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I'm so tired of haggling with the dealers at a local Toyota dealership. They are not only pressing, but also aggressive, condescending and mean.

I want to cut the middleman. I know exactly what I want. Is there any way I could order a car directly from Toyota? Will this save me the money?

I don't like the idea of paying the middleman. Those lot fees, the commission. I read on Yahoo that this is possible, but what is the best way to go around this?

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Comments are not for extended discussion; this conversation has been moved to chat. – JohnFx Mar 31 at 17:41
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You might try a different dealership further away and/or in a smaller town. A friend of mine would phone dealers in smaller towns barely within driving distance. He tell them what he wanted, the price he was willing to pay and was clear that he wanted minimal paperwork/fussing at the dealership. He refused to haggle or get drawn into extended discussions. "Here's what I want and here's what I'm willing to pay." He started early, gave himself the luxury of time eventually a dealer called back that was willing to meet his price and terms. – JS. Apr 1 at 16:44
    
There is a humorous short video on this topic: Adam Ruins Everything - The Real Reason Car Dealerships Are the Worst – Nayuki Apr 3 at 23:25

12 Answers 12

up vote 59 down vote accepted

No you can't buy direct from Toyota. Largely because of many states' laws (assuming you're in the US) requiring a dealer relationship for car purchasing, read about Tesla's struggles with direct to customer sales. Secondly because Toyota corporate simply isn't set up to sell a car directly to a customer.

I know there are services that help people through the buying process. If you're finding Toyota dealerships to be this difficult you may consider just buying something from someone who wants to sell to you. If the buying process is this difficult imagine the service relationship.

Edit: Additionally, it's important to remember when financing a car that there are essentially two transactions taking place. First you're negotiating the price of the car. Then you negotiate the price of the money (the interest rate). The money does not need to come from the dealership, you can secure your financing rate from a separate bank or local credit union. You should definitely pursue alternate financing if they're quoting you 7.99% with a FICO of 710. But don't tell the dealership you've already got your financing lined up until you're happy with the price of the car.

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Often manufacturers will have a quote feature. You can "build your own" custom package on their website and they will forward it to the dealer of your choice for quote. This could help as a starting point for negotiations. – jkuz Mar 29 at 17:26
    
See other answers about case shopping, which have good advice about how you deal with dealers on a more even basis... And why buying a new car may be a mistake financially. – keshlam Mar 29 at 17:55
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@jkuz, Often the dealer will then get that build quote and find something on their lot as close as they can and tell you to come for a test drive today! They'd rather sell what's on their lot so you're still going to deal with some BS trying to get that car ordered. – JPhi1618 Mar 29 at 20:15
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"But don't tell the dealership you've already got your financing lined up until you're happy with the price of the car." Can you explain a bit about why OP shouldn't do this? (It seems obvious to me but I can see how someone new to car buying wouldn't make the same jump to conclusion) – TylerH Mar 30 at 12:55
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@TylerH If you tell them upfront you have your own financing, they'll have less reason to negotiate on the price of the car. If you get financing through the dealership, they'll pretend to give you a great deal upfront because they know they'll recoup the discounts through interest over time. – Ivan Mar 30 at 14:38

I feel your pain. It probably depends on your state, but two things we've tried with some benefit:

  1. Purchasing through Costco, which meant that the dealer didn't negotiate price or features with us - although they did spend an hour at the end trying to sell us extra-cost options like extended warranty, road service, etc. The hilarious thing is if you research those extra-cost things, the internet will tell you none of them is a win. I guess duh - they are a win for the dealer or the manufacturer.
  2. Our nicest experience was many years ago in California, where we bought through a broker (google 'auto brokers') - we told them what we wanted, they found it and gave us the price, I think they even delivered it. Just make sure you get a well-reviewed broker; your bank or credit union might have recommendations.
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+1 for buying through Costco, the Consumer Reports Car Buying Service (TrueCar), or a reputable broker. – Zach Lipton Mar 29 at 20:04
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I had no idea Costco sells cars...can you buy just 1, or do they come in packs of 10? – coburne Mar 29 at 20:30
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Even if you buy through Costco, you would still be making use of an Authorized Toyota Dealer. The way it works is that Costco refers you to a partnering dealership with whom they have pre-negotiated deals. You go to the dealer telling them that Costco sent you there, and you get the Costco members' price. – 200_success Mar 30 at 1:22
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Is the Costco price better than the Internet / Fleet price? – Michael Mar 30 at 1:59
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@coburne If you're getting such a package, you should see if they can throw in the multi-story car-carrying truck for free. – TOOGAM Mar 30 at 20:57

You could consider buying a fairly recent used car from CarMax. They have fixed pricing, and you'd save a good amount of money on the car (since cars lose tons of value in their first year or so).

