any BS whatsoever. This a gentle reminder that you’re going to walk out the door if there are any “changes”. I grew up in sales. I’m good at explaining situations like this and sticking to my word and just leaving the dealership if I have to. I have never had to do that when using Randy’s New Car Buying Method. All of the car dealers I have worked with over the years have been ladies and gentlemen. They have treated us well.
How would we pay for this car?
We needed to decide if we were going to finance this car or pay cash. The last two cars that I bought came from Tesla. The rate I have on my 2024 Tesla Model X is 3.99%. The rate I had previously on my 2020 Tesla Model X was 1.99% for a 72-month loan. By the way, did you know that Tesla does not negotiate on the purchase price of their cars whatsoever?
I look at financing cars this way. If I can get an auto loan interest rate at or below my after-tax ROI on my investments then I’ll finance the car. I earn about 8% on my stock and bond investments and have for more than twenty years. After tax, I clear about 5%. If I could get the loan for 5% or less I would finance the car.
The going rate for a new car loan right now, depending on your credit score, is somewhere between 6% and 20%. With a bad credit score, it’s going to cost you if you want to get a new car loan. Toyota was offering special financing at 4.99% on Camrys. Different models came with different finance rates.
Like so many things in life, I practice arbitrage. In situations like this, I was going to be working with interest rate arbitrage. On average I would be earning 5% on my investments after taxes. The new car loan came in at 4.99%. That was the highest loan rate I would have accepted. Another advantage of financing this deal was that I would have use of somewhere around $30,000 if I needed it for most of the next 60 months. This car would be in Carol’s name. We used her credit score, of 802, to get the loan.
Just charge it!
If I could, I would have charged the entire purchase price which was about $37,000 on a credit card. I could imagine the rewards I would earn doing that!
Alas, Toyota would only let me charge $5,000 on a credit card. I did that readily. I did that happily.
Carol just got a World of Hyatt Chase credit card. The card came with a $95 annual fee. She needed to spend $4,000 in three months to earn the card’s sign-up bonus. What was the sign-up bonus? By making this one payment to Toyota ($5,000), the money we were going to spend anyway, she would earn SIX Category 4 Hyatt hotel properties free nights. This netted out to a value for those hotel nights of $2,500 plus or minus. This one new car down payment with Toyota brought us a reduction in our travel expenses of $2,500.
Randy, show us your broadcast letter!
What did my broadcast letter look like? Here you go.
Randy N. Lewis
P.O. Box XXXX
San Clemente, California 92674
October 30, 2024
Attention: Internet/Fleet Manager
I am in the market to purchase a new 2025 Toyota Camry XLE 4-door sedan (not AWD) automobile immediately. I will not be offering a trade-in. I am a qualified buyer with excellent credit. I plan to finance this car with Toyota at the current 3.99% promotional rate for six years, although I am willing to pay cash if the purchase price with a cash purchase makes sense.
Below, you will find specific information about the car I am looking for. I have purchased several new vehicles in this manner. I don’t mind driving some distance to buy the car. The last two came from Woodland Hills and Oxnard, although I live in San Clemente. I am a serious buyer. Therefore, we can both save time on this transaction via email. Please, no phone calls.
If you are interested in doing business, please submit your bid as soon as possible and no later than the close of business today, Wednesday, October 30. I am giving each SoCal Toyota dealer a chance to earn my business. Upon acceptance of your offer, I can purchase the car immediately. I plan to sign the docs and pick up the vehicle on or before Thursday, October 31.
Please, no phone calls or gimmicks. I am a serious buyer and will complete the deal if you have the car and price that meets my expectations.
Given the competitiveness of the current market, I understand this model is currently being discounted. Since all Toyota dealers are great, the LOWEST PRICE WILL GET THIS DEAL!
Here are the specs for the car I will be buying.
Model # Toyota Camry XLE 4-door sedan
1st color choice Wind Chill Pearl
1st interior choice Light grey
2nd color choice Heavy metal
2nd interior choice Light Grey
I will consider other minor options that may be included in the car you have in stock. However, I strongly prefer to go with only the options listed below.
