Unlike buying goods at most retailing chains, finding a new car at the best possible price is somewhat of an art form. Automobile sellers often have a considerable deal of leeway when it comes to setting the price of an vehicle. Your ability to get a good car at a fair price, therefore, largely relies on your skill in negotiating the terms of your agreement.
Do your research. You can use the Edmunds.com pricing tool to calculate the "Dealer Invoice," the price originally paid for the automobile by the seller (see Resources below--select a model and click the "Pricing" tab). Professional negotiation instructor Michael Schatzki suggests that you also “get three of four quotes from the dealers nearest you, since this will give you a good lay of the land and a range of choices.” When negotiating for a car, information is, indeed, power. The more you know, beforehand, about the car you wish to buy, the greater your ability to bargain skilfully with the seller.
Keep a casual, but assertive, conversational tone. Consumer advocate Michael Royce contends that "it pays to keep the negotiating game as casual and friendly as possible." He adds that "a sense of humor really helps." By maintaining an easy demeanor you communicate confidence and remain in command of the interaction.
Stay focused on the dealer's "selling-price." A salesperson will likely encourage you to reveal information regarding your income or expected monthly payments. Before going to the dealer, decide how much more than the seller's invoice you are willing to pay. Make your first offer as close to dealer's costs as possible, then work your way up toward your predetermined number.
Be willing to walk away. A good salesperson will sense when his prospect is too attached to the outcome. Being over-anxious to close the deal will likely encourage your counterpart to press for a higher price. However, willingness to leave empty-handed, if necessary, pressures the dealer to make concessions and avoid losing the sale entirely.
Items you will need
- Internet connection
- Be specific in your search for a car. Know the exact make and model you wish to buy before approaching the dealer, along with the options that you prefer.
- Be wary of "easy dealer financing." Often, financing offered by the dealer is appealing, due to the draw of lower monthly payments. However, these loans can come at a higher long-term cost, because of excessive interest rates and lengthy loan periods. Obtaining a pre-approved loan amount from your bank or credit union before entering a dealership will likely save you a considerable amount of cash in the end.
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