Posted by FrankRizzo on January 11, 1999 at 19:48:41:
The Rizzo Method
After explaining it 100 times in messages here, on
other message boards, and in numerous E-Mails, it
is time for the definitive post on the subject.
The "Rizzo Method" is my invention. After talking
to numerous friends, and collecting the best
tricks that they used to negotiate a car deal, I
devised this method. It is pretty simple to do,
but requires some work on your park, but it is
almost always rewarded with a lower price on the
car that you are interested in.
You start by picking out the car that you are
interested in. Once this has been decided, you
need to head to an online service and see what the
car costs with the options that you want. I
recommend 3 sites for this information.
#1 Edmunds
#2 CarPoint
#3 Kelley Blue Book
Edmunds seems to have more info, but CarPoint has
the pricing tool which allows you to just click
the
options that you want, and it will total them up
for you. From these sites you should be able to
get the following items, which are important to
you.
Order Codes, Invoice and MSRP prices for car,
colors, and options that you are interested in. It
also allows you to check for rebates, or
incentives
on your particular model of car, which, in some
cases, can SERIOUSLY impact the amount you pay for
the car!
We will need this info when the time comes to make
our "Offer Sheet" for the dealer. I recommend
that you print out the content at these sites, so
that you have it handy to refer to later. At this
point, you should start deciding how much to offer
over invoice price on the car.
It is said that somewhere in the 3%-5% range is a
good starting place. If you are having trouble
deciding what amount to offer, it sometimes helps
to pick a number that brings the amount to a nice
even number. That is what I did. I chose $775.29
over invoice to bring the price of the BMW to an
even $32000. At this point, it is usually a good
idea to check what the payment amount will be.
There are a couple of places that will aid us in
that quest, the first is a place that will tell us
what the loan rates are at our local banks. It
is:
Bank Rate Monitor
Once you have the best rate from your local bank,
the next stop is:
Edmund's Loan Calculator
This helps in that you can get a feel of the
maximum amount over invoice that you would pay, in
the event that no dealer will match the price we
decided on above.
Now is the time for us to make our form. This
form will be used soon. It is a pretty simple
form, the format is not crucial, but the content
is. On my form, I have a title at the top that
says "New Car Offer Form". Pretty simple. Then,
I
have a table underneath. It doesn't have to be a
table, I just thought it looked neater. For the
rest of this section, it will be assumed that we
are doing a table. There will be 3 columns to our
form. The first column is Order Code. This is
the
internal code that is used at the factory, and the
car dealership to identify cars, colors, and
options. We got these from the pages above.
The next column is Description. In this column,
you should use the description of the item from
the
online sources. (Most of the time, it is the
common terminology used by the dealer, so there
will be no confusion as to what you are talking
about). The last column is Invoice Price. This
is
the column where you will put the cost of the car,
and each option that you are interested in.
Starting at the top, the first row should be the
car itself. Don't forget to enter any model
information there. (GL, GLS, GLX, etc). Then,
move
on to the options. I generally like to put the
exterior color first, followed by the interior
color. It stands to reason that the dealer is
gonna want to see what kind of car, and then the
colors first. The options come later. Once this
is done, start listing the options that you want,
one at a time, one per line, like this..
928 Premium Option Package W/16" wheels $2,415.00
(This is in a table, so it looks better than
that).
Continue on, until you have all the options
listed. Then, there is one last option that we
have to add. That is "Dealer Profit Over
Invoice".
It has no order code. In this spot, put the
amount that you decided on above. And, below
that,
you should add a row for "TOTAL". Add up the
Invoice Price column, and put the total there.
Save your form for now, we will want to make a
simple addition to it a little later. If you are
like me, you are a stickler for the fine points.
I
also included the taxes, title, and license
amounts on my form. I encourage this, as it shows
that you know what you are doing, and know what
you
expect to pay.
Now, on to the next step. You should go to the
website of the company that produces your dream
car. In the past I used this method personally
for
a vw Passat, and a BMW 323. At their site, you
should be able to get a list of dealers near you.
At the vw site, you put in a distance that you
would drive for a good deal, and it lists the
dealers. In my case, I chose 200 miles, and was
rewarded with a list of 19 dealers. On the BMW
site, you put in your state, and it gives you a
list. I did this, and included the 2 dealers
nearest me in the 2 nearest adjoing states. (I am
in TN, so for me, it was KY, and AL). This gave
me
a list of 9 dealers total. Print out this list,
so that you have all the information handy.
At this point, there are 2 paths which you may
take. I have used them both, and found them to be
functional.
#1 The Phone Method. In this method, you will
call every dealer on your list, and ask a salesman
what the best deal he would give you is. Write
these down, (Along with the salesman's name).
#2 The Fax Method. In this method, you will fax
your "New Car Offer Form" to every dealer on the
list. Call the dealer, ask for someone is sales,
and tell him that you are about to fax over an
offer, and that everything he needs to know is on
the fax. If they ask for a name, or phone number,
tell them it is on the fax. Pseudo-anonymity is
important! (For reasons disclosed later)
Now, since you have decided which you want to do,
open up your form, and it is time to add the last
thing to it. The technique that you are doing
determines what we put at the bottom. If you are
doing the Phone method, you will want to fill in
your name, address, and telephone number. You will
also want to add a spot for the Sales Manager's
signature. If, on the other hand, you are using
the Fax method, you will want to put your name,
and
your fax number ONLY! This is very important! It
accomplishes 2 things:
#1. It MAKES the salesman have to take a couple
of extra steps in order to communicate with you.