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Cars lose like 10-20% of their 'value' as soon as they're driven off the lot, even. – TylerH Mar 30 at 12:57
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Here in MD, CarMax sells Toyotas new, also with the fixed prices. – Aaron D. Marasco Mar 31 at 23:50
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When looking for a used car for our kids to drive we found that buying a "certified" used car was a good deal. The car we found (2011 Honda Civic, purchased in early 2014) had come in off a three year lease with 18k miles on it. The dealer did all service, inspected, oil, filters, etc, etc, and sold us the car at a reasonable price. Just suggesting this as an option. If you can find a low-mileage used car it could save you some money. – Bob Jarvis Apr 2 at 19:16

Any car manufacturer that undercuts their own dealer network would have that network fall apart quickly. Tesla is using a dealer-free distribution model from the start, so they don't have that problem. Toyota doesn't work that way, though.

GM imposed a uniform no-haggling policy with their Saturn brand, but that policy was coupled with local monopolies for dealers to make it work. Lexus has also experimented with no-haggling and online ordering (with delivery still taking place at a dealership). The rest of Toyota doesn't work that way, though.

Some car manufacturers, such as BMW and Audi, allow you to take delivery of your new car at the factory for a discount. But even then, the transaction still takes place through a dealer. Toyota doesn't work that way, though. For one thing, they work at a different scale. If you buy a Camry in the US, it might be produced in Kentucky, Indiana, or Aichi, depending on business conditions.

You say that you want to cut out the middleman, but the fact is that you do require someone to deliver a Toyota to you, like it or not.

If you're interested in saving money, consider trying various well documented tips, such as negotiating by e-mail before showing up, pitting dealerships against each other. If you don't want to negotiate, you might be able to take advantage of pre-negotiated dealer prices through Costco.

You mentioned that the dealership offered you a 7.99% interest rate for your 710 FICO score. That sounds insanely high — I'd expect deals more like 2% advertised by buyatoyota.com. (Remember, Toyota Motor Credit Corporation exists to help Toyota Motor Corporation sell more cars cheaply.) You can also seek alternate financing online (example) or through your own bank.

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If there's one reasonably close to you, you could go to a no-haggle dealership. Instead of making you haggle the price downward, they just give a theoretically fixed price that's roughly what the average customer could negotiate down to at a conventional dealer. Then just do your best broken record impression if they still try to sell you dubious addons: "No. No. No. No. No..."

The last time I bought a new car (06), a no haggle dealer offered the second best deal I got out of 4 dealerships visited. The one I ended up buying with made an exceptional offer on my trade (comparable to 3rd party sale bluebook value). - My guess is they had a potential customer looking for something like my old car and were hoping to resell it directly instead of flipping it via auction.

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+1 for this. The one I used was the most friendly place I ever worked with and had real perks I could use. While the other places was giving me a run around on prices, the cars on this lot was priced clearly on the window. When I asked the sales lady why they was cheaper, she was straight up about how they got that price and what discounts where in place. In an hour I had exactly the car I was looking for lined up (they had to do a dealership trade to get it). – BPugh Mar 31 at 16:06
    
My latest car was purchased (actually, leased) from a (newly converted to) set-price Honda dealership. Good price, good buying experience. And I knew from 10 years of previous visits that their service department was very very good, so I was quite happy to get the car from them. (And they didn't even push me for addons, just pointed to the brochures laying around and left it at that.) – davidbak Mar 31 at 17:40

sadly, it is illegal in most states to buy a car directly from the manufacturer. as such, most manufacturers do not offer the option even where it is legal.

if you really do know exactly what you want (model, color, options, etc.) i recommend you write down your requirements and send it to every dealer in town (via email or fax). include instructions that if they want your business, they are to reply via email (or fax) with a price within 7 days. at least one dealer will reply, and you can deal with whoever has the best price.

notes:

  1. i believe this buying method is from the book "the millionaire next door"
  2. the laws banning direct-to-consumer car sales may go away soon. particularly if tesla gets it's way.
  3. some car dealers offer "no haggle" pricing, but there may not such be a toyota dealer in your area.
  4. there are some new business models in the used car market like beepi and carvana that might interest people fed up with the car dealer experience.
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I've used this method to purchase several cars. It works particularly well for used cars when you know what features you want but don't necessarily care about the make/model. – Justin Ohms Mar 31 at 19:23
    
@JustinOhms brilliant! i shall have to try that next time i am in the market. thanks – james turner Mar 31 at 21:32

You can buy a new Toyota from a non-dealer, but not from Toyota directly as they have no retail distribution capability.

There is no need to buy directly from Toyota if you want to get a new car without going through a dealer.

