Ask an expert

I am in the market to buy a new car. Honda are upfront in offering no discounts, and the Toyota I bought a few years ago was discounted by 23%.

How do I know if I am getting a good deal, in other words, what should my bargaining position be?

Barry

From the "Ask Jack" archives - 18 October 2009

Honda work on a system where everyone pays exactly the same and they maintain their retail prices are set at a very competitive up-front price. This certainly helps those who don't like to negotiate a discounted price, and you know the neighbour or mate down the road has paid exactly the same if they choose the identical model as you.

The Honda dealers are actually agents who are selling the cars on behalf of HNZ hence there are no claims about price fixing through their dealer network.

Honda also claim resale values are better for their owners and there is some truth in this as overall the product does hold its price very well. The biggest depreciation however is during the first three or four years of ownership so the value argument starts to become a little watered down if you intend keeping a Honda for say seven to eight years.

Toyota have always been prepared to talk and are reluctant to lose a sale based on price. Prices can often vary depending on the time of the month also as dealers chase monthly targets where incentives are based on a numbers game. In this scenario a dealer may be prepared to make very little or no money on a particular sale to help meet an overall sales target. Toyota are the number one selling car company in NZ and sell to a wide audience which includes the public, rental and lease companies.

Honda know their limitations and base their business on selling or leasing to the public or companies who accept the non negotiating practice. Under the current set-up Honda will never outsell Toyota as both parties see and operate their businesses quite differently.

Reliability is a given for both vehicles but I suspect Honda do have a better specification level with some models if you compare like-with-like.

If you did happen to trade a Toyota after a couple of years, you could expect a significant drop in price depending on what you originally paid for it. It will be worth less than the lowest price paid for the same model sold new. If you are a good negotiator you don't lose too much, but how do you know just how good you are until it comes time to trade up.

Go back to comparing like-with- like specification wise, work out if the Toyota is overpriced and then see what discount you can negotiate. What you have to work out is the discount worth less features in some cases.

To confuse you even more have you considered other brands such as Mazda?

They have a fantastic model range at present which means their product is sought after second hand, they are prepared to negotiate a little and offer free servicing for an agreed time.