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How to Negotiate with Car Salesmen and Get the Best Deal

How to Negotiate with Car Salesmen and Get the Best Deal

    Like lawyers and dentists, few people actually enjoy having to deal with car salesmen.  They’re a necessary evil that often leave consumers with a bad taste in their mouths because of the tactics they employ to get people to purchase a new vehicle.  Coming out of the negotiations with a new car and a great deal on it can happen, if you go about things the right way.

    Secure Financing Ahead of Time

    When you’ve decided that it is time to buy new vehicle, instead of heading straight out to the dealership, visit your local credit union or bank and secure financing in advance.  Car dealers make a lot of their profit on financing deals, and you can save a lot of money by getting your auto loan through a reputable third-party ahead of time.  Once you’ve done this, you’re ready to head out to the dealership and take a look at the vehicles, although it is a good idea to do some research in advance and figure out which ones you might be interested in.

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    Go In Well-Rested

    You’ll want to make sure you’re well-rested on the day that you go to pick out your new car.  Don’t go when you’re rushed or overtired, or after a long day at work.  You need to be 100% there mentally if you want to come out of it with the best deal possible.

    Ask to See the Invoice

    Once you’ve found the car you’d like to purchase and the dealer takes you into his office or cubicle to begin the wheeling and dealing, ask to see the invoice.  This will tell you all kinds of information about the car, but most importantly, how much the dealership paid for it.  Keep that figure in mind as you negotiate what you’re willing to pay.  Sure, they’re going to make a profit, but knowing that number can help you lead negotiations in the direction of minimizing their profit and lowering your overall cost.

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    Just Say “NO”.

    The first thing that you need to know when it comes to negotiating the price of the vehicle you’re interested in purchasing is that “NO” is your best weapon.  Arm yourself and be prepared to use it, possibly even multiple times. Don’t let them strong-arm you or sweet talk you into something that you would not be comfortable with. Take a cue from my 18-month-old toddler and say it like you mean it (head shake optional).

    Let Them Come at You With an Offer

    The dealer will ask you some basic information about yourself, such as your name, address, and so on.  Answer honestly.  Most will start off the price negotiations by asking you how much you’d like to pay per month.  An appropriate answer to this question that will throw them off their game is “I’d like to pay zero.”  You might get a chuckle or a “wouldn’t we all” type comment before the salesman resumes his attempts to get you to provide him with a magic number that you’d be willing to pay them each month for the privledge of driving the vehicle of your choice.  They might ask you what you are paying now.  If your car is paid off, answer “Zero.”  If you are still making payments, give them an honest answer. Do not make the mistake of giving them a price you’d be willing to pay each month.

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    For your best chances at scoring a good deal, make them come at you with an offer.  No salesman would tell you that the amount per month you’re willing to pay is a lot higher than the deal that you could possible walk away with.  Car salesman get a minimal salary for hanging out at the dealership, but can make their riches in the commission they earn by selling cars. Their goal is to maximize their commission and the profit for the dealership. Your goal is to minimize their commission and the profit they make to get the best deal on your new vehicle. Get them to give you a number, and when they do, it’s time to begin negotiating.


      Bring an Extra Set of Keys

      If you will be trading in a vehicle to help offset the cost of the new one, don’t leave home without taking two sets of keys with you.  One tactic that dealers try to employ during the negotiations process is to look at your car and then kidnap your keys.  If you bring along second key they can’t hold you hostage.  Just make sure to give them the key that is a cheap copy, not one with a fancy key-fob or remote.  The idea is, if negotiations go sour and they try to hold you captive while hanging on to your keys, you can walk right out the door without having to worry about getting the key back.  They’re not expecting this, and will chase after you with promises of a better deal.

      Inform the Salesman That You Already Have Financing & Finalizing the Deal

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      Do not, I repeat, DO NOT inform the salesman in advance that you’ve already secured financing.  Keep this a closely guarded secret until the time is right.  If they know that you already have financing, it will change the way they deal with you.  The time to make the big reveal is once you’ve agreed on the final price of the vehicle.  Your credit union loan or other third-party auto financing will likely have better rates and terms than what the dealer is offering. At this point, pull out your calculator and utilize your financing details to figure out how much you’ll be paying in the end.  More than likely, it will be less than what you would have paid had you used dealer financing.

      Conclusion

      Follow this advice and I guarantee that you’ll walk out of the dealership with not only a new car, but also the satisfaction of knowing that you got the best deal you could have gotten. It feels a lot better than getting screwed out of hundreds or thousands of dollars.

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      Published on November 20, 2018

      The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

      The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

      The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

      Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

      In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

      Why Your Past Prevents You from Saving Money

      Are you constantly thinking about your financial mistakes?

      If so, these thoughts are holding you back from saving.

      I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

      It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

      For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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      How to Effortlessly Track Your Spending

      Stop manually tracking your spending.

      Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

      When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

      Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

      The Truth on Why You Keep Failing

      Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

      Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

      Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

      If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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      Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

      Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

      1. Save more than 50% of your available money (after expenses)
      2. Only buy nice things after saving
      3. Automate your savings with automatic bank transfers

      These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

      How to Foolproof Yourself out of Debt

      Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

      So how can you separate yourself from the 60%?

      By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

      This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

      For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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      Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

      A Proven Formula to Skyrocket Your Savings

      Having proven systems in place to help you save more is important, but they’re not the best way to save money.

      You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

      What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

      Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

      Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

      During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

      Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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      Transform Yourself into a Saving Money Machine

      Saving money isn’t complicated but it’s one of the hardest things you’ll do.

      By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

      The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

      Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

      Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

      What are you waiting for? Go and start saving money, the sky is your limit.

      Featured photo credit: rawpixel via unsplash.com

      Reference

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