Driving off in your new or “new-to-you” used car is very exciting! However, most people dread the process of negotiating and buying their new vehicle. It ranks right up there with paying taxes but never fear, we have some simple tips to make your car-buying process easier.
The best car-buying experiences start with preparation, which can all be done from the comfort of your couch. Read on for tips on how to negotiate the best deal on your next vehicle.
Do Your Research
Knowledge is power and the more prepared you are, the better your negotiations. Research the car you want, the features and packages available, the price and dealers in your area. Use our free shopping tool to start the process. Don’t step into a dealership without reliability, safety and pricing information.
Visit and/or call multiple dealerships including some that are not in your direct area. If the salesperson knows you’re shopping at more than one dealer, you’re likely to get a better deal. Prices can vary depending on that dealership’s sales quotas so shop around.
Talk Price – Not Payment
Dealerships prefer to quote cars in terms of monthly payment versus the total purchase price. They can stretch out the term to make the payment work for you. Instead look at the price of the car and the total cost for purchasing it, including financing.
Smart buyers walk into a dealership with a pre-approval in hand. You have better negotiating power with a pre-approval because they see you as a qualified buyer. A good salesperson will try to beat the financing you already have.
Hide Your Trade-In
Don’t let the dealership know you have a trade-in until you’ve agreed on the price of your new vehicle. Why? Because dealers use their profit margin on the new car to make it seem like they are giving you a great deal on your trade-in. Only when you negotiate each separately will you get a good deal on both. Know your trade-in value before you go – Kelley Blue Book or NADA.
Time Your Purchase
Know the best time to buy so you can get the best deal. Also, know the deals available from the manufacturer. Car deals can vary from cash back or interest rate deals. Most car deals are only offered to consumers with top-notch credit. Some deals are only available to specific groups, such as veterans, AAA members, or AARP members so know what’s available for you.
Avoid the Extras
Once you’ve nailed down the price, you’ll be ushered into the infamous financing office. This is where the heavy negotiations begin for all the extra add-ons. Extended warranty, fabric protection, window etching, key protection, nitrogen for your tires, dent protection, and the list goes on. Most experts recommend avoiding the extras. Members Trust can provide a quote for an extended warranty and GAP so you have the comparison pricing.
The best way to get a deal on a new vehicle is to be prepared to walk away (but leave your phone number). Sometimes the salesperson will find more room to provide even more price concessions.
Finally, remember this is a business transaction. Both parties are trying to walk away with a good deal. Don’t let your emotions get in the way of getting a good deal. Be polite, professional and knowledgeable and the salesperson will be more willing to work with you.
More questions? Members Trust has experienced and trusted loan professionals who would be happy to help. Give us a call!