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Clear & Simple Home > Singles > Buying a Car > Scoring a Good Deal
Scoring a Good Deal**
Researching cars is one thing - negotiating with a car salesperson is a
whole other ballgame. But if you follow a few basic guidelines and some handy
tips, you'll be fine - and you might just get yourself a good deal.
You're in the driver's seat: Whatever it feels like on that
showroom floor, remember that you have all the power. If you don't like
the salesperson you're talking to, or if you're not getting the price you want,
you can always walk away. There's always another dealer down the street.
Even if you don't want to walk away permanently, don't be afraid to walk
away temporarily. Go home and sleep on it. Don't give in to dealer pressure -
they're not the ones who'll be paying the monthly tab, you are. You have every
right to move at your own pace.
Know your stuff: The more you know when you walk into the
dealership, the better off you'll be. That doesn't mean you need to be an
automotive engineer just to get a good deal, but if you know what make and
model you want, and what options, that limits the amount of selling you'll be
subject to. If you can focus the conversation on price, you reduce your risk of
being talked into a high-end options package that you just don't need.
Negotiate like a pro, even if you're not: No question about
it, negotiating price with a car dealer is one of the most stressful things
you'll ever do. Just remember to keep your cool and remember the following
tips, and you'll be fine.
- Don't get excited: If
a salesperson catches you drooling on the hood, you've just lost a little
negotiating power. Keep your emotions in check, and the onus is on them to
give you a reason to buy.
- Don't talk about
financing: Tell them you're paying cash - they won't hold you to
it. If you agree on a price before you work out the payment plan, the
dealer has fewer avenues by which to inch up their profits.
- Take your time:
The salesperson is there all day anyway, so he may try to tire you out.
Stay strong, keep negotiating, and you might save some money. An extra
hour of persistence could save you a few hundred dollars.
- Watch out for good
cop, bad cop: You know the drill - Sales Guy says if it were up
to him, he'd give you the price you're asking for, but he needs to
ask his manager. Now you're thinking Sales Guy is on your team, right?
He's not. It's you vs. them, don't forget that.
- Ask to see the
invoice: That'll tell you how much they bought the car
for. If they won't show you that, it's probably because they're offering a
lousy deal.
- Shop late in the
month: Dealerships get bonuses and rebates from manufacturers
based on monthly sales quotas. Depending on how your dealer's doing, you
might find a little more leeway as the 30th approaches.
- Don't haggle if you
don't want to: Some dealers - Saturn, for one - don't negotiate.
It's the same price for everyone. If you really don't like haggling, that
may be your best bet.
Let's talk price: Look, car sales is a business. Nobody's
going to sell you a car if it's a bad deal for them. So you'll need to find a
price that works for the dealer - but that doesn't break your budget. Find that
fair price, and you'll drive home in a new car.
When you do start talking price, there are some terms you should know:
- Invoice price: We
mentioned this above - the invoice tells you what the dealer paid the
manufacturer for the car. Do some Web research - if you can find out what
the dealer paid, you'll know where that fair price begins.
- MSRP - Manufacturer's
Suggested Retail Price: That's the "sticker price," the
number on the car's window. It's not a price tag, it's a starting point.
Of course, if the model you want is in high demand, you probably won't get
much lower.
- Dealer incentives: Manufacturers
sometimes give dealers extra money, bonuses and rebates for selling
overstocked and undersold cars. Find out if the car you're interested in
buying has any dealer incentives attached to it. Then subtract that amount
from the price you're willing to pay.
So how much should you pay? Obviously, it's impossible to do your
negotiating for you, but if you offer somewhere around $200 more than the
invoice price, minus any dealer incentives, you've probably started a good
negotiation. You may not get that price, but it shows you know what you're
doing.
Beware the add-ons: Once you've settled on a price, the
dealer will probably offer all kinds of add-ons - anything from an extended
warranty to detailing the car before you drive away. Feel free to refuse these,
even if they try to include them automatically. Most are optional:
- Destination charges
: Some manufacturers charge separately for shipping the
vehicle to the dealer. You can't get around this. But check the sticker to
make sure it wasn't already included in the price.
- License and
registration : Also unavoidable, but call your state's Department
of Motor Vehicles to make sure the dealer hasn't padded this fee.
- Extended warranties: Also called service contracts. If you buy a car with a good service
history, this shouldn't be necessary.
- Dealer prep: In other words, getting the car ready for you. The dealer gets paid for
this. Don't pay twice.
- Credit insurance: This insurance pays off your car loan should you die while leasing it. As
long as you have life insurance, don't worry about it.
There are others, too. Just be assertive. If you don't understand what the
add-on is for, ask. And if you don't have to pay a fee and you don't want to
the fee...don't pay the fee.
When it seems as though a price compromise is inevitable, ask for more. Ask
to throw in the floor mats. Ask for some small extra you want on the car. You
won't get it if you don't ask. So what do you have to lose?
One more step: Make sure everything's in order. You've
worked hard to negotiate a price - now take a minute, or an hour, or overnight,
to be sure that you can afford that price. Include financing and gas and
insurance. Check it all against your budget. If you can't make it work, don't
buy the car! Period.
The salesperson will flip. You'll feel lousy. You'll probably be completely
disappointed. But none of those things is worse than screwing
up your financial future. You'll get through a little disappointment - a lousy
credit rating will burden you for years to come.
**Content courtesy of Visa's What's My Score  program. |
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