We understand if you’re a bit tentative about initiating the car-buying process. After all, there’s no denying that negotiations with a dealership can be stressful. The salespeople are trained for these situations, and many customers walk out of a business feeling like they committed to a bad deal.
Well, as a customer, there are several ways that you can assure that you’re opting for the best possible price on a targeted car. Below, we’ve provided several tips for the car-buying process. When you’ve finished reading, you’ll be fully prepared to visit any car dealerships and start haggling…
Tip #1: Visit at an Opportune Time
At the end of each month, there’s some pressure on dealerships (and especially on their salespeople) to meet a monthly quota. These businesses will be looking to move inventory as quickly as possible, and customers can capitalize on their urgency. This is a big reason why you’ll often see dealerships hold end-of-the-month sales (which is another incentive to visit during these specific times).
Now, you shouldn’t expect that these businesses are going to just give away their vehicles. However, since they are on a bit of a time crunch, you might find that they’re willing to relent on your demands.
Tip #2: Understand Your Monthly Budget
You wouldn’t believe how many consumers enter a dealership without having a firm understanding of their monthly budget. While they may have some extra money right now, they usually discover that they’re unable to afford these payments after several months. An inability to pay your bills in a timely manner could lead to a decline in your credit standing, and it could even lead to your car being repossessed.
However, if you understand how much money you’re able to commit each month, you’ll be better prepared to negotiate with a dealership. While you’ll surely have an ideal price in your head, you’re presumably going to leave yourself some wiggle room. In this situation, you’ll understand if a price is too high, and you’ll be able to walk away without making a poor decision.
Tip #3: Understand the Value of a Targeted Vehicle
You shouldn’t assume that the car-buying process will only take one day. Rather, in order to secure the best possible deal, you’ll need to do your fair share of research. In particular, once you’ve targeted a specific make or model, you’ll want to begin exploring the proper price for that vehicle. In the event that you’re buying a new car, you can explore the MSRP and any additional charges or fees. If you’re opting for a used car, you can rely on resources like Kelley Blue Book, eBay, or Craigslist to get a firm understanding of the current value.
Predictably, a dealership is going to try to get as much money as possible for their vehicle. By understanding how much the car should actually be selling for, you’ll know when you’re being presented with a bad deal.
Tip #4: Shop Around
When you’re making a pricey purchase like a car, it doesn’t make much sense to not shop around for the best possible deal. Sure, it might require you to dedicate a bit more time to the process. However, by securing an offer from multiple businesses, you’ll be assuring that you’re opting for the best possible price.
Furthermore, by securing a definitive offer from another dealership, you can approach another business and use your current offer as leverage. As we previously mentioned, dealerships are ultimately focused on making the sale. If they have tangible proof that you have a better deal elsewhere, you might find that they’re more willing to lower their asking price.
Tip #5: Secure Financing First
You’ll find that plenty of dealerships are willing to extend financing to their customers, although these agreements are usually accompanied by relatively high-interest rates. Assuming your credit is in good standing, you won’t have any issues securing financing from a bank or credit union. Then, if you head into a dealership with your financing agreement in hand, you’ll find that the salespeople are more willing to give you an advantageous deal.
Why is this? Well, since you secured a financing agreement elsewhere, the dealership won’t be able get as much for the vehicle. As a result, the dealership may try to beat the bank’s financing offer, which will secure them some extra money via the applicable interest rates. At the end of the day, this all means that you’ll be saving some extra cash on your monthly payments.
Tip #6: Consider Trading in Your Current Car
If your current car isn’t on its final leg, there’s no reason why you should just dump it. Rather, you can still probably get some value for the vehicle, and it’s likely that a dealership will be willing to add the ride to their used collection. Ultimately, you can use your vehicle in an attempt to lower the price on a targeted new car.
Of course, this process also requires some research. You won’t want to give the vehicle away, so having an understanding of the used car’s price will provide clarity before your negotiations. Of course, you shouldn’t expect full price for the vehicle, especially since you’re using it in an attempt to lower the price on an upgraded, newer car. However, by knowing the proper value, you’ll be aware when you’re approached with a bad offer.
Tip #7: Don’t be Afraid to Walk Away
Sure, the dealership is seemingly in the driver’s seat when it comes to negotiations, as they’re the ones who are actually selling the vehicle. However, when all is said and done, it requires your signature to complete any purchase. Therefore, the ball is really in the customer’s court. If you feel uneasy about a deal, don’t be pressured into accepting it. Rather, you should be ready to walk away, especially if the deal doesn’t make financial sense. Who knows, maybe you’ll find that the salesperson will subsequently follow you out the door with a better deal.