How To Get the Best Price For a New Car — 5 Techniques
In an ideal situation the dealership should be on your side at finding the right vehicle at the right price. However, some car dealers place more emphasis on profits rather than customer service or satisfaction. When you are buying a new car, keep your interests in front at all times. By avoiding common traps that can cost you extra money you will get the best bang for you buck. Here are five tips to get you on your way to owning the best car for your budget.
Do your homework: Most dealerships will prey on the unprepared. Going into the showroom "green" — without the requisite facts and pricing data — will give the salesperson much more control over the purchasing process.
You need to thoroughly research your choices. Gather a wide variety of reviews from websites such as Yahoo Autos!, Edmonds.com or MSN Auto. You want to check the reliability, safety, fuel economy and pricing of any models you are thinking about. Do not put this off until the day you plan to go to the dealer for a test drive.
Research and determine what the trade-in value of your current vehicle is to determine its approximate worth. This will depend on the vehicle's age, condition, mileage, options and other equipment along with where you trade it in.
Do not assume that the sticker price is the asking or purchase price. To get the lowest price, start with the cost of the car for the dealer, which can be found on such sites as Kelley Blue Book. What you are looking for is referred to as the dealer invoice price. However, this is not necessarily the price that the dealer paid for the vehicle. In most cases there are often behind-the-scenes bonuses, such as dealer incentives and kickbacks, which give dealers a higher profit margin.
A reasonable price to start negotiations is between 3 to 6 percent over the dealer invoice price or wholesale price. If the model is in high demand, you may have to start with 8 percent and go from there. Keep in mind you can get a lower price through effective negotiation at the dealership.
Negotiate one item at one time. Salespeople often will mix in financing, leasing, and trade-in negotiations together, often asking you to negotiate around a monthly payment figure. This approach will put the power of negotiation into the hands of the dealer. This type of approach will give the dealer more latitude to offer you a favorable number in one area while inflating terms in another.
Make it clear from the get-go: You want the best possible markup over your starting price. Mention that you intend to visit other dealerships selling the same vehicle and you intend to buy from the dealer that gives you the best price.
After you have determined and agreed to a price, now is the time to talk about financing, trade-ins or leasing. If you are met with interference, you can leave at any time. Sometimes heading for the door is a sure way to jump-start a slow-moving negotiation or bring a lower offer.
Have your financing preapproved in advance. This can be done through banks, credit unions and loan organizations — then compare what the dealer has to offer.
Do not pay for extra accoutrements that you may not need. Dealers will often try to lure you into to extra services such as rust-proofing, fabric-protection and paint protection. They may also try to push VIN etching on your windows to deter thieves, it doesn't work. Most of these things to not work anyway — do not get them.
These services and fees are unnecessary. If the items are listed on the bill of sale, cross them off. Most new, modern cars do not have rust problems. You can treat upholstery yourself or get your own paint protection for much less than what the dealer charges. You can also get your own VIN etching kit for anywhere from $25 to $100 and do it yourself.