March 6, 2011


skin deep
If you love cars and must have a specific latest/greatest vehicle, this post won't help you. If prefer brands other than Audi, BMW or Mercedes, the ideas here probably still apply.

For me, a vehicle is a way to get from one place to another in safety and comfort. I'm not tied to a particular
  • brand: Audi, BMW or Mercedes-Benz are fine
  • model: midsize car (A6, 5-series, E-class) or SUV (Q7, X5, ML)
  • colour: any, though ideally not black or silver
Thanks to competition, these vehicles are well-equipped with features like keyless entry, a heated steering wheel, Bluetooth phone integration, GPS navigation, bi-xenon headlights and a backup camera.

Flexibility saves you money since you can walk away. At any given time, you'll find one vendor is more motivated to sell. This could be a sales rep, dealership or manufacturer. Ideally, all three. Here's how we got our last three BMWs and Mercedes.

Who's Selling?

To start, look for a model with an all-new generation on the way. Right now, the Audi A6 and Mercedes ML have numerous extras because new models are due later this year. The manufacturer won't drop the list price to boost sales. Instead, they'll include more options at no extra charge. That's better value.
In Praise of Older Designs
There's nothing wrong with an older design. You're avoiding the glitches that may plague an all-new model. When Porsche introduced the Cayenne, a gotta-have-it client had problems with the keyless ignition and closing the rear hatch. A colleague with a Mercedes E-class two generations ago had problems with squeaky brakes and lights that kept burning out. A client who always bought the BMW 5-series got the first Infiniti M45 and had numerous problems including deformed side-view mirrors. Even when you get loaners, you're still wasting time with a defective new model and risking anxiety. Let others pay a premium for the unproven. Even Apple has flops.

With a proven design, the reliability is more predictable and you know the crash test results. If you're leasing, you'll return the vehicle in three to four years and can get newer features after the kinks are gone.

The Dealer

The dealer helps by giving a discount off list price. Here's where you can practice your negotiation skills. I don't like the process. The last three times we bought, the sales rep started with a reasonable-looking discount and got our initial offer approved — no back & forth required..

The Financing

The financing arm helps by providing low interest rates and perhaps an inflated residual value to reduce lease payments. If you're returning a leased vehicle, you might get additional discounts to entice you to upgrade now. For instance, Mercedes offered to waive my remaining four lease payments.

There might be other incentives. For example, Mercedes had a Toronto Autoshow special to waive the first three lease payments.


You'll save even more by picking a demonstrator. You skip the hefty freight and PDI charges. You also get a further discount because you're getting a "used" vehicle. We always do. This also reduces the risk of getting a lemon because the driver would have identified them already.

The Winner

After comparing options, Mercedes came out ahead now and three years ago. Both Audi and BMW warned me of hidden charges and bemoaned the pricing. Their loss. I replaced my E-class with a Bluetec diesel ML this week.


Podcast 107 (5:09)

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PS I saved time by doing no research apart from visiting the three dealerships: Audi & BMW on Friday. Mercedes on Monday (and Thursday to take delivery).


Filia Artis said...

Our first car took literally years to buy - hours and hours of research and visiting different dealers before actually deciding to purchase what has worked out to be an excellent used car on Kijiji.

Interesting that you put nearly no research time in outside of just visiting the dealers this time.

I think the key that you have stumbled upon is limiting the choices you offer yourself in a nearly unlimited marketplace of possible options.

Our next car will either be a Mazda or a Hyundai, so with a chosen brand in mind, like you had (BMW/Mercedes/Audi), the purchase will be much more straightforward. The marketplace has changed in the past five years as well with the introduction of 0% financing, which used to make used cars more competitively priced.

Good tip you mention about buying a "sample/inventory" car and I agree that the less haggling, the better.

Promod said...

Thanks for your comment, Filia.

In the 1990s, we spent ages researching cars. We'd pore through Consumer Reports, read articles and visit dealerships. We knew the dealer cost and which options to avoid. In those days, we bought rather than lease. That meant we were making a long term decision. Also, there were more differences in quality.

Nowadays, vehicles are much better made and the differences are more subtle (though true aficionados will disagree). No matter what you pick, there will be better choices next year.

Back in Economics class we examined two successful lawyers. The lesson stuck with me. One spent six months getting a home custom-built (picking the lighting, faucets, appliances, tiles, etc). The other invested the time in improving skills. Guess who was more successful over time?

There are many diversions to soak up time without bringing us close to our objectives :)