Preparation is the key to avoiding the stress of buying a used or new car. One of the last phases in the procedure is visiting a dealership and negotiating the price. It all starts with deciding on a truck, SUV, or car through to the model options and colors.
But many people do not have the slightest idea of how to negotiate when buying a car. It’s not as challenging as you may think!
In this guide, we’ll allude to various tips and methods so you can negotiate the best price when buying a new car. So let’s get to it.
Table of Contents
Get Financing Early
Smart shoppers understand that they should never approach a car dealership without a pre-approved finance offer in hand. It doesn’t matter if it’s from a credit union, a bank, or another financial institution. It’s just necessary to have one when thinking about how to buy a car.
If you don’t, the financing department at the dealership will have no motivation to look for better terms. When you use your own pre-arranged finance, you remove one more variable from the equation.
Any loan you are contemplating must have terms that you are familiar with. Aside from the interest rate, you’ll want to know how long the loan will last, whether there are any prepayment penalties, and what fees the dealership or lender will impose.
Plenti Car Loan is a solid example of a reputable car loan provider that’s worth checking out. You can enter the showroom with a clear negotiating edge when you get a loan such as this.
Do Your Homework
Consumers today have access to more information than ever before regarding automobiles and the car-buying process. This includes a wealth of internet data on features, automobile costs, and auto loans.
On your tablet computer or mobile device, you may learn about every step of the process. You can learn about automobile bargains to trade-ins, finance, and auto insurance. Online resources offer up-to-date information that can address even the most obscure car-buying questions.
Also, if you begin your search early, you’ll be able to see if your credit has any blemishes. It might make buying a car more difficult, make it more expensive, or make leasing a vehicle impossible.
Ensuring an automobile is not the same for everyone. Even within the same class, repair prices can be drastically different. Obtaining insurance estimates when looking for a car can help you avoid sticker shock after you’ve already committed to a costly-to-insure new or used vehicle.
If you have done adequate research, your ability to negotiate should improve. You can use your knowledge of current prices of used and new car models that you’re interested in, to your advantage. This way, you might be able to shave off more dollars than the average joe rocking up with no prior knowledge.
Remember It’s Business
It’s simple: you’re looking for the best deal on buying a car you desire. The dealership and its salespeople are attempting to maximize the profit from the vehicle’s lease or sale. There’s nothing wrong with either side as long as you both act in a professional and ethical manner and by following the law.
But the issue is that It’s easy to fall in love with a car that’s new to you. Car salespeople want you to develop an emotional attachment to the vehicle you’re considering purchasing or leasing. When they know you’re set on a particular car, it makes their work a lot easier.
Furthermore, a few salespeople will try to persuade and even threaten you into accepting an offer that is bad for your bank balance. That’s why, even if you don’t see it, it’s critical to have a friend with you who can.
Wherever you are in the car-buying process, being polite and level-headed is what it’s all about. For example, the test drive is an opportunity for you to familiarize yourself with the vehicle rather than demonstrating your ability as a high-performance driver. Showing off during a test drive will get you kicked out of a dealership, and your hard work in negotiating a deal will be for naught.
Don’t Focus on the Monthly Payment
A car payment that falls into your monthly budget is essential, but focusing just on the monthly payment is the quickest way to acquire a lousy deal.
A car payment that falls into your monthly budget is important, but focusing just on the monthly payment is the quickest way to acquire a bad deal.
If a salesperson can keep you focused on the monthly payment, they can play with the other figures in the transaction to generate more profit. You will pay significantly more and will never understand you got a bad deal in the long run.
Instead, consider the overall cost of the vehicle, including financing, fees, and add-ons. You multiply the monthly payment by the number of months left on the loan. Then add the value of your trade-in, any down payment, taxes, the cost of add-ons, and fees to get at that figure. The amount represents the vehicle’s actual cost.
Extending your loan for five, seven, or even ten years is a frequent ploy that lowers your monthly payment but increases the overall amount of interest you’ll pay. You’ll face the risk of having pricey repairs on your aging car while still making car payments, in addition to the extra interest.
The longer the loan, the more likely you will have an underwater loan, meaning you owe more on the vehicle than it is worth. Long-term vehicle loans are a bad deal in every aspect.
Thus, work out precisely what you are willing to pay and don’t budge! Don’t feel bullied if you have to take time to work out the numbers. After all, you are the buyer and supplying that salesperson with their next paycheck and commission.
Get the Timing Right
You won’t receive a good bargain on a car if you arrive at the dealership soon before closing time. It’s an urban rumor that if you arrive late, they’ll give you a good deal so they can lock the doors and leave.
You’ll most likely annoy them to the point where they’ll ask you to leave. However, if necessary, an ambitious salesperson might stay all evening. But this will put pressure on you, and you’re thinking might not be so clear in such a scenario.
Looking at the calendar is a better approach to time your lease or purchase. Car dealerships and their salesmen, like many other businesses, receive commissions and bonuses based on the end of years, quarters, and months. Buying a car near the end of those periods increases your chances of getting a good deal. Of course, this is true only if the salespeople and their dealership haven’t already achieved their objectives.
To make the most of your time there, it helps if you are ready to go and have finance in place. If you miss the end of their bonus period by even one day, they will lose all incentives to provide you a better deal.
Go to More Than One Dealer
Getting quotes from several dealerships used to be a major pain. It’s straightforward, and it helps you avoid one of the most typical car-buying blunders: getting quotes from only one dealership.
You may compare pricing on a car by collecting quotes from several different dealerships. It doesn’t harm if salespeople are aware that they are competing for your business.
Today, it’s much easier because you don’t have to leave your house. You can seek offers and barter back and forth by visiting different dealers’ websites and opening up dialogues with their online sales managers. Most dealerships now have robust internet sales systems, thanks to shutdowns caused by the coronavirus outbreak.
Check with dealers in areas where the automobile you want may not be as popular. For example, a Toyota dealer in the outback might have a hard time selling Priuses. On the other hand, a downtown dealer might wish to get rid of large trucks that take up half of their lot.
Even if you find the ideal trim, model, and color at one dealer, make sure to get quotes from multiple dealers for that exact configuration. Dealerships often trade vehicles, so you may find yourself with many options for purchasing the same car.
Avoid the Extras
You’ll be hurried into the dealership’s financing office just as you think you’ve reached a price agreement and are nearing the end of the car-buying process. The financing and insurance office can be a dangerous area for your bank account if you’re not vigilant.
It’s here that they’ll push you to buy extras. Some are inexpensive, while others are in the thousands of dollars. There is a sense of urgency because the dealer wants to include the add-ons in the purchase and maybe include them in your financing. They’re great at selling stuff, and they may make it seem like you need things like gap insurance before you can leave the dealership.
The majority of the items you’re offered are accessible through third-party companies outside of the dealership. They are available for purchase at a lower cost elsewhere. Even if you have to buy it at the dealership, they’ll be more than happy to sell it to you months or years later anyway.
How to Negotiate When Buying a Car Well
The key to knowing how to negotiate when buying a car is preparation and knowledge. If you enter a car showroom with your finance in place right at the end of the commission window, your changes should look good.
But overall, please spend time following our other advice and doing your homework. It will save you lots of money and loads of hassle!
Thanks for reading, and please check out our other blog posts for more informative reads.