Four Ways to Get the Best Deal When Buying a Car
Car dealers can haggle with the best of them, but don't be intimidated by their expertise. These tips will put you in the driver's seat — and help you get the best price on the car you want.
1. Get Your Car Facts Straight
Online research can help you find dealers that sell the models you’re considering and compare prices. Online services such as Carvana will even let you see what others in your area have paid for the same car. (You can also use these sites to determine the value of your car if you are looking to sell it.)The more facts you have at your fingertips, the easier it can be to get the best price. However, when comparison-shopping online, remember that condition is everything. Price benchmarks on sites like CarMax or AutoTrader.com may assume the car is in tip-top shape. So if you’re buying a used car, ask for an independent inspection to make sure you get what you pay for.
When you are ready to purchase, show the salesperson you’re serious about getting a good deal by asking to see the invoice price on the make and model. Strive to pay between the invoice price, which is slightly above the dealer’s actual cost, and the MSRP.
2. Get Pre-Approved Financing When Buying a Car
Getting pre-approved financing will help you set a budget for your automobile. This should be done shortly before you plan on purchasing a vehicle to limit the impact of multiple inquiries on your credit. Pre-approval does not lock you into a loan rate from a lender; you’re still able to use other sources of financing, such as the dealership’s financing service. Some dealers may offer competitive rates, thus making money on the loan and the sale of the car. Keep in mind that a dealer might be willing to sacrifice dollars on a price in hopes of making it back by financing the loan. You can compare two loans through our calculator to see what option is best for you.
3. Ask for Specific Car Discounts
Ask for a "loyalty" discount if you're buying the same brand as your last or a “conquest” discount if you’re new to the brand. Either discount could save you several hundred dollars. In addition, ask that the dealer to reduce the document handling fee to $100, and drop advertising, dealer prep, and destination fees.
4. Be Ready to Walk Away from the Car Purchase
Negotiating a price via email or phone with multiple dealers can reduce feeling pressured by a salesperson while at the car lot. Regardless of how a price is negotiated, if the salesperson won’t offer the price or discounts you want be prepared to walk — at least temporarily. The seller might be willing to meet your target price if you’re ready to leave the negotiation.
Once all pricing is in place (purchase price, upgrades, extras, trade-in, fees, and taxes) you can shop around to see if another dealer will give you the same vehicle for less.
As with any strategy, timing is everything. Salespeople are most motivated to make deals on the last day of the week at the end of the month, as they have quotas to meet.
The key to successfully purchasing a new or used car is to arm yourself with upfront research and a plan for getting the best possible deal.
