If the thought of negotiating the purchase price of a new vehicle at a car dealership makes your heart race and your palms sweat, take solace. Many car buyers feel daunted by the task. Why? Because buying a car can be a stressful, complicated, and expensive process. With these tips, you’ll be able to keep your cool, negotiate like a pro, and get behind the wheel of the car you need at the price you want:
Do your math homework
Walking into a dealership with a vague idea of what you want and what you can afford will lead to a one-sided negotiation dominated by the dealership salesperson. You need to be prepared before you visit a dealership. Determine the type of vehicle you want and the money you have to spend on the vehicle, not just the purchase price, but also include the cost of car insurance, vehicle registration, taxes, fuel, and maintenance. Once you have crunched the numbers, start researching makes and models that fit your price range. Then assess the value of the models you like via resources such as Kelley Blue Book, TrueCar, or Edmunds, suggests NerdWallet writer Philip Reed. He also recommends researching potential incentives and the trade-in value of your current car, if applicable.
Research financing options
The car dealership is set up to be a one-stop shop for your car buying experience. It’s definitely convenient to secure financing through the dealership, but convenience doesn’t always equal the best deal. If you need a car loan, it is important to talk to your preferred lender first. Dealers make extra money when they’re the ones that find you a loan, which can lead to higher payments or interest rates. You should also know your credit score before you start negotiations with the dealership, too, advises U.S. News & World Report writer John M. Vincent.
To help make sure you receive a competitive price on your new car, compare quotes from several dealerships. You will not only gain peace of mind that you are getting the best price; you can also use the other quotes as leverage when negotiating. “Once you get a price from one dealership you can ‘shop’ it by contacting other dealers for a quote. This works well whether you’re negotiating a used car or a new car price,” according to Reed. “Tell the other dealers that you already have an offer in hand. Dealers often test competitors’ prices so they know what figure they’ll have to offer to win the sale.”
The price of the car is just one facet of the negotiation process. Even if you negotiate a great deal on the price of the car, you can lose it all if you say yes to every extra the expert in the finance and insurance office offers. Don’t cave to the pressure of their sales tactics, which often preys on your fears and uncertainties.“Most of the things you are offered are available outside of the dealership from third-party companies. They can be purchased at lower prices elsewhere,” according to Vincent.
Use these tips to help secure a great deal on your new car.