1. Start your vehicle research online. Determine the price of the vehicle you want with the options included. You can do this by going to the website of the company who makes your desired car. From the manufacturers website you can easily find detailed spec’s, safety features, and build your new car with different options. You can look up safety ratings, and search the internet for reviews. Shop dealers in the area and send in emails requesting that they send you an aggressive price to earn your business.
2. Ask for invoice. When you enter a dealership, ask them to see their invoice on the car. This is what they have paid before mark-up. Without even negotiating you have already entered into a conversation about price that is well below what most dealerships are selling that same car for. So you are already ahead of the game. Use this invoice number and call other dealerships that sell that same model. Occasionally, you can get better price if you are flexible on specific features, style, and colors.
3. Obtain your own financing. Unless you are taking advantage of an incentive that offers a low rate specifically through dealer financing, obtain your financing from a local or reputable bank. Dealerships make money by providing financing for a purchased vehicle. They are allowed to, and often mark up customer interest rates, making money per point charged as well as a flat fee for using the chosen financing institution.
4. Time your purchase. The closer you get to the end of a month or the end of a year is the time a dealer will be more flexible with price and work harder to gain your business. Car dealerships are consistently in a month to month war. They are always in competition with other dealerships in their area or zone, while management and sales staff have goals and bonuses to reach. This is perfect leverage for a potential buyer, and the more open you are to taking a vehicle already on their lot, the better the deal may be.
5. Be ready to make a move. If you have contacted other dealers within the area and have a pretty good idea of what you’ll be paying for your new car, rest assured that you will have back up should you have to walk away if something is not right. At the same time, if the dealership is satisfactory and you feel good about your purchase, be ready to buy. Your readiness to purchase is also one of the best negotiating tools you have, as the dealership wants your sale sooner than later.
6. Beware of the finance office and be prepared to continue negotiations. The finance office is a place where lost money for a dealership can be made up with the sale of after market items. It is highly recommended that you kindly turn the items down at first. You will be offered a lower price, as the finance manager also has sales goals. Expect to be offered items such as; extended warranties, paint or interior protection, tire protection, service contracts, and gap insurance. With the exception of Gap Insurance, which is regulated in some states, there are mark-ups in all of these items. Gap Insurance in non-regulated states can have a mark-up in excess of $500.00.
7. Examine the numbers on the contract you are signing. It is your responsibility to read a contract before signing it. You cannot alter the price of standard fees, such as document fees, registration and titling or tax. You may, however; refuse to pay for paint protection that was never discussed with you. Small charges or errors that aren’t caught will cost you extra money, so be sure to bring a calculator and ask questions.
