Going to a dealership is kind of nerve-wracking.
And no one can blame you if you feel this way…buying a car can be long, tedious, and even confusing. It’s a big purchase, and no one wants to end up with an expensive piece of scrap metal. When car buyers are only in the market every 5 to 6 years, and salespeople are out there every day selling cars, you can bet that you are at a disadvantage.
All you need is a little education to make a good purchase. Car salespeople are not evil people trying to “get one over you”. They are trying to sell and you are trying to buy.
It’s that simple.
If you want to get a good price on your future car, keep reading and we will show you how.
1. Establish Your Needs and Wants
A good salesperson knows one thing very well: a buyer needs a car that fits their needs.
But this is a two-way street. You have to know what your needs are. Do you have children to drive around? Do you want to save money on gas? Perhaps you like to have the wind in your face and want a retractable roof.
Whatever the case, make a list with two columns. The first column is for “needs,” which includes absolute necessities like space for your children or good fuel economy. Then create a second column for “wants,” which includes things you would like to have. For example, some people like to have a bigger engine if they find that in a car within their budget. But if it doesn’t work out that way, it’s not a deal-breaker.
Having this list helps your dealer to find cars that fit your needs and wants. (And keeps you from being sold on impulse!)
2. Win at the Negotiation Game
A salesperson is supposed to help the dealership make money by getting cars into the hands of customers.
Because of this, they will try to get you to pay a higher price (they also get a commission). For many of us, it can feel as if the salesman is trying to squeeze every penny out of your wallet.
Here’s the thing: the salesman is not the problem. The problem is that people accept these offers. Here are a few tips that you can use during the negotiation process:
- Learn to say “no.” If you can’t say no, then you have ZERO leverage. Just imagine selling a car to someone whom you know will say yes, no matter what. Would you lower the price to weak objections like, “We would like to pay $1,500 less than your offer, is that possible?” Of course not!
- Set a budget and learn to walk away. It’s important to know your price range. Otherwise, you will be more susceptible to paying higher prices. When negotiating the price of a car, give the car salesperson the price you are willing to pay. Stay firm, and if they can’t settle for that amount, give them your contact information and ask them to contact you when the price becomes feasible. If that price is possible, they will call you back.
- Don’t rush and buy. A car salesperson will urge you to make a quick purchase. It’s just good business when someone buys a car quickly. If someone leaves the dealership, the chance of a sale decreases dramatically. Keep a look out for bundles and limited-time offers, but don’t give into them. If they can offer you a “limited time” price today, then surely they can do the same tomorrow (otherwise why do business with them?).
3. Get a Pre-Purchase Inspection
As we said, you don’t want to buy an expensive piece of scrap metal. So before you make a purchase, create an agreement with your dealer to get the car inspected before the purchase.
You might get some pushback from the salesperson, but be firm in your decision. This is an expensive purchase. The sales tag might say $15,000, but if it needs repairs, that could be misleading and end up costing you much more. For more more information on setting up a pre-purchase inspection, click here.
If car quality is important to you, there are other options than just the dealership. Our company, TRED, connects sellers and buyers and gives EVERY vehicle a 150-point inspection to check for leaks, engine condition, and much more. That way, you know EXACTLY what you are buying before negotiations even begin.
4. Create Leverage Through Research
The most important tool for negotiation is research. A salesman cannot possibly sell you a car for $15,000 if there are identical cars listed for $12,500 in the same area.
We recommend checking websites like Kelley Blue Book and TRED to create an instant estimate of any car you are purchasing. You can also look at Craigslist to find individual selling prices for the same model.
Of course, a dealer isn’t going to succumb to your price estimates the moment you say, “but the Kelley Blue Book price says it is actually this much!”
But during the negotiation, you will have set an anchor that will help you bring down the price.
5. Shop Around
Too often the same thing happens: people show up to one or two dealerships and leave having agreed to a deal.
Don’t be one of these people. Unless you have a firm grasp of what you want and the price you are looking for, you need to see what multiple dealerships can offer you.
A good deal at one dealership and be a bad deal at another. As well, it will give you a chance to warm up your ice-cold negotiation skills!
Now that you have some information, we want to give you something concrete to work with.
If you have a trade-in, go to the dealer and see what they offer you. If you are in the market to buy, go shop around and create a list of cars you like and their prices.
Take this information and plug it into TRED’s Instant Estimate Calculator.
If you are a seller, you will most likely find out that you can sell your car on the private market for thousands more than what you’d get by trading it in. Buyers will find that dealerships are more expensive. You won’t be able to get the dealer down to that price, but like we said, it can serve as an anchor for future negotiations.
Just be patient, do the research, and find the car of your dreams (for the right price of course!).
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