Purchasing a new car is always a big deal. Automobiles are big purchases, and many of us are uncomfortable with price negotiation. However, the last thing anyone wants to do is pay more than they have to for an item. If you are in need of a new car, follow this strategy to make sure you get the best possible price.
1. Determine how much you’re willing to spend
You should first set your budget. Whether you plan on financing the purchase or paying for it outright, you need to now how much you’re willing to spend so you don’t get sucked into a bigger purchase than you need. Once you’ve made a decision, you have to stick to your guns.
2. Test drive, but don’t buy
It doesn’t matter which dealership you go to. Once you know your pricepoint, you can also determine what cars you are interested in. Go to a dealership and let them know that you’re looking to buy a car within 30 days and you are test driving the competition so you’re not about to drive off in any of their cars. If you plan on trading in an old car, don’t drive that car to the dealership. This helps insure that you won’t be pressured into making a purchase because the salesperson gave you a great pitch and “the perfect deal”. Don’t forget that this “great deal” is the standard deal that they give everyone. Grab a brochure and figure out what options or trim of that car you are interested in, and try to get at least that trim on the test drive. Different trim levels might have different size engines and seat/ steering wheel ergonomics so driving the wrong trim level might not tell you what the car you want actually feels like.
3. Price research
You already know the price range these vehicles sell for. Now that you have test driven several cars and figured out which you like best and what options you deem necessary, it’s time to find the best price for that particular car. You can do this first if you know the options and trim levels you want, just so you can get an idea of how good a deal the salesperson is actually giving you.
There are several online resources that you can use. If you know exactly what car, trim level, and options you want, then the best idea is to check all three to confirm the best price.
a. Costco Auto Program
The Costco Auto Program shows you invoice & MSRP for the car and any options you want. You will want to find the invoice and MSRP for both the car itself and the invoice and MSRP of each of the options you want.
b. True Car
True Car shows you how much people in your local area. This helps give you an idea what buyers in your local area recently paid.
c. Zag Network
This is a program run through American Express, although you do not need to be a member of any club or even have an American Express card. This website will actually give you the most information, and will break down the total price to show options price and vehicle price. After choosing style (or trim levels) and options, you will want to use the “Locate You Dealer” button. It will then show you the best price you can get through their dealers. These dealers are not always closest to you, but you can always use their prices to negotiate with a more local dealer. The website will also email you a copy of the price list so you can print it out later.
You need to verify the prices via a phone call. Many times dealers will offer their best price, assuming all prerequisites are met. You may not meet all of these prerequesites, so before making a trip to a dealer that may not be very close, you’ll want to know how much they are really asking for. The prices listed on this website will often include manufacturer rebates that may only apply if you purchase the vehicle without financing, or it may include a brand loyalty rebate that you won’t qualify for if you don’t already own a vehicle made by that brand. So call them to verify the price, telling them whether you will be financing or purchasing the car in cash.
After you have verified how much they are actually asking, email them and ask them to confirm that price, detailing again whether you are financing or purchasing in cash. Once you get a reply back, you are ready to contact your local dealerships that did not participate in this website.
4. Contact your local dealers
You now have price quotes from at least three dealerships, although these dealerships may not be the ones closest to you. You also have email confirmation from the dealership with the lowest price that it does not include incentives or rebates that you do not qualify for.
Email the internet sales department of the dealerships closest to you. Let them know that you have already test driven the vehicle and know the options you want. You also have a price quote and wish to see if they will beat that price. You can go back and forth amongst several dealers until they start telling you that they cannot reduce the price any further – now you have your absolute best price for the vehicle. It’s up to you to choose which dealer you now want to visit and make the purchase.
5. Making the purchase
It’s up to you whether you want to drive a car off the lot or wait for a special order, if certain options or colors that are important to you are not available in the cars on the lot. Some dealerships will not make special orders, but you have already been in contact with several dealers so finding one that will make this order should not be a problem. However, you can expect to wait at least 3 months, possibly up to 6 months.
Any contracts they will have you sign during the purchase process will be form contracts. Read them carefully, and pay special attention to the numbers. You want to make sure it lists the price you agreed on, and that all taxes and fees make sense. You can expect to pay roughly 10% over your agreed upon price to cover these taxes and fees.
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