Pricing details Invoice cost
Toyota Camry XLE $30,624
Premium package $3,493
Premium paint $379
Destination charge $1,095
Total purchase invoice cost $35,591
with all options
I understand that taxes and license are extra.
This offer is contingent upon receiving current Toyota owner loyalty rebates and the 3.99% Toyota financing for 72 months. My most recent credit score was 810.
Please send me your best quote (with any customer loyalty rebates included) and a copy of the dealer invoice for the car you are selling to my attention at xxxxxx@yahoo.com.
Thank you for your time. The lowest price gets this business. Let’s get this deal done!
Randy N. Lewis
You need to know what items make up the car’s invoice.
Below is the list of the MSRP and invoice pricing for the car we bought and all of the options. The car had a few little things like a spoiler and this and that that I probably wouldn’t have bought if I had a choice. It’s just that every car coming from a Toyota dealer had some variations of these minor options. It wasn’t the end of the world to go with those things. They would come in handy and also be enjoyable to use. These options didn’t cost that much. Importantly, I didn’t have a choice.
MSRP DEALER INVOICE
Toyota Camry – base vehicle price
$33,400 $30,728
Premium paint
425 378
Panoramic glass roof
1,330 1,184
All-weather floor protection
309 284
Door edge guard
155 128
Rear bumper applique
69 55
Blackout emblem overlays
139 116
Rear spoiler
145 127
Delivery
1,135 1,135
Toyota Dealer Advertising
595
Gasoline
15
Total MSRP and dealer invoice
$37,107 $34,709
Discount below dealer invoice -$1,000
Total purchase price $33,709
Sales price below MSRP $3,398
Now you see it, now you don’t.
Did you notice there are two items listed on the dealer invoice that are not in the MSRP column? Toyota Dealer Advertising (TDA) and gasoline. At first, those items were a surprise to me. then I checked with other dealers who sent me their actual copies of dealer invoices for cars they had in stock. Multiple dealers assured me that “TDA” was a part of every Toyota invoice. The $15 charge for gasoline seemed a bit Mickey Mouse. But, they had gone out of their way to get me the car I wanted from another dealer.
Nevertheless, it’s important to note that the “invoice price” can be more than just the sum of the invoice costs of the car and its optional equipment. If you agree to a deal like I did of “10% under invoice” you need to know what makes up the entire dealer invoice.
It was time to get Carol’s new car.
When the final deal was agreed to over the phone, Carol and I went into the Toyota dealership. The car was all prepped and ready to go. Everyone was friendly, why wouldn’t they be? We were buying a new car from them and letting them make their monthly goals. We were getting a pretty good price. A friendly and knowledgeable man sat in the car for the better part of one hour with Carol and me explaining how everything worked.
I had some dealers tell me they wouldn’t come off of MSRP. Some would but only by a small amount. We were buying our car for about $3,400 under MSRP and $1,000 below the dealer invoice. Additionally, the dealer had done a nice job of finding exactly the car we wanted even though they didn’t have that car at their dealership. They moved that car from some other dealer to their dealership at no charge to us. If we hadn’t been able to do that, we wouldn’t have been able to buy a car at the dealer located closest to us.
I will get in your face, but if I am wrong I will send flowers.
One of my strengths is also, seemingly, one of my weaknesses. I can be direct. I treat everyone I meet with the nth degree of kindness and respect. However, if I feel someone is being dishonest I will go out of my way to make their life difficult. When I was working, my secretary was a woman of faith. More than once, I told her “I don’t want to get mad, I want to get even.” She told me she didn’t like hearing me say that! At least she was willing to speak her peace!
I did get a little sideways for a bit with the dealer on the idea that Toyota Dealer Advertising, a charge of $595, was part of the invoice. I thought that was a questionable business practice until I was convinced that is the way things are done with every Toyota dealer.
I told my sales rep and her boss in no uncertain terms that it didn’t seem right to me that TDA should be part of the invoice. I thought the invoice should only be the car and its options plus the delivery charge. Yes, I might have been a bit over the top when I expressed that opinion. Later, I learned I was wrong. I sent my sales rep a bouquet of flowers apologizing and admitting I was wrong.
