Visiting dealerships, looking at new cars, test driving cars--these are the fun parts of buying a new car. Now that you’ve decided on the car you want to purchase, it’s time to negotiate to get the lowest price. In partnership with your spouse or significant other, get ready for the dog and pony show that sometimes goes along with buying a new car. In a few steps, you can learn how to buy a new car for the lowest price.
Go online to research average pricing for the car you want to buy. Sites such as Kelley Blue Book and Auto Trader list pricing for new and used cars, trade in price, private party cost and retail dealer price.
Educate yourself on dealer cost. New car sticker price (MSRP) is the retail price the dealer wants you to pay. The MSRP is usually thousands more than the dealer paid for the car. Cars Direct and Edmunds will list the dealer’s cost of many cars. Keep this figure in mind when working with the dealership’s sales team. Don’t divulge the figure to them as the dealer may tell you that figure is wrong, however, that is just a sales tactic to throw you off your game.
Shop at “no haggle” dealerships such as Carmax or a Toyota's Scion seller where the sticker price is not negotiable. Before you buy, make sure the price they are charging is in-line with your research. This method is less of a headache and eliminates the difficult back and forth between you and the sales team.
Buy when you are more likely to get a better price--around the end of the month, end of the year, out-of-season, late in the model year, before a body-style change and when incentives are offered. For various reasons, dealers are more likely to make deals when they want to meet sales quotas, get tax write-offs and move cars off the lot.
Negotiate based on the price of the car, not monthly payments. Monthly payments vary widely by insurance rate and length of loan. The car may end up costing a lot more if you take a longer loan just to get lower monthly payments. Car salesman may try to negotiate using this tactic but it often skews the ultimate cost of the car.
Offer a fair price for the car. Avoid intimidation and stick firmly to your price. If the salesperson refuses to sell you the car at that price, leave. Often the salesperson will come running after you or call later agreeing to meet your price.
- Always test drive a car before buying it.
- Visit multiple dealerships to compare price and stock before buying a new car.
Francine Richards is a licensed multi-state insurance agent with years of human resources and insurance industry experience. Her work has appeared on Blue Cross Blue Shield websites and newsletters, the Houston Chronicle and The Nest. Richards holds a Bachelor of Arts in communications from the University of Maryland.