Thusly, you only get serious inquiries from
dealers.
#2. If you get a confirmation back from the
dealer, you have a hardcopy of the offer in the
event that they try to say you misunderstood, or
that "That's not what I said".
OK. Now that the form is done, print it out. If
you are doing the phone method, get on the phone.
If you are doing the fax method, get to faxing.
Now that you are through with that step, you
should have a pile of information as to who will
do
what. At this point, it is important to find out
what else is charged at each dealer. So,
(regardless of which method you are doing), call
the dealerships back, ask for someone in sales,
and
just ask "If I buy a new car from you, what are
you gonna charge me for?". I know, it's kind of
direct, but that is the way we have to be to get
what we want. This will sometimes make that GREAT
deal turn out to be a bad deal, if there are lots
of "other" charges. Examples of which are:
Document Fees
Dealer Prep (Or PDI as they call it)
Tire Fee (Someone tried to charge a Rizzoite this
one).
Regional Advertising Fee (This one CAN be
legitimate, but if there is only 1 dealer charging
it, it is probably bogus).
Etc.
The prices on these vary widely, and some dealers
don't charge them at all. My BMW dealer charges
for the car, + Taxes, Title, and License, and that
is all. While a dealer only 100 miles away tried
to run the gambit of the above. Shameful.
Anyway, once you get all these numbers, add them
all up, and see who has the best deal. One thing
to consider is distance. If you have to drive 300
miles to save $25, I don't know that I would do
that. In my case, I am driving 275 miles to save
$2000. Once the decision is made, call the dealer
back, ask for the salesman, and recap the details
of the deal. If all matches, see what their plans
are as far as getting you the car. If they have
it
on the lot, make an appointment to go to the
dealer and get it. If they have to order it, find
out a deposit amount, and ask them to fax or mail
you a copy of your deal sheet with the info all
filled in, and you will mail them a check back.
Tell them you appreciate their honesty, and look
forward to dealing with them.
Now, one thing that is required sometimes is
mental toughness. I am tough to the point of
being
rude. I have the money, I would like the car, but
I refuse to get hammered on the deal. So, I put
up the defensive shield before I go in. Some good
places to read to find out why you should do this
are:
#1 Edmund's Consumer Advice
#2 Car Buying Tips
These off a WEALTH of information on what tricks a
dealer MIGHT try to play on you when you get
there. I have used the "Countermeasures", and I
have gotten to the point that I like to use them
now. Hopefully you will too!
Once you are prepared for battle, (I should pause
at this point to say that it isn't always battle.
My last 2 deals have been completely stress free
"Yes, we'll take that deal", kinda deals, with no
pressure, and no stress), Do whatever is required
to get the deal sheet as proof that you are
getting
what you think you are getting, and send the check
afterwards. If the dealer is local, or you don't
mind driving, drive down, see the salesman face to
face, and hammer this out. (Only after the
verification call, no use wasting gas if they
wanna
try a bait & switch on you).
Now, we have a deal sheet on our dream car, for
the amount that we want to pay. What more could
you ask? There is one last thing that you should
know. Most dealers will try to see you some
garbage after you have signed the deal for the
car.
Such things as "Scotchgarding the seats", or
"Undercarriage weather coating", "Paint
Protection", or a new one that I just heard about
"Lifetime waxing". It seems that for WAY too much
money, you can take your car in once a quarter,
and
the dealership will wax it. What a ripoff. It is
all garbage, overpriced, and basically useless.
My
favorite way to combat the undercoating, or "Paint
Sealant" is to ask "If the ______ on this car is
so bad, I don't know if I want to buy it" (fill in
the blank with whatever useless thing they are
trying to sell you). You should have learned all
about this from the consumer links above.
Lastly, if you are intent on leasing instead of
buying, you might want to check out the following
links for lease calculation information.
#1 Edmun's Leasing Link
#2 LeaseWizard
That pretty much does it for the Rizzo Method,
good luck, and good shopping!
Rizzo Method Addendum
I have recently heard from people that they tried
the method, and could not find a dealer who would
take the offer. This brings me to the part that I
left out. It is what I call the "Tough Market
Section". If you are trying to get a car that is
VERY popular (Like the BMW 3 series is right now),
then you might have difficulty receiving the very
low "Invoice-3% over" deals that you can on most
other models. There are also places where a
particular car may be selling like hot cakes, if
this is case, you might have a hard time also. But
here is some wisdom to go with this. When I was
shopping, I tried the big city of Nashville, and
got mostly MSRP quotes on both models that I tried.
(Passat and BMW 323). Both times, I found my
deal in a small town. On the Passat I got $100
over, and on the 3, I got 3% over invoice. The
trick to this is to find the dealer who NEEDS your
business. They all claim to WANT it, but the
small-town dealers might not see enough "traffic"
to sell their quota of cars, so they will be
willing to make less, to sell those cars. If all
else, the method should make it possible for you to
get the best deal possible. (Which is all we can
ask for). I had a quote from a person who used
AutoByTel to get a quote, and the Rizzo Method in
the same market, and got a better quote on their
own. It's not always easy, but it is always
useful, if for no other reason than to get you in
the right frame of mind come time to visit the
dealer.
