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.
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.
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.
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
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.
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.