If you're in the market for a new car but don't want to break the bank, you may be wondering what you can do to get a great deal. According to Auto Channel writer Marc J. Rauch, "In general, the best way to make a good deal is to be armed with information, and the self-control to avoid making an irrational decision." With a bit of research and a plan for negotiating, you can get the best price possible on your new vehicle.
Determine what is most important to you in a car. Make a list of the features you want and need. Decide which of these features are absolutely necessary and which you would just enjoy having. Knowing what you need versus what you want is the first step in securing a good price on a new car.
Review your budget. Decide how much you can honestly afford to spend on a new car. If you’ll make monthly payments, determine how much you can afford each month. If you will pay in cash or with money you already have, decide how much of your savings you’d prefer to spend. Having a budget in place can ensure that you don’t spend beyond your means when you start negotiations.
Research vehicles that fit your needs and budget. Look in a variety of places for good deals: on television, online, in print reviews and at dealerships. Check online for the dealer invoice price of each vehicle that meets your criteria. This will give you an idea of how much the dealer pays for the vehicle, which is usually much less than the retail price. Also look up the suggested retail price of each vehicle to get a sense of the typical price range. If you know this information before you discuss bids with the dealer, you’ll be less likely to be manipulated.
Call dealers to start the bidding process. Avoid going to the showroom to negotiate, as it can be time-consuming. Contact each dealer and explain to them that you are in the process of soliciting bids from a variety of dealers on the specific vehicle. Tell the dealer that you know the factory invoice cost and are looking for the dealer who will give you the best markup above the invoice price. Explain to the dealer that you would like a copy of the invoice if you purchase the vehicle from him. Discuss how much any extra features not included in the factory model will cost. Allow each dealer to bid only once. If the dealer is unwilling to negotiate, move on to the next dealer on your list.
Negotiate financing and trade-ins separately. Wait until after you’ve agreed on how much you’ll pay for the car to discuss the value of your trade-in or talk about financing. Discuss each of these separately; many dealers will try to lump the car price, trade-in value and financing into one number so they can overcharge you in one area while giving you a deal in another.
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