Negotiating a Deal
Information is the key to negotiating a good deal. Without it, you'll end up paying a lot more for your vehicle - sometimes thousands of dollars more! Here are a few tips to help you negotiate a better deal.
1. Research the wholesale and retail cost of a car prior to visiting any dealership.
Information is power. If you don't know the approximate retail and wholesale price of a car, sales people can tell you anything. Even if a car has an official looking manufacturer's "invoice" posted on the window, this doesn't mean the price listed is the actual price. More than likely, this "invoice price" listed on the vehicle already has dealer margins built into it. Don't let a sales person fool you into thinking the price listed is the minimum sales price. If they can get you to pay the sticker price, chances are, you're paying hundreds - maybe even thousands of dollars more than necessary.
To research the wholesale and retail cost of any new or used vehicle, visit the links below:
2. Always be willing to walk away from a deal.
A salesperson knows once you walk away from the dealership, the chances of closing a deal is slim to none. That's why they use several tactics to keep you at the dealership as long as possible. One such tactic is securing a check from you for a minimal amount (like $25-$100) as a "good faith" down payment as part of the initial negotiating process. Don't fall for it. If you feel like you're being pressured to make a deal on the spot, walk away. If the salesperson wants to make the sale badly enough, he may change his tune and start making better counter offers. If not, have the courage to walk away - you can always get the car you want from another dealership. If you have your heart set on a particular make or model, try to line up at least 2 or 3 different dealerships that offer the vehicle you're interested in. This will prevent you from feeling you must try to hammer out a deal to purchase a car right then and there.
Sometimes timing can play a major role in getting you a better deal. Dealers and sales people need to make monthly sales quotas. By shopping at a dealership near the end of the month, you may find that salespeople are more willing to give you a better deal.
4. Deal with one item at a time
One of the best tactics of sales people is confusion. Sometimes sales people will try to mix the negotiation of a trade-in with the price of the new vehicle at the same time. By doing this, they can confuse you on the actual price of the vehicle. Separate the transactions and negotiate the price of the car first. Once this is done, then negotiate the price of the trade-in. Remember, if you already know the wholesale and retail values of both trade-in and your potential new car, your ability to negotiate the best deal will be enhanced. (see item #1 in this article). By keeping transactions separate, you'll be able to keep your focus and ultimately get the best prices possible.
5. Negotiate the price of options.
At this point in the deal, most consumers have already completed the price of a vehicle and the trade-in values. They relax and feel the deal is over. So when a dealer asks about additional options that you may not have considered (such as extended warranties, upgraded floor mats, etc), most people simply agree to the pricing. Add on options represent a significant source of revenue and you should always negotiate the pricing of these options as well.