Deal or No Deal—Leverage Like a Pro to Get the Car Price You Want
August 25, 2023
7 min read
The sights, smells, and sounds of the car dealership greet you like an old friend as you pull open the glass door. You're here for one reason and one reason only—to score the car of your dreams at a price that won't wipe out your savings. But between you and that shiny new ride lies a challenge greater than any road trip; the dreaded negotiations with the dealer.
Don't break a sweat! With the right maneuvers, you'll have the negotiating chops of a pro and drive away in the car you want at the price you can afford. This article will equip you with expert negotiation techniques to transform you from a mild-mannered car buyer to a savvy deal-making master.
Understanding the Basics of Car Buying
Purchasing a car, whether it's your first or fifth, can often be a daunting task. However, understanding the basics of car buying can make the process smoother and more enjoyable.
1. Identify what type of car you need.
The first step in the car buying process is identifying what type of car you need. This will depend on various factors such as your lifestyle, budget, and personal preferences. For example, you may need an SUV or minivan if you have a large family. On the other hand, if you're a city dweller who primarily uses the car for commuting, a compact car might be a better fit.
2. Do your research.
Familiarize yourself with the different models, their features, and prices. Various online resources can provide detailed information about any make and model. Check reviews from experts and owners to get a balanced view of the car's performance and reliability.
3. Decide whether you want to buy a new or used car.
Each option has its pros and cons. A new car will have the latest features and a warranty but depreciate faster. A used car can be of great value, especially if it's well-maintained, but it may require more maintenance and repairs.
4. Consider how you will finance the car.
You'll need to secure a car loan if you're not paying cash. Shop around for the best interest rates and terms. Keep in mind that the total cost of owning a car goes beyond the purchase price. You should also factor in insurance, maintenance, fuel, and potential repair costs.
Key Negotiation Strategies
When it's time to start negotiating on price and terms, having the right strategies and tactics can make all the difference between scoring a great deal or overpaying. Follow these pro tips to strengthen your position at the bargaining table:
1. Start with a low offer.
Begin negotiations by making a low initial offer, at least 10 to 15% below the car's fair market value. Throwing out this first low number helps anchor the rest of the negotiation closer to the price range you want to end up in. Make sure your opening offer is realistic by researching fair prices for the make, model, and year online first.
2. Point out competitive offers.
As bargaining continues, mention better prices or offers you've received from other dealerships for the same vehicle. Provide printouts of quotes, emails, or other proof to back up your claims. This pressures the salesperson to match or beat the competitor's deals. Leverage their desire to make the sale against the competition.
3. Bundle negotiation points.
For maximum leverage, try bundling the sale price, trade-in value, extras like an extended warranty, financing rates, and fees into a single package deal. Negotiating multiple things together versus individually gives you more bargaining power overall.
4. Use incentives.
Take advantage of any current cash rebates, 0% financing promotions, or other incentives from the manufacturer as ammunition to further lower the price. If dealers won't discount the car, get them to apply incentives as savings off the final price.
5. Hold your position.
If the dealer is unwilling to sweeten their offer or move closer to your number, stand firm and refuse to negotiate further—ensure you have a budget or price point you won't exceed. Don't bid against yourself if additional concessions aren't offered.
6. Walk away if needed.
Don't fear walking away from negotiations if you aren't getting the deal you want. Being willing to leave shows the dealer you won't cave to pressure tactics or intimidation. There's a good chance they'll ask you to return to continue negotiating.
Negotiating for Extras and Add-ons
When purchasing a new car, the negotiation process doesn't end at the sticker price. Extras and add-ons, such as extended warranties, paint protection, or upgraded audio systems, can significantly increase the final cost of your vehicle. However, you can negotiate these extras with the right approach to ensure you get the best deal. Here's how:
1. Understand the value of extras.
Firstly, it's important to understand what these extras are and their actual value. Car dealerships often market these add-ons as essential, but this is not always the case. Some extras like VIN etching and paint protection might sound appealing, but they may not be worth the additional cost.
2. Deal with unwanted dealer-installed accessories.
If the car you're interested in comes with dealer-installed accessories, you don't want—you can either request them to be removed or negotiate a deeply discounted price for those items. Remember, these add-ons are a major profit center for car dealers, so they have room for negotiation.
3. Find the perfect timing.
When it comes to negotiation, timing is everything. If you're ordering a special vehicle, make sure to do the negotiating before you sign the contract. On the other hand, if the dealership has already installed the add-ons, they might be more willing to negotiate the price since removing them could be difficult.
4. Leverage wholesale cost research.
Another effective strategy is to research the wholesale cost of each item and use this information during your negotiations. For instance, if a dealer is charging $2,000 for accessories that you know only cost around $600, you have a strong argument for a price reduction.
5. Know when to say no.
Don't be afraid to say no. If the dealer insists on including extras you don't want or need, be firm with your refusal. Remember, you're the customer and have the final say on what you're willing to pay for.
Finalizing the deal
Closing the deal is the culminating point in the car-buying journey, often holding as much weight as the initial decision-making steps. It encompasses contract finalization, financial arrangements, and a clear grasp of the associated terms of your new purchase. Let's delve into the essential steps:
1. Review the contract.
Before you sign anything, make sure to review the contract thoroughly. It should include the agreed-upon price, any extras or add-ons, the terms of the warranty, and any other specific arrangements you've made with the dealer. Feel free to ask for clarification if you see any charges or conditions you need help understanding.
2. Arrange for financing.
When it comes to financing, you have a couple of options. You can either arrange a loan through your bank or credit union or finance through the dealership. While dealership financing can be more convenient, it's not always the best option. Make sure to compare rates and terms before making a decision.
3. Read and understand the terms and conditions.
The terms and conditions of your purchase can vary significantly depending on the dealership and the manufacturer. These may include service requirements, warranty details, and return policies. Be sure to read and understand these terms before finalizing your deal.
4. Receive your new car.
Once everything is in order, it's time to take delivery of your new car. However, before you drive off the lot, make sure that the car is in the promised condition and that all agreed-upon extras have been installed. If you notice any issues, address them with the dealer before you leave.
Wheel and Deal Like a Pro Today
Buying a car is one of the biggest purchases many people will ever make. While the negotiation process may seem intimidating at first, arming yourself with the right knowledge and techniques puts the odds in your favor. Apply the tips in this article to keep more money in your wallet without compromising on the car you want.
With the skills of a pro negotiator, you'll drive off the lot feeling like you outmaneuvered the dealer and got the deal you deserve. Now get out there, negotiate with confidence, and enjoy the open road in your exciting new ride!