My discussion with the dealer got to a point where I was told if I wanted, I could return the car on that particular day no questions asked if I didn’t like their approach. They would give us our money back. I couldn’t do that. First, I was at LAX and had no way to return the car.
Secondly, they offered me the best deal. They were the dealer closest to us for future use. They had gotten the car from another dealer so I knew that that was an advantage for us. If I thought I could beat their deal, I might have “walked” over the idea that the advertising was seemingly baked into the invoice cost. In the end, I was 100% convinced that the Toyota dealer invoice price included a charge for Toyota Dealer Advertising (TDA).
It was now time to celebrate.
When we left the dealer, we did what we always do whether we’re buying a new car for me or Carol. We drove it to a huge open parking lot at our local mall and took some pictures.
Then we went to one of our favorite haunts in San Clemente, Ruby‘s Diner. This is an upscale old-school restaurant, serving hamburgers and fries and pumpkin spice cheesecake milkshakes like you might’ve seen in the 50s. Ruby’s is really good.
To add to our celebratory mood, we had one of the most unusual if not the most unusual servers helping us. This guy looked and acted as if he could be on Broadway. He was in full entertainment mode 100% of the time. In the end, we bonded with him and ended up taking his picture while he demonstrated some of his artwork. Does this guy look like the most unusual server you might expect to get?
I thought there was a pretty good chance he was in our local high school’s drama program. I’m glad I didn’t mention that in that manner. How old do you think this guy is? How does 38 sound? I was blown away. I took him to be 18 or maybe 20 years old.
The car is in our garage.
Now Carol’s Toyota Camry sits in the garage. The car is 4 inches longer than her previous Lexus RX 350. That baby looks as long as a Formula 1 racer. It’s just about as long as my Tesla Model X. Our garage isn’t that large. Carol will have to be careful pulling in not to rip off the side mirrors or run into the garage cabinets.
That’s pretty much the latest and greatest from the 2024 version of Randy’s New Car Buying Method.
If you do this as directed you’re going to have excellent success. You may not want to optimize for quite as much value as I do. Remember, for me this is just one big game. You might not want to do this on December 31. You might not wanna contact 37 dealers. You see, I don’t mind doing that. I have worked on the process, I’ve streamlined it, and I can implement it easily.
I will tell you that in 24 hours, I probably sent out or received 200-300 emails. Most of those were quick with a question here or a comment there. I found that to be fun. You might not find that to be all that much fun just as I would not find working in a garden to be fun.
Lots of people wanted to talk to me on the phone. Remember, don’t share your phone number or you will regret it.
Don’t think this idea will work? You’re probably right. Think this idea will work? You’re probably right.
For all of those people who think that this method doesn’t work since COVID-19, you would be wrong. Almost all of the 37 dealers I contacted joined in the fun. I got price offers from nearly everybody on the car we wanted or the car they had that came closest to the car we wanted. I got a great deal at $1,000 under the invoice price. We bought the car at the end of the month on October 31. Would I have done better buying the car on December 31? I think so but I don’t know by how much.
Got a question?
If you have a question about doing this, let me know. I ask for only one thing if you wanna do that. I have people ask me what’s up with this or that and I will commonly spend a half hour providing them a high-quality response. Then I never hear back from them. All I ask for is a simple thank you. In my world, if I ask for help, and someone tries to help I thank them.
Time to get back on the road, the foreign road.
Carol didn’t have much time to enjoy her new Toyota Camry XLE. Just a couple of days after that deal was made we headed off to what is going to become my 88th lifetime trackchasing country where I’ve seen racing. At the bottom of this note is a list of the 87 countries where I have seen racing.
Where we are going is a most unusual country. I guess we’ve already been to the “usual” countries if you consider Sri Lanka, Azerbaijan and Saudia Arabia run of the mill.
When we get back, I’ll tell you all about it. In the meantime, good luck with your new car-buying purchases. I always recommend people optimize for personal enjoyment and memory dividends. Most folks can create a good deal of personal enjoyment from having a new car. I can certainly tell you that every time I play this particular “game” I create a memory dividend. Did you know that sharing my experiences in this newsletter format creates memory dividends for me?
One more thing.
