Let’s face it. Buying a car is scary and entirely too grown up (where did the years go?). Negotiating the price could be an intimidating process and many of us balk at the idea of going alone. But if you have a set plan in place, you’ll walk out of the dealership feeling loads better than you would if you bought the car for sticker value. All you have to do is follow these general rules.
You have to do your research.
There are loads of websites you can visit to find the average price the car is offered. Check Kelly Blue Book to see the average price the car is offered in your area. Or you can try TrueCar, which is a site that lets you compare what other people actually paid for the vehicle you’re researching. You can also look up the website of any dealership and get an online quote. You can get these quotes from multiple dealerships and take them into your negotiations. If the seller thinks they’re competing with other dealers, they’ll be more likely to consider a better price.
Review all promotions.
We see it in commercials all the time. Rebates and cashback offers are great incentives to get you into the door. And in the end, they could knock off a couple thousand off the final price. But that’s just the thing; don’t let the dealer subtract the deals until the very end. You don’t want these additional numbers to throw off the process. If they start subtracting these deals before your grand total, you’re not going to see much savings. They still have to add on the prices of the all the fees and taxes, which could really bump up your total.
Have a budget in mind.
If you’re already pre-approved for a loan through a bank, congratulations! You have a set budget you know for a fact you can’t go over. Don’t let the dealer know how much the loan is for, because they’re going to push it to the limit. Let them know the very lowest you’ll spend without offending them, and the very highest. But keep a few thousand to yourself because not only will you have to pay for the price of the car, but you’ll also have to pay the fees as well. Licensing, sales tax, and destination fees will increase your grand total at the end. And, if you give them your max budget before they add all those fees, you’ll be writing two checks. One from the loan, and the other from your personal checking account.
Don’t listen to the dealer when they start talking about monthly payments.
It’s a trick, I swear. The first thing they’re going to tell you as you sit down is how low they can get the monthly payments. They’ll make the payment look small, but in the end you’ll be paying more. In order to lower the monthly payment, they’ll have to extend the term of the car loan. Just kindly inform the dealer you’re not interested in the monthly payments until you have a set price. Also, try to stay away from getting financing from the dealership all together. They’re looking to make a profit, and as much profit as they can. Check out credit unions. They offer loans with competitive interest rates which could save you money.
Make a counter offer.
This is where you bring out all your research and your bottom offer. They’re most likely won’t accept your offer, but you need to stay firm. Let them know you’ll leave with the car that day if they accept your offer. Also, inform them you’ve already gone to multiple dealerships and you know you’re giving them a reasonable price. If they aren’t interested, increase it by a few hundred.
Ignore “Employee Pricing.”
Another trick a seller could use would be giving you the “employee discount.” They will make it seem like that this offer would be the absolute lowest they could ago. The offer is bogus. It’s likely a number they made up on the spot. Employees pay whole sale values, so you’re never going to get a price as low as that.
Be strong against the Good Cop/Bad Cop scheme.
If you’re being firm with your offer, the dealer will most likely enlist the help of his manager. One will play the good cop and explain to you that they are really making a good deal. The other will play bad cop and try to pressure you into walking if you’re not interested, or that they sell the car for that price all the time. Don’t fall for it. Increase your offer another couple of hundred dollars and leave it at that.
Don’t become emotional.
You’ve test-driven the car and you’re in love with it. But don’t let the dealer see that! They might mistake you as desperate and will be less likely to budge on their offer. Also, don’t become aggressive or angry. In every situation, somebody will be more likely to assist you if you’re kind and friendly. A hostile negotiation will make everyone uncomfortable and ruin the process.
Don’t be afraid to walk.
If they aren’t offering you what you want, walk away from the deal. There are other dealerships that will be willing to work with you.
If you do your research, go in with a plan, and hold firm, you’re going to enjoy the benefits of not overpaying for your car. And you’ll walk out feeling like a badass.