Car Buying Negotiations Made Easy
Do you wish the car buying process
were easier? This guide will help significantly reduce the
hassle while also saving you money.
The car-buying process is about who controls the negotiating power. Since most people only buy cars a few times in their lives and the car salesman sells them on a daily basis, you are at a disadvantage from the beginning. Ever wonder why one of the first questions asked by car salesmen is something like, "How much are you looking to spend per month? This information continues to give him power during negotiations. He can use that information to manipulate you into a higher-priced car by extending the length of the loan term.
How do you place yourself into the driver’s seat? The answer is by doing research. Here are eight easy steps to getting a good car price without lengthy negotiations.
The car-buying process is about who controls the negotiating power. Since most people only buy cars a few times in their lives and the car salesman sells them on a daily basis, you are at a disadvantage from the beginning. Ever wonder why one of the first questions asked by car salesmen is something like, "How much are you looking to spend per month? This information continues to give him power during negotiations. He can use that information to manipulate you into a higher-priced car by extending the length of the loan term.
How do you place yourself into the driver’s seat? The answer is by doing research. Here are eight easy steps to getting a good car price without lengthy negotiations.
1. First, you must determine how much you can afford to pay a month including gas and insurance. A good start is to find a website that has a reverse car payment calculator. This will help you determine the price range you should consider. Insurance costs will most likely increase with a new car. Contact your insurance agent for an estimate after you have narrowed your search. Also, be sure to find out if the new vehicle uses a different grade of gas than your current car.
2. Next, do your research to know what type of car you want and the list of options you do and DO NOT want. One really good way to start this process is to identify the major aspects of a car that you need such as good gas mileage, automatic transmission, and anti-lock brakes. Knowing the options you want will help narrow your search.
3. Now it is time to research the Manufacturer’s Suggested Retail Price (MSRP), rebates, and special financing options. Manufacturers post current rebates and financing offers on their websites. Determine the offers for the type of car you are considering from each manufacturer.
4. Now you are ready to determine a fair asking price below MSRP. There are several sites that will provide estimates. The best way is to get invoice prices for the cars you are considering. Remember dealers have some hold back charges built into the invoice price which helps the dealer make money. Unless you are a skilled negotiator, do not go after these charges; just understand this when going after the invoice price. Generally, invoice price is 5% to 8% less than MSRP with the larger differences on cars loaded with options.
5.
Enter the information you have gathered into a payment or cost
calculator to determine which car will cost you the least.
Play around with the car price, trade-in value, and down payment to
find the combination that results in the monthly payment you have
already determined you can afford.
6. You need to be realistic in your estimated trade-in price; you will not get $10,000 for a 10-year-old-car with 500,000 miles. Several websites are available to help you determine a fair value for your trade-in. One good method is to get a price from each of these websites and then average the numbers.
7. Another key area to research is your loan options. Before going to make your purchase be sure to have a pre-approved interest rate unless there is a special finance package being offered by the manufacturer and you know that you will be approved for it.
8. Once you have the information regarding the amount you need for trade-in and price for the car, you are ready to talk to the dealers. Now you know exactly which car you want, exactly how much you will pay for it, and exactly how much your trade-in must get to meet your financial needs. You now have control of the negotiations regardless of the salesman’s approach. Take your financial requirements to the different dealers and see who can meet or beat them. Be aware that you will often be told that they cannot make that deal. This is usually a last-ditch effort to regain the control of the negotiations. If they make a statement to this effect, you should tell them to contact you if they change their mind and leave. More often than not, they will call you back later that day or the next and be willing to meet your prices.
6. You need to be realistic in your estimated trade-in price; you will not get $10,000 for a 10-year-old-car with 500,000 miles. Several websites are available to help you determine a fair value for your trade-in. One good method is to get a price from each of these websites and then average the numbers.
7. Another key area to research is your loan options. Before going to make your purchase be sure to have a pre-approved interest rate unless there is a special finance package being offered by the manufacturer and you know that you will be approved for it.
8. Once you have the information regarding the amount you need for trade-in and price for the car, you are ready to talk to the dealers. Now you know exactly which car you want, exactly how much you will pay for it, and exactly how much your trade-in must get to meet your financial needs. You now have control of the negotiations regardless of the salesman’s approach. Take your financial requirements to the different dealers and see who can meet or beat them. Be aware that you will often be told that they cannot make that deal. This is usually a last-ditch effort to regain the control of the negotiations. If they make a statement to this effect, you should tell them to contact you if they change their mind and leave. More often than not, they will call you back later that day or the next and be willing to meet your prices.