With a little preparation, you can raise your chances of getting a good deal on a new or used car. There are a few things you need to know – some specific to the car you want – in order to succeed.
Very Important Tip#1: they will give in on some points, but try to make it up on others. For example, they may give you an awesome offer on your trade-in, but swear they can’t negotiate on the dealer-added options you don’t want to pay for. You need to be forearmed with knowledge.
If you’re trading cars, go to the dealership knowing two things:
First, you need to know what you can realistically sell your current car for if you sold it yourself. You can look up the Bluebook value online. You can also use a number of apps like Carvana to get an actual offer.
This empowers you to insist on getting the offer value with your trade-in. If they refuse to meet it, but otherwise the deal seems good, apps make it easier than ever to sell your car without having to let strangers test drive it.
They may not give you the trade-in price you want, but if they offer other incentives that come up to the same amount of savings, that could make the trade worthwhile.
Second, you need to know what current interest rates are. This is also something you can check online. But it’s a good idea to actually call several banks, give them an honest appraisal of your credit, and ask what sort of interest rate you should expect.
Since you can actually get a loan via a bank instead of the dealership, and the dealership wants your interest, being able to tell them “I can get an interest rate two points less than what you’re offering” gives you negotiating power over the interest rate.
And if possible, check the interest rates with other dealers in your area.
How to get a good deal on a car
While you’re talking to sales people:
- Don’t want any one car too badly. If they know your heart is set on a certain model, that works against you. If you show equal enthusiasm for several vehicles, and maybe even let them know there’s also another brand you’re looking at that they don’t sell, they have to compete.
- Be ready to walk away at any point. During my very first car purchase, the numbers the dealer kept giving me for the monthly payment scared me to death, so I kept sincerely saying, “I know you’re offering me a good deal, I just don’t think I can afford it. Sorry.” To my naive surprise, he kept coming back with better and better numbers. In the end, I thought I’d probably gotten screwed once we reached a number I could handle, but when I looked up the value of my inherited trade-in, the value of the car I’d just bought and the available interest rates to someone with my credit, I realized I really had accidentally gotten a good deal.
- Don’t involve your ego. Some people think that belittling sales people and making them beg you to take the deal is the way to get the best deal. But dealers know this. They know how to act like you’ve defeated them when in fact they’re giving you a deal that favors them.
- Be casual. Tell them you’ve just started looking and you’re not even sure you really want to get a new car yet, that it’ll probably be a few weeks before you buy. This is plausible, so now they’ll have to compete to get you to buy now.
- Buy at the end of the model year, around September 30th, if you’re buying a new car. They’re looking to unload what’s about to become “last year’s model”, so you can get amazing deals on these brand new cars.
- Or buy at the end of a month when they’re hustling to meet sales quotas. Be on the lookout for one rarity – the dealership that’s sold all it needs to and doesn’t really need your business. This is pretty unusual (most sales people never feel they’ve gotten enough), but if it happens, move on to another dealership.
- Rebates and incentives can rock, or can be false economies. Be aware of whatever a certain brand or dealership is offering, in case the dealership, ahem, forgets to mention it. But don’t assume these incentives are a great deal – they’re going to try to make them up elsewhere in the negotiation. You may find opting for a model that doesn’t come with an incentive gets you a better deal than the one that does.
here are tons of different opinions about how to get a good deal on a car, and you should check other sources. Consumer Reports is a great source for learning about the cars available in your price range, and important information like how well they run over time and handle crashes.