Home Money Saving Tips How to Negotate the Purchase Price For Your New Car

How to Negotate the Purchase Price For Your New Car

new blue car

If you’re in the market for a new car, it is very important to fully understand exactly what you’re dealing with at car dealerships. Car salespeople are specifically trained in the powers of psychology, and they will use every trick in the book to make the highest profit possible on each sale as much as you want to save the most money on each sale.

They are expertly trained to use your emotions and their inside, expert knowledge of how the system works to win your confidence and take control of the sale from the moment you walk into the dealership. If this is the first time you’re buying a car, you need to do be fully aware of what you’re dealing with.

No matter how confident or knowledgeable you are, even if you have a degree in psychology, you’re simply no match for the used car salesman especially the sales manager who has dozens of years of experience, and is always razor sharp. This is because they get to sharpen their selling skills to perfection by practicing phrases and tones of voice on real individuals every single day, and they will be ready for you.

The only thing you can do is to avoid small talk completely, and restrict the conversation to what you already know you want.

If you are not well prepared or haven’t done your due diligence, they will have you for dinner. You need to approach the used car buying process as a strictly business deal with the right mindset so that you get the car you want at the right price. It will be a lengthy and difficult process and they will really test your wits, but it is important to remain calm, respectful and in control throughout.

Keep in mind that you may need to visit 3 to 5 dealerships to get the right deal and give yourself enough time to get yourself the best deal. The whole process may take longer than you may have anticipated, but it will be worth it in the end because you will have saved yourself thousands, and you’ll avoid years of heartache and frustration of being stuck in the wrong car.

For your first visit, arrive at the dealership around 5.00 PM on a Friday dressed in formal attire to let them know you’re coming from work. If you are fully prepared, you can probably get everything done the same day, but you have the option of returning the day after to negotiate financing.

You might be better off seeking out a less experienced salesperson to deal with. Stay away from the hungry, really slick looking sales people that seem to have all of the answers. Prepare to play the dealerships off each other, telling them the price to beat. Never let your guard down, but also never let your ego get in the way of a good deal.

By the time you get to the dealership, you should have completed your research and already have a clear idea of your price range, what monthly payment is reasonable for that price range, and what features are important to you in this car. Base every decision you make on the research you have done and do not deviate one iota from what you have agreed beforehand. Keep your cards close to your chest and do not let the salesperson know how much you are planning to spend. If you do, they will try to lure you into buying a car that maximizes their commissions rather than showing you everything in your price range.

This is why it is extremely important that you do not get drawn into talking to salespeople about monthly payments, trade-ins, financing or what you can afford. Simply ask to see cars that are within a specific price range, and stand your ground.

Try as much as possible not to get into any small talk or discussion with the salespeople because all they are looking for is an opportunity to take control of the sale. As soon as you walk into the dealership, they will be trying to understand how to manipulate you. You can bet they will try everything to throw you off your game; to the point of talking about you being “unfriendly” or even hostitle. This is why you should already know exactly what you’re looking for. Use comments like “I’ve had a really long day to avoid small talk”.

Simply let them know that you have already narrowed down the car you want to the exact model and color, and stick to that. Keep all talk focused on the car model and features you’re interested in. Don’t base any decisions on what they have told you. If you’re open to considering a similar model with your key desired features in the same price range, make sure it is something you’ve already checked it out before. Don’t let them steer you away from what you’ve already researched and made up your mind to buy or deviate too much from the price you’re determined to pay.

When you start the negotiation process for the purchase price, do not say anything about any internet research that you’ve done on the car. Doing so will only lead to an argument that you simply cannot win. You can be sure that they will either disparage the deal as an unpractical offer or explain that the price is from an internet company rather than a real company. This is designed to throw you off your game if you don’t know how to respond, and you may lose some of your edge which may allow them to start to take control of the sale. If you want to highlight price comparisons, bring up prices from other dealerships not websites.

At this point of the sales process, you are only interested in getting the right purchase price for the car and features you want. Focus on doing just that. Even if you intend to trade your car in, do not bring up any discussions about a trade-in until you have agreed on a purchase price for the vehicle.

If the salesman asks a question about a trade in, just say that you haven’t really considered trading in your car and are not willing to discuss it at this point or at all. Do not entertain any discussion about how you are going to pay for the car at this point. If you are asked to fill out a credit application at this point, refuse and be ready to walk out if they insist. Let them know that you have already been preapproved for a loan, and that is what you intend to use to pay for the car, unless they are able to match that.

The Zero Percent Interest Promise

You may have been lured into the dealership by ads that promise zero percent interest. It is important to understand that 0% interest is not always what it says on the tin. Even if your credit scores are high enough to qualify for the deal, the dealership will add several fees and charges to the principal. This is virtually the same as all of the interest being charged upfront.

Many of these dealerships tend to use this powerful incentive as a tactic to get people to ease up on haggling over the sticker price (which could be thousands more you would pay if you negotiated the price) in anticipation of the lower monthly payments that 0% interest promises. Don’t fall for this.

Confirm the Agreed Upon Price

After you both have reached agreement on price, get the salesman to confirm it on a printout that contains the VIN. Double check the VIN to make sure it is correct. It is a legally enforceable document. This is very important because if you don’t have the agreement in writing, the dealership may try to pull a fast one on you at the financing stage of the process. Once price has been agreed upon, you now need to inspect the vehicle and check its history.