Buying a new car is exciting, since you’ll soon have the opportunity to drive something incredibly polished, safe, and reliable. But if you want to mitigate the extra expenses of buying new, you’ll want to do your homework and find the best deal on a new car. That means finding the best option for your money, as well as shopping around and negotiating to get the best final price.
So how should you approach this?
Do Your Research in Advance
The more information you have, the better. More objective information will help you determine the quality of each deal in front of you, as well as give you negotiating power once you start working with the seller directly. You should start this process as early as possible to maximize the information you have to work with.
For example, let’s say you’re interested in purchasing a new SUV. Long before you set foot in a dealership or start working with an online seller, you should familiarize yourself with the makes and models of SUVs available, current prices, and other details. Once you decide what type of SUV you want, you’ll be much more familiar with the market.
Pay especially close attention to:
· Models available. What types of models are available for purchase and what are their main selling points? Which types of models are a better fit for your lifestyle and needs?
· Options. Within a given model, what options are available? Since you’re looking for a new car, you’ll have practically unlimited customization potential. What options are worth the extra money?
· Typical prices. With some online research, you should be able to figure out typical prices. This includes “sticker price,” or MSRP, typical prices paid by consumers, as well as the invoice price that the dealership pays. With these prices, you’ll be able to triangulate a target price for your purchase.
· Pros and cons. You should also consider the pros and cons of each available model and configuration you’re considering.
It’s also important to research dealerships and online platforms for buying vehicles. Different establishments are going to offer different types of opportunities.
What You Can Negotiate
In many situations, you’ll be able to negotiate multiple aspects of the deal, including:
· Price. Price is the main thing you’ll be negotiating. Just keep in mind that it’s almost impossible to get a price below the invoice price.
· Interest rate/loan terms. If you’re getting a loan, you may also be able to negotiate the interest rate and terms associated with that loan. Shop for loans with third parties in addition to dealerships.
· Fees. Pay close attention to any secondary fees associated with your transaction. Dealers may charge you for things like documentation and inspection, but you may be able to negotiate these fees away.
· Trade-in value. Finally, consider negotiating the trade-in value of your used vehicle, assuming you have one.
Negotiation Tips
If you want to be a more effective negotiator, follow these strategies:
· Time your purchase carefully. Timing matters. Car salespeople are usually more motivated to finalize transactions at the end of the quarter and at the end of the year.
· Work with multiple dealers. Working with multiple dealerships and platforms is in your best interest. This way, you’ll have more negotiating power and more options for your purchase.
· Remain objective. Negotiations can sometimes stray into emotional territory, but it’s important to remain objective. Ensure all your demands and requests are framed with logical reasoning and factual data.
· Consider price and payment. Consider both the vehicle’s purchase price and your monthly payment when negotiating. A lower monthly payment may look attractive at first glance, but it may not be worth it if the purchase price is too high.
· Get loan preapproval. Walk into the dealership with preapproval for your loan. It will make salespeople take you more seriously.
· Research your vehicle value. If you’re trading in a vehicle, research its value before heading to the dealership. You may not get this as an exact offer, but you should be able to tell whether the offer is fair.
· Start low. One of the most common negotiating tactics is to start low. Ask for a price lower than what you’re willing to pay so there’s plenty of room to progress.
· Be ready to walk away. Finally, be ready to walk away if you don’t get a acceptable deal. There are plenty of other new cars and dealerships to consider if this one wasn’t meant to be. Willingness to walk away is critical for any strong negotiating position.
If you know what type of car you’re looking for, if you’re willing to research dealerships, and if you’re willing to practice effective negotiation, you’ll be in a much better position to find the best possible deal on a new car. It does take some work up front, but you could save thousands of dollars and find a better-fit vehicle in the process.