In many cases people buy new cars but have to sell them immediately for one reason or another.

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As someone who was just recently a salesman at Honda, I'd recommend buying a Honda instead :). If you really prefer your Toyota, I always found quote-aggregation services (Truecar, I'm blanking on others) very competitive in their pricing.

Alternatively, you could email several dealerships requesting a final sale price inclusive of taxes and tags with the make, model, and accessories you'd wish to purchase, and buy the vehicle from them if your local dealership won't match that price. Please keep in mind this is only persuasive to your local dealership if said competitors are in the same market area (nobody will care if you have a quote from out-of-state).

As many other commenters noted, you should arrange your own financing. A staple of the sales process is switching a customer to in-house financing, but this occurs when the dealership offers you better terms than you are getting on your own. So allow them the chance to earn the financing, but don't feel obligated to take it if it doesn't make sense fiscally.

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As others have addressed the legality in their answers, I want to address the idea of the dealership being 'a middleman'.

A dealership serves more of a purpose than just 'middlemanning' a car to a consumer. Actually, they consume a great deal of risk. Let's remember that a dealership is really an extension of the OEM, albeit independently owned and operated, the dealership must still answer to the brand they represent, if people have a bad experience with a dealership, a customer might go to another of the same brand, but more often than not they will go to the competition out of spite. Therefore, it's in the dealership's best interest to represent the brand as best as possible, but unfortunately that doesn't always happen.

While the internet has made a certain part of a salesman's role null and void, and since this is a finance (read money) Q/A site let's take a moment to consider the risk assume and therefore the value added by a dealership:

  • Test Drive. A car is a huge purchase, and while it's okay to buy a pair of shoes online without trying them on, a car is a bit different of course, we want to make sure it 'fits' before we shell out several thousand dollars. Yes, you (meaning consumers) can look at car pictures and specs online, but if you want to see how that vehicle handles on your town's roads, if it fits in your garage and/or driveway, then you need to take it for a test drive. It's not feasible for OEMs to have millions of people showing up to car plants for a test drive, right? Scalability aside, some business that is handled in automotive plants are confidential and not for the general public to know about. A dealership provides an opportunity for those who live locally to see and experience the car without flying or driving wherever the car was assembled. They provide this at a risk, banking on the fact that a good experience with the vehicle will lead to a sale.

  • Service. A car is a machine, and no machine is perfect, neither will it last forever without proper service. A dealership provides a place for people to bring their vehicles when they need to be serviced. Let's set aside the fact that the service prices are higher than we'd like, because the fact remains most of it is skilled (and warrantied) labor that the majority of people don't want to do themselves.

  • Trade Ins. It is not in an OEMs best interest to accept a vehicle just to sell you another vehicle, especially if that vehicle is from another brand. Dealership's assume this risk, and often offer incentives to do so, hoping it will lead to a sale. That trade in was an asset to you, but is a liability to them, because they now have to liquidate that trade in, just so that you can purchase a car. Sure, you could sell your car yourself, and now you would assume that risk: What if your car is not in perfect shape, or has a lot of miles for it's age? Would it do well in the used car market? What if it takes too long to sell and you miss that Memorial Day car sale at the dealer? This might be okay for some, but generally speaking most people would rather avoid the risk and trade it in at the dealer toward the purchase of a new car rather than the headache of selling it themselves.

I'm sure there are more, but those are the one's that immediately sprung to mind. Just like Starbucks, there are terrible dealerships out there and there are great ones, and very few of us venture to farms and jungles just for fresh coffee beans :-)

