Proper knowledge and negotiation skills can help you save thousands of dollars on a new vehicle. With the power of information, you can shop for cars, get a cash offer on your trade-in, and set up financing before visiting a dealership.
Dealerships try to make extra money by selling extras like tire protection plans, paint and interior protection plans, VIN etching, and gap insurance. These add-ons are often unnecessary and overpriced.
Know Your Limits
Dealerships often try to sell unnecessary and overpriced extras, like tire protection plans, anti-theft protection, infotainment upgrades, VIN etching, and even warranties. It’s best to avoid these add-ons.
Also, when dealers ask you for your maximum budget, please don’t give them a number they can use against you. Instead, make your first offer slightly lower than your limit to show you’re serious and willing to negotiate. This will help you create room for a better deal. Then, you can always decide if you want to move forward or walk away. This is important advice to remember during the negotiation process, whether in person or via email.
Know What You Want
Dealerships juggle purchase prices, trade-ins, and financing terms and sell extras like interior stain protection, anti-theft devices, and rustproofing. Dealerships can also tack on document fees, advertising, and preparation fees. It’s best to start negotiations with the price of the vehicle itself and include all taxes and fees in that figure.
Then, you can compare that with other dealerships’ online quotes. Often, dealers ask what your maximum budget is, but don’t give in to that question. Instead, tell them you want the most value for your money. This allows you to walk away without feeling embarrassed or hurting the salesperson’s feelings.
Be Prepared to Walk Away
You should always know your walkaway point, usually in the form of a number. This is a crucial step to take before entering any negotiation. It will help you remain confident during the process.
If you get into a situation where making the deal would compromise your values or integrity, it’s best to walk away. There are plenty of other opportunities that will come along.
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Don’t Let Your Emotions Get the Better of You
Buying a car can be exciting, frustrating, and exhausting. It’s important not to let your emotions get the better of you, especially during negotiations.
For example, if a salesperson begins discussing monthly payments and how much you can afford to pay each month, bring the conversation back to the price of the vehicle. Using your knowledge and negotiation skills can help you negotiate a lower price.
Ensure the car’s final price, including all fees and taxes. Also, be prepared to walk away from dealer-installed add-ons if you can’t negotiate a reasonable price. These items typically come with substantial profit margins for dealerships.
Know Your Credit Score
Dealership salespeople must meet quotas at the end of each month, quarter, and year. They often target shoppers nearing the end of their percentage and encourage them to buy an extended warranty for a higher price.
It is essential to check your credit score before heading to a dealership, which can be done free of charge through online services. This will help you understand the key factors influencing your score and give you insights into which products, such as credit cards or mortgages, may best suit your financial situation. It will also allow you to compare offers from different lenders.
Before you head to the dealership, do your research. Learn about the vehicle you’re interested in, including resale value and cost to own. Gather the information in advance and print it out for use during negotiations.
Dealerships often try to bundle trade-in and new car prices, which can deceive shoppers. Instead, negotiate both separately and be sure to compare prices online.
Additionally, don’t let dealers talk you into buying add-ons like tire protection plans or infotainment upgrades. These extras are usually unnecessary and can be purchased cheaper elsewhere. Shop around to make dealerships compete for your business. This can help you get a better deal on the car and more manageable loan terms.