Buying a car is a stressful event. Most people don’t get near enough experience doing it to be comfortable, and short of your home it is the largest expense most people have. So how should you do it? How can you get what you want while securing the best deal? We are going to break down the steps and get you through it, and when we are done, hopefully you’ll feel a bit more comfortable with the process.
First, let’s talk about your motivation. Pretty simple right? Get the best car at the best price. Although I want you to think about it with this little nuance. The ideal transaction is one where everybody wins. In honest sales, that is always true. It is not your goal to “beat” the dealer or “win” in securing a deal that damages the dealer. It is important to note that simply because that is your attitude, does not mean it is shared by the dealer.
Most if not all dealers are in it to “win.” Dishonest dealers can use a whole slew of tricks, misdirection, and downright lies to manipulate you out of extra money. It is your job to come in prepared to navigate through those to either secure a car at a good price, or identify the need to buy elsewhere.
Be Ready
The most important step in getting a win for you in a car purchase is to be prepared before you ever cross the threshold of a car dealership. Your preparation starts at home. First, you have to set a budget for the purchase. Decide in advance how much you can spend and make the firm decision to stick to that. Find a car that works with your budget, don’t bend your budget to fit the car you want.
Next, you need to do lots of research on cars that will both suit your needs and fit within your budget. Check out how reliable vehicles are, how much they cost to service and maintain, and what price you should expect to pay whether new or used. If you go in knowing what you want and what that is worth, it gives you significant power in discussions with a sales person.
The last thing you need to do before heading to the dealership is to get your financing squared away. The best rates can almost always be found by working directly with the bank. Putting the financing in the hands of the dealer can leave room for them to take advantage of you by manipulating the numbers or taking advantage of your lack of knowledge of the system. When you work in conjunction with the bank, you remove significant power from the dealer to tinker with your deal.
Once you’ve gotten your financing squared away, it is time to head to the dealership for the fun part! Looking for the car you will purchase.
At the Dealership
Take a buddy
When you arrive at the dealership, it is best to do that with another person. This is wise for several reasons. First, being there alone might make you more vulnerable to the pressures applied by the sales people. Second, having another person there can allow them to fill the role of the naysayer. That sounds a little silly, but the sales person’s job is to make every part of the sale sound like sunshine and rainbows. Since that is rarely an accurate picture, having a person who can act as a foil there is useful.
Go at the right time
You are not always able to control when you are looking for a new car. Sometimes an accident or vehicle failure dictates that you go right away. However, if you have the ability to decide when you shop, you can be selective about when to go. That can possibly mean a much better deal.
Sales staff work on commission. There are often bonuses that kick in based on the number of vehicles they sell in a month, or over a weekend. What does that mean for you? Well, it means that your best bet to get a great deal is to head to the dealership during the last weekend of the month. That way, if you are working with a sales person who is trying to hit the next bonus tier, they have a lot more incentive to sell you a car at a lower price, because it could mean big money for them, while still saving you money!
It is also a good idea to shop for a car when other people aren’t. Winter months can often be lean for car sales, so if you are able to do your shopping then, you may find the opportunity for a better deal is easier to come by.
Get the sales person to name a price first
Once you’ve found a vehicle that you are interested in, you’ll want to determine the starting price for your negotiations. You do not want to name the price yourself, however, because that can lead you to over pay. It is best to ask directly how much they are asking for the vehicle. This gives you a clear starting point to negotiate from.
Don’t Buy Extended Warranties
You need to buy a car that is reliable and will hold up over time. An extended warranty is often expensive and still may be very limited in what it covers. Most quality vehicles have a good manufacturer’s warranty that will cover you adequately for the kinds of things that would be major concerns.
Negotiate Fairly
If you’ve done your research, you should know what a dealer will expect to get for a car. While it is fine to be a tough negotiator with regard to your price, you cannot simply pitch out any price you like. For example, if the dealer has a vehicle is priced new at $25,000 and the invoice price is around$22,000, it is not beneficial to offer $15,000. Such a low offer makes you seem like you cannot be taken seriously. Make sure that you are firm in your negotiations, but do so reasonably. Also, don’t negotiate based on payments. As an added note, always negotiate around purchase price, not monthly payment.
Don’t talk about your trade-in
Even if you plan to trade in your vehicle, keep that information to yourself during the negotiating process. Once you have negotiated the best price that can be agreed upon, then you can bring up your trade-in and have the value you would receive from that credited toward the already agreed upon price.
Leave the Lot
It is always a good idea to leave the dealership before making a decision or purchase. This puts you in a position of power, because it lets the sales person know that they are competing for your business. Let them know right up front that you have several appointments with other dealerships, and once you have negotiated a price to a point you are content, let them know that you want to check out some of the other options before coming to a decision. This gives you a great deal of leverage, and can result in phone calls in your absence that might include much greater willingness to work with you on the price.
Test Drive the Car
This one is a no-brainer. You need to get behind the wheel and drive the car before you buy it. Finding out you don’t like how a vehicle handles or feels is something you should do long before signing paperwork. You also need to be paying attention and listening for odd noises, or any other strange things that could indicate an issue with the car.
Check the controls and all the gauges to make sure they are working properly, let the car idle to determine that it is doing so smoothly and quietly, and make sure to test the brakes and acceleration. If all these things check out, you can feel much more confident about your purchase.
Read the Fine Print
When you’ve done your comparison shopping and settled on the vehicle and price, it will be time to sign the paperwork. If you’ve done like I recommended and financed through the bank, you will have removed a lot of the hazard of overpaying from the equation. The financing department at most dealerships is actually another phase of the sales process. They will often try to manipulate the numbers to the point where your payment may match what you negotiated but overall, you end up paying more.
If you read all the fine print and know what you are signing, this can be minimized. Be firm and clear about what you want, and cross out things that don’t line up with what you have asked for. Do not assume that your sales person is on your side. They may be a person of integrity, but if you don’t do your own due diligence, you leave yourself open to get burned.
If you have financed through the bank, you can simply let them know that you will be paying with a cashier’s check. It makes things much easier!
Like any significant purchase, going in with enough knowledge and preparation is the primary thing that is needed to be successful. Hopefully, but following these pointers, you will be able to secure a car at the best deal for you!