I told you that when I do this I am playing a game. I’ve done my research and all I ask is for the dealer to be honest and straightforward. I am at a bit of a disadvantage. I play this game once every five years. The dealer plays this game multiple times every day.
Yes, this is a game for the people who work at the dealership. However, they are working at their game and I am playing my game. There’s a difference.
The dealer is not your friend no matter how much they smile and gladhand you. I’m sure that the people who work at the car dealership want to be able to come to work next Monday, next month, and next year. To do that they need to make a profit.
The dealer I was working with was selling me the car at 10% under the invoice. As they like to say, “This is what I paid for the car”. However, let’s not confuse ourselves here. The dealer would not be interested in selling me a car at 10% less than what they paid for it, would they? If they did that for very long, they wouldn’t stay in business.
The dealer gets other sources of revenue and for this refer to the invoice to talk about holdback and other things like that.
Of course, the dealer is going to get bonuses for units sold. They get income from meeting goals at the end of the month, the quarter, or the year. That’s why consumer shopping on December 31 is the best day of the year to buy a car. Do your research. You will see that fact confirmed everywhere.
One of the main advantages I have going for me is that I had 37 Toyota dealers battling against each other mainly on the issue of price.
I will close with this. Most people don’t NEED a new car they WANT a new car. In our case, since our car had been wrecked we truly did need a new car.
Everybody gets a good deal?
In my experience, I have never heard anyone say they didn’t get a good deal on their new car purchase. People want to think they can negotiate with the best of them. If they did the research I do and followed a systematic process I think they would get a good deal. Some folks are into the process like I am. Most are not. That’s OK. Everyone optimizes for different things.
The entire idea of nearly everyone thinking they got a good deal reminds me of people coming back from Las Vegas. When someone asks them how they did at the tables they will very likely say, “I broke about even.” Honestly, I don’t know if I’ve ever talked to a person coming back from Vegas who told me they lost any money. That’s odd. Those big glamorous skyscraper casinos must be selling a lot of cheeseburgers and tickets to Céline Dion and Carrot Top shows. Maybe the casinos really do lose a lot in the gambling business. However, I don’t think that’s the case. Everyone wants to say they got a good deal.
I hope you get a good deal. You will if you use Randy’s New Car Buying Method.
Talk to you after we get back from trackchasing country #88.
Randy from Randy’s New Car Buying Method.
RLR – Randy Lewis Racing Lifetime
Trackchasing Countries
