New cars are cheaper than you might think

The purpose of this post is to show you that you cannot trust information on new car prices that is out there. Not even information from a paid service by Consumer Reports, a non-profit that is supposedly on my side.

I bought this car on November 22nd, 2008: http://www.mazdausa.com/MusaWeb/displayPage.action?pageParameter=modelsMain&vehicleCode=MZ5

It is a 2009 Mazda 5 Sport, a six-passenger "micro-minivan". Note: a 2009, not a 2008. I paid $14,650 for it. If that seems like a low price, read on. The sticker price, with delivery to the dealer, is $18,665. Kelly Blue Book (KBB) says that people are actually paying $18,105 for this car...."based on actual new-vehicle transactions received from auto dealers across the U.S.". I don't believe that, but you can see what they say for yourself at http://www.kbb.com/KBB/NewCars/PricingReport/2009_Mazda_MAZDA5_236886.aspx

OK, so instead of trusting KBB, I bought a paid service with Consumer Report (CR), which told me that the dealer had paid $17,175 for this car, after dealer holdback. They generally suggest you pay 3-4% over that. CR claims that they knows about all incentive programs: special discounts, incentives to the dealers, rebates, etc. etc. CR is a non-profit, I can trust them right? Well, on my own I discovered a $1,000 Mazda loyalty program (we already had a Mazda) and a $1,000 Mazda-to-dealer discount. Thanks for nothing, CR. I will ask for a refund on my paid service with them ($39).So take $2,000 off the $17,175 cost that CR told me about and you are at $15,175 cost to the dealer. I should pay let's say 3% more than that, so $15,630.......all according to CR. I offered $14,200, an insult I was sure the dealer would refuse. After some haggling and getting in my car to leave, we agreed on $14,650 (plus sales tax of 7%).

I think I could have beaten them down a couple of hundred more, but I was feeling sorry for them. If you believe the data that I just showed you, the dealer just sold me a 2009 car at a $525 hard cash loss to them. I don't believe that, not on a model car that is only in its third year and is top-rated by Consumer Reports in it's category

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Conclusions:

1. The information that is out there on what you should pay for a new car, even info that you pay for, is just flat wrong.

2. In these tough times, manufacturers like Mazda probably have all kinds of discounts to their dealers just to move cars. I have no idea what those behind-the-scenes agreements are, nor does anyone else. I don't need to know what those deals are, I just needing to make a low offer and see if it sticks.

3. At least on this car, you can pay somewhere around 78-79% of sticker price on a 2009 model.

4. I have also found used car pricing published on the Internet to be much higher than reality.

5. So I would urge you to insult your local car dealer - they might just take your offer.Whether the car is new or used.

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Had I not dug a bit deeper, I might have paid $3,000 more (20% more) and thought I actually got a good deal. I hope this information is of some help to someone.

By the way, I really like my new car. It is my kind of car.