It’s that time again. That time you are on an emotional roller coaster.
It’s time to buy a new car.
Many people are an emotional Yo-Yo during this time. Excited because of the new car. Nervous because they have to face the “sleazy car salesperson”.
Let me allay your fears – salespeople (even car salespeople) are human beings just like you.
So get rid of that fear, face them head-on, and negotiate the best deal for your next car. Here’s how.
It’s Not a Fight, It’s Mutual Agreement
The mistake many car buyers make when they go to the dealership is to go ready for war. And the salesperson quickly notices it. As human nature will have it, the salesperson will automatically go on the defense. After all, they are also human. Because none of you wants to lose, both parties will drive a hard bargain and not budge.
Here’s the best-negotiating tip you will ever hear – turn the salesperson into an ally and come to a mutual agreement.
Know What You Want
Never go to a dealership without knowing what you want. It will be next to impossible to negotiate if you do. Do your research well.
- What kind of car do you want?
- What purpose is it going to serve in your life?
- If you are looking for good used cars, what mileage is reasonable for you?
Once you know what you are looking for in a car, don’t be swayed to get something else. Imagine going out to purchase a minivan and coming back with a roadster.
Determine How Much You Are Willing To Spend (And Stick To It)
Determining, from the onset, how much you are willing to spend is very important. This is the backbone of the whole negotiation process – getting a good car within your budget. Once your budget is set, look around for the type of car you want, within your budget.
Again, research is important here. Check as many dealerships as you can. Compare prices, mileage, make, service records and everything else in between. Eliminate every car that does not meet your standards and narrow down your list.
With narrowed down list in hand, you can now proceed to the next step.
Check Edmund’s for the True Market Value (TMV)
If you’re looking to buy a brand new car, visit Edmund’s to get the TMV (true market value) of the car. This is a very helpful website that will give you leverage. Knowing the TMV will give you “insider” information as to how much the car is worth and also the range within which to negotiate.
Armed with this knowledge, you can then lay your terms on the table and give the dealer your “take-it-or-leave-it” terms. As long as your offer is reasonable, they will either take it immediately, or, call you back after some time. This is where patience pays. Literally.
Once you have set your deal on the table, follow it up, either in person or over the phone. The key to following up is to do so at strategic times. For example:
- Last day of the month. If you are lucky, they will be looking for that last deal to boost monthly sales.
- Seasons of bad weather are another great time to follow up. Few people purchase cars during storms or freezing cold days. They are more likely to agree to your terms at this time.
The best time to buy a used car is when the dealership is not making many sales. You can even narrow it down to the type of car. For example, buy a convertible in winter, the demand for them will be low.
If the dealer out-rightly refuses your offer, don’t despair. Look for another dealer who is willing to work with you.
How To Negotiate A Car Lease
If you are leasing the car, you need to understand everything involved in the lease. Leasing a car is completely different from buying a car as there are a few contractual obligations you will need to understand and stick to. A few examples are:
- Down payment
- Cap cost (total cost of the car)
- The buyout price. This is the price you will pay for the car at the end of the lease if you decide to buy it.
- Mileage limit. This is the number of miles your lease allows you to drive in a month. Once you go beyond this, you will be charged excess mileage fees.
When negotiating a lease, always agree on the cap price first. And do so as if you are paying for the car (don’t tell the salesperson you are leasing until you agree on cap price). Once you are settled on the cap price, try to pay as big a down payment as you can. This will reduce the monthly installments you will be paying.
So there you are. You are now well equipped to go and negotiate the best deal on your next car. Remember, it’s not a fight, it’s a mutual agreement. Gloves off.