So, you’ve decided what car you want and finally you’re ready to make your car ownership dreams a reality. If only the next step was as easy as pointing at the car you want and telling the salesperson “I’ll take that one” while whipping out your checkbook. If only.
Unfortunately, buying a car isn’t as simple as buying a sweater at the mall or a can of soup at the grocery store. Buying a car, similar to buying a house, requires you to put your poker face on and negotiate.
Know the numbers in advance
Before setting foot on a lot, it’s important to know almost everything there is about the car you wish to buy. A good way to start is by reading my car buying checklist. Once you know exactly what you want, you need to know how much you should pay for it.
One suggestion is to use Edmunds’ True Market Value calculator. When you select your ideal car’s make, model, year, and add in your ZIP code, you’ll be able to find out what other people are paying for that exact car in your area. This calculator uses data from actual sales, so it’s pretty accurate.
As an example, let’s say I wanted to buy a 2017 sedan. On the manufacturers website, it says that car starts at $16,775. That number doesn’t include any customizations, includes a manual transmission, and is essentially the lowest listed price for the most basic version of that car.
Let’s also pretend I live in Seattle, Washington, with the ZIP code 98119. I plug in all of the car’s data, choose the most basic version of the car, and guess what I found. For my location, the true market value for the car is $12,707. That’s the invoice price minus $4,000 in incentives and rebates. This would be the number I would aim to purchase my car for, give or take a few hundred dollars.
Stick to that number when negotiating
What I mean by sticking to that number isn’t to be inflexible when it comes to price, because you may find you have to pay a few hundred dollars more than you’d hoped to lock down a deal. What I mean is salespeople will try a number of different tactics to confuse you, one of which is to steer the conversation away from the total car price to other things like monthly payments, trading in your car, or even disputing your research.
It’s important to realize when they’re doing this, so you can steer the conversation back to the total purchase price. Anything else, such as car payments, financing, and trade-ins can be discussed after you’ve come to an agreement on price. Don’t be afraid to stand your ground!
Compare, compare, compare
The best way to negotiate with a car sales representative is to make it seem like you don’t need to buy from them, you can go somewhere else. Remember, they’ll do almost anything to make sure you buy from them instead of a competitor, so take some time to compare your options.
That’s another reason why you should never buy a car in a rush. Give yourself plenty of time to visit numerous lots, get quotes from several dealers, test drive the car, then pick the dealerships who gave you the lowest quotes to negotiate with.
Make it known that you’re a serious buyer
Another great negotiating tactic is to make it clear that you’re serious about buying a car, not just browsing. That means doing your research, test driving the car a few times, having your quotes handy, and having your financing in order (either with cash in the bank or being pre-approved for a loan).
By letting the salesperson know this, you’ll be able to express confidently that if they sell you the car within your ideal range, you can help them make an easy sale today. What sales person wouldn’t want that?
Know when to move on
Not all sales people are reasonable, even if you make it sound like making a deal with you would be a breeze. If you find that they keep talking in circles and clearly aren’t willing to go down to a price that you know is acceptable, you need to get up and say “Thanks for your help and all the best to you” before shutting the door on the way out. Just like there are plenty of fish in the sea, there are plenty of other dealerships out there that would be more than happy to help you buy a car and earn a commission.