If your old car is unreliable and costly to maintain, buying a new car can give you the reliability and value you need. But buying a new car can be a difficult process, and if you fail to negotiate properly you could end up spending thousands of dollars more than you should. The more you learn about the car buying process and the true value of your desired car, the better off you'll be when you walk onto the dealer's lot.
Arrange your financing before you start shopping for the new car. Visit your bank and meet with a loan officer to discuss your finances and how much you can afford to borrow. Complete the paperwork you need to get pre-approved for the amount you have in mind. Being a pre-approved buyer can give you more clout when negotiating with the dealer.
Check the value of your trade-in before you start shopping. Use reputable sources such as Kelley Blue Book and the Edmunds.com guide to get a fair price for your car. Ideally, the price negotiation on the new car and the negotiation for the trade-in should be two separate transactions, but it's still better to know how much your old car is worth. If you can afford to be without a car while you shop, you might be better off selling your old car privately and using the cash to boost your down payment.
Compare the sale price of the models you're interested in at several different dealerships, both in your area and in other towns. Even if you don't want the hassle of working with a far-off dealer, having that lower price in hand can force the local dealer to lower his price.
Find as much information as you can regarding how much the dealer actually paid for the car. This information is available from a number of online and offline sources, including car magazines, consumer magazines and car shopping websites. The more information you can gather about the dealer's true price, the stronger your negotiating position will be. Keep in mind that the invoice price is probably higher than the dealer's true cost, since the dealer is eligible for rebates and other incentives from the manufacturer.
Browse the dealer lot and check the sticker price on the cars you're interested in. You might want to pick a time when the lot is closed so you can browse without any salesmen around. Note the sticker prices of the cars, and set an ideal price in your head for each car.
Avoid acting excited about the new car purchase, and don't reveal how much you want a particular make or model. Treat the negotiation as a business deal, and don't let your emotions get in the way.
Negotiate up from the invoice price rather than down from the sticker price. Start with a low offer to allow plenty of room for further negotiation. Negotiate based on the total price of the car, rather than your monthly payment. Since you already have financing arranged by your bank, you don't need to worry about anything except how much you're paying for the car.
Walk away if you don't get the deal you're looking for. The dealer might be more willing to negotiate if you're prepared to walk away and shop elsewhere.
- Compare the price of a new car to comparable used cars with low mileage. You might be able to get a better deal on a dealer leftover or a salesman demo car.
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