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Uh, yeah, but in this case the "risk" is so high that the dealers in my area (Seattle) are minting money and have been for some time. Just look at the new car palaces for BMW, Mercedes, Audi, and Honda/Toyota built in the city in the last 5 years. I wish I could live in one of Audi's service bays - they're that beautiful. – davidbak Mar 31 at 17:45
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@big You're welcome – Voo Apr 1 at 13:23
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There's more information on the site if you're curious. But the particulars don't really matter, just that it is clearly possible to do test drives without involved dealerships. – Voo Apr 1 at 13:33
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Not all of those things actually require a dealership. The financing, service dept. and trade-ins can easily be done elsewhere, for often better prices/rates than the dealer. There are independent, skilled mechanics that do warrantied service for often much less than the dealer. They are not trying to make up for missed dealer sales quotas. And for trade-ins, you can sell you car to Carmax or similar without any hassle (assuming your car runs well). No need for placing ads. A dealer only uniquely offers a place to test and buy locally. Otherwise, you'd have those large trucks in neighborhoods. – fractalspawn Apr 1 at 22:52
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I'm imaging that Tesla uses the same sort of service as the "We'll pick you up" deal from car rental companies. One "store" has a few models, when you want to test drive, they come over in the one you want, you drive it. If you like it, you place your order and get a brand new one. Or maybe you keep that one and the store orders another for test drives. I would have thought it would be better to keep the floor model separate, just like when you buy computers or TVs or whatever. That way the customer always gets an unused machine. Just speculating though. – fractalspawn Apr 1 at 22:56
  1. No, Toyota only sells through franchised dealers. Saves factory money and lowers their risk.
  2. By federal law all franchised dealers pay an identical amount for identical vehicles. HOWEVER, and this is very important various incentives and contests factory runs will change the amount of money "after incentives and rebates" by thousands of dollars per vehicle often. So dealer A may own the Camrly Le for $2500 less than dealer B After the incentives that each has earned on a performance incentive. This is known in the industry as stair step pricing and the dealers have lobbied for a "level playing field" for years to no avail. If you have a trade in shop it with CarMax and some independents on what they will write a check for and own it today. Then call around ask what the out the door price including DOC fee's all in would be on the exact unit equipment you want. All True Car, Costco, Credit union "Buyer Services" Do is get paid $500 per car by the dealer for the lead "name" generated. That's money you could keep. there isn't a Toyota store I know of that wont sell a unit for invoice less half the hold back and pass all the incentives to get another unit out the door. the "salesman/order taker is working for a $50 mini per unit in most cases and will be lucky to clear $32000 a year if he puts in 80 hours a week. Just the facts.
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You already got good answers on why you can't buy a Toyota from the factory, but my answer is regarding to the implied second part of your question: how to avoid haggling.

I found a good way to avoid the haggling at a car dealership can be simply to not haggle. Go in with a different attitude. The main reason car dealers list inflated prices and then haggle is that they expect the customers to haggle. It is fundamentally based on distrust on both sides. Treat the sales person as your advisor, your business partner, as somebody you trust as an expert in his field, and you'll be surprised how the experience changes. Of course, make sure that the trust is justified.

Sales reps have a fine line to walk. Of course they like to sell a car for more money, but they also do not want a reputation of overcharging customers. They'd rather you recommend them to your friends and post good reviews on Yelp. In the end, all reputable dealers effectively have a fixed-price policy, or close to it, even those who don't advertise it, and even for used cars. Haggling just prolongs the process to get there.

And sales reps are people. Often people who hate the haggling part of their job as much as you do.

I was in the market for a new (used) car a few months ago. In the end, it was between two cars (one of them a Toyota), both from the brand-name dealer's respective used car lots. In both cases, I went in knowing in advance what the car's fair market value was and what I was willing to pay (as well as details about the car, mileage, condition etc. - thanks to the Internet). Both cars were marked significantly higher. As soon as the sales rep realized that I wasn't even trying to haggle - the price dropped to the fair value. I didn't even have to ask for it. The rep even offered some extras thrown into the deal, things I hadn't even asked for (things like towing my old car to the junk yard).

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Very well said, a salesperson will never haggle 'first', it's always the consumer that tries to get the car for cheaper, and often get mad when the salesperson won't come down to the price the consumer wants. The salesperson states the price they are willing to sell the car for, and that's that. An educated buyer doesn't need to haggle, you know what the car costs, their commission is already built into the msrp. Do we haggle with the people at McDonalds? – BigHomie Apr 1 at 15:01
    
This is totally true. When I bought my last car, I went in having already calculated the original price, minus 15-25 cents per mile (like they charge you on a lease), minus initial decline in value from being driven at all. When you know how much the car actually costs, you don't need any of their numbers. Especially when your math is spot on. Best deal ever. @BigHomie: The difference between a car and hamburgers, though, is that all BigMacs cost the same, not more in Beverly Hills vs Inglewood. If they didn't, I'd suspect people would haggle for them. – fractalspawn Apr 1 at 23:06

Yes, nothing is impossible! :) You can buy it directly from the factory of manufacturer, but then you will have to pay for sea shipping of this car. E.g. you can buy it directly from Japanese Toyota but then you will have to pay to sea cargo ship to deliver your car in container from Japan. Since this car is already your property, before importing to US, I doubt that you would need to pay any custom fees. In the end, the total payment might be a lot cheaper that you can buy there, but you need to be prepared to all this hassle

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I'm not the downvoter, but I suspect you got -1 because this is all just logical assumptions in an ideal situation. It makes sense in dreamland (where I also like to live), that you can just show up at the manufacturers and drive one "hot off the presses", but you haven't really provided any sources to back your claim. You also don't seem to know that many Toyotas are built here in the states, likely to avoid that import fee you speak of (and to provide jobs/PR cred). With as many Toyotas as are on the road, importing all of them would be insanely expensive and slow. – fractalspawn Apr 1 at 23:14

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