The Rizzo Method

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.