# 1 – UNITED STATES OF AMERICA* – Peoria Speedway – Mt. Hawley (oval) – Track #1, Peoria, Illinois – circa 1955
# 2 – CANADA* – Cayuga Speedway (oval) – Track #174, Nelles Corner, Ontario – 1988
# 3 – AUSTRALIA* – Parramatta City Raceway (oval) – Track #180, Granville, New South Wales – 1989
# 4 – UNITED KINGDOM* – Northhampton International Raceway (oval) – Track #378, Northhampton – 1999
# 5 – NETHERLANDS* – Driesum Racetrack (oval) – Track #839, Driesum – 2005
# 6 – BELGIUM* – Bellekouter oval (oval) – Track #841, Affligem – 2005
# 7 – FRANCE* – Circuit de Croix en Ternois (road course) – Track #843, Saint-Pol sur-Ternoise – 2005
# 8 – GERMANY* – Nurburgring (road course) – Track #844, Nurburg – 2005
# 9 – NEW ZEALAND* – Western Springs Speedway (oval) – Track #1,134, Western Springs – 2006
# 10 – MEXICO* – Triovalo Bernardo Obregon (oval) – Track #1,281, Tiajamulco de Zuniga, Jalisco – 2007
# 11 – BARBADOS – Bushy Park Racing Circuit (road course) – Track #1,296, Bushy Park – 2007
# 12 – THAILAND – Bira Circuit (road course) – Track #1,300, Pattaya – 2008
# 13 – SOUTH AFRICA – Durban Grand Prix (road course) – Track #1,315, Durban, KwaZulu-Natal – 2008
# 14 – JAMAICA – Dover Raceway (road course) – Track #1,322, Brown’s Town St. Ann – 2008
# 15 – SWEDEN* – Sturup Raceway (road course) – Track #1,335, Malmo – 2008
# 16 – DENMARK* – Ring Djursland (road course) – Track #1,336, Tirstrup – 2008
# 17 – CZECH REPUBLIC – Automotodrome BRNO (road course) – Track #1,381, Brno – 2008
# 18 – AUSTRIA* – Lambrechten Stock Car Track (road course) – Track #1,382, Lambrechten – 2008
# 19 – IRELAND – Tipperary International Raceway (oval) – Track #1,388, Rosegreen – 2008
# 20 – GUYANA* – South Dakota Circuit (road course) – Track #1,390, Timehri – 2008
# 21 – CHINA* – The Guia Circuit (road course) – Track #1,392, Macau – 2008
# 22 – COSTA RICA – Autodromo La Guacima (road course) – Track #1,398, La Guacima – 2008
# 23 – ANDORRA – Grandvalira Circuit (road course) – Track #1,404, Port d’Envalira – 2009
# 24 – ARGENTINA – Circuito Efren Chemolli (oval) – Track #1,406, Buenos Aires – 2009
# 25 – QATAR – Losail International Circuit (road course) – Track #1,408, Doha – 2009
# 26 – BAHRAIN* – Bahrain International Circuit (road course) – Track #1,410, Sakhir – 2009
# 27 – UNITED ARAB EMIRATES* – Dubai Autodrome (road course) – Track #1,411, Dubai – 2009
# 28 – COLOMBIA – Autodromo de Tocancipa (road course) – Track #1,415, Tocancipa – 2009
# 29 – SPAIN – Motorland Aragon (road course) – Track #1,416, Alcaniz – 2009
# 30 – PORTUGAL – Circuto de Murca (road course) – Track #1,417, Murca – 2009
# 31 – ICELAND – Kapelluhraum (road course) – Track #1,420, Hafnafjorour – 2009
# 32 – HUNGARY* – Hungaroring (road course) – Track #1,426, Mogyorod – 2009
# 33 – SWITZERLAND* – Hock Ybrig (road course) – Track #1,427, Hoch Ybrig – 2009
# 34 – ITALY* – Vighizzolo d’Este Stock Car Track (road course) – Track #1,428, Vighizzolo d’Este – 2009
# 35 – DOMINICAN REPUBLIC* – Autodromo Mobil 1 (road course) – Track #1,515, Santo Domingo – 2009
# 36 – MALTA* – Ta’Qali Race Track (road course) – Track #1,521, Ta’Qali – 2010
# 37 – FINLAND – Lake Pidisjarvi Ice Track (road course) – Track #1,524, Nivala – 2010
# 38 – JAPAN – Suzuka Circuit (road course) – Track #1,530, Suzuka – 2010
# 39 – CHILE – Autodromo de Interlomas (road course) – Track #1,531, Temuco – 2010
# 40 – MOROCCO* – Circuit de Marrakesh (road course) – Track #1,535, Marrakesh – 2010
# 41 – BRAZIL* – Circuit de Caruaru – Aryten Senna (road course) – Track #1,540, Caruaru – 2010
# 42 – ESTONIA* – Laitse Rally Park (road course) – Track #1,571, Laitse – 2010
# 43 – LATVIA* – Bikernieki (road course) – Track #1,572, Riga – 2010
# 44 – GUATEMALA – Autodromo Pedro Cofino (road course) – Track #1,580, Alotenango – 2010
# 45 – EL SALVADOR* – El Jabali (road course) – Track #1,582, Quezaltepeque – 2010
# 46 – ROMANIA – Bradu (road course) – Track #1,603, Bradu – 2010
# 47 – BULGARIA – Closed Route – Burgas (road course) – Track #1,604, Burgas – 2010
# 48 – SOUTH KOREA – Korea International Circuit (road course) – Track #1,605, Yeongam, Jeollanam-Do – 2010
# 49 – PHILIPPINES – Batangas Racing Circuit (road course) – Track #1,608, Batangas – 2010
# 50 – NORWAY – Lyngas Motorbane (road course) – Track #1,648, Lier – 2011
# 51 – MALAYSIA – Sepang International Circuit (road course) – Track #1,656, Sepang – 2011
# 52 – INDONESIA – Sentul International Circuit (road course) – Track #1,657, Babakan Madang, Boder – 2011
# 53 – LUXEMBOURG* – Alzingen (road course) – Track #1,711, Alzingen – 2011
# 54 – POLAND* – Tor Slomczyn (road course) – Track #1,713, Slomczyn – 2011
# 55 – SINGAPORE* – Marina Bay (road course) – Track #1,714, Singapore – 2011
# 56 – URUGUAY – Piriapolis Grand Prix (road course) – Track #1,724, Piriapolis – 2011
# 57 – SRI LANKA – Pannala Race Track (road course) – Track #1,732, Pannala – 2012
# 58 – ECUADOR – Autodromo Internacional de Yahuarcocha (road course) – Track #1,736, Ibarra – 2012
# 59 – SLOVAKIA* – Slovakia Ring (road course) – Track #1,745, Orechova Poten – 2012
# 60 – MONACO* – Circuit de Monaco (road course) – Track #1,747, Monte Carlo – 2012
# 61 – CROATIA – Automotodrom Drobnik (road course) – Track #1,762, Rijeka – 2012
# 62 – PERU* – Autodromo La Chutana (road course) – Track #1,802, Lima – 2012
# 63 – GREECE – Serres Circuit (road course) – Track #1,807, Serres – 2012
# 64 – RUSSIA* – Moscow Central Hippodrome (oval) – Track #1,824, Moscow – 2013
# 65 – LITHUANIA* – Marijampole Autocross Track (road course) – Track #1,842, Marijampole – 2013
# 66 – INDIA* – Buddh International Circuit (road course) – Track #1,915, Noida – 2013
# 67 – GEORGIA – Rustavi International Motorpark (road course) – Track #1,916, Rustavi – 2013
# 68 – TRINIDAD AND TOBAGO* – Larry Gomes Stadium (road course) – Track #1,928, Arima – 2014
# 69 – TURKEY* – Istanbul Park (road course) – Track #2,035 Akfirat – 2014
# 70 – AZERBAIJAN* – Streets of Baku (road course) – Track #2,037, Baku – 2014
# 71 – SERBIA* – Usce (road course) – Track #2,224, Belgrade – 2016
# 72 – BOSNIA AND HERZEGOVINA – Zaluzani (road course) – Track #2,235, Banja Luka – 2016
# 73 – PANAMA* – Circuito Internacional de Panama (road course) – Track #2,290, La Chorrera – 2016
# 74 – ZIMBABWE – Bulawayo Motorsports Park (road course) – Track #2,291, Bulawayo – 2016
# 75 – NAMIBIA – Desert Raceway (oval) – Track #2,369, Walvis Bay – 2017
# 76 – MACEDONIA* – Skopje Street Course (road course) – Track #2,386, Skopje – 2017
# 77 – UKRAINE* – Autodrome Chayka (road course) – Track #2,387, Kiev – 2017
# 78 – BELARUS – Stadium Zarya (oval) – Track #2,421, Minsk – 2018
# 79 – MALDIVES – Hulhumalé Racing Track (road course) – Track #2,425, Hulhumalé – 2018
# 80 – BOLIVIA – Autodromo Santa Cruz (road course) – Track #2,429, Santa Cruz – 2018
# 81 – MOLDOVA* – Autocross Colonita (road course) – Track #2,503, Colonita – 2018
# 82 – SAUDI ARABIA – Ad Diriyah E-Prix (road course) – Track #2,514, Ad Diriyah – 2018
# 83 – TUNISIA – Belvedere Race Track (road course) – Track #2,547 Tunis – 2019
# 84 – MONTENEGRO* – Auto Kros Zlatica (road course) – Track #2,548 Podgorica – 2019
# 85 – ANTIGUA AND BARBUDA* – Crabbs Raceway (road course) – Track #2,553 Crabbs – 2019
# 86 – SLOVENIA* – Motorsport Kaps (road course) – Track #2,782 Moravce – 2022
# 87 – KUWAIT – Kuwait Motor Town (road course) – Track #2,935 Ali Sabah Ali Salem – 2023