Let a former car professional who has retailed thousands of cars and ran some of the largest car dealerships in the United States help you avoid the pitfalls and traps when you purchase a new car.
Tips on how to get your best trade-in allowance
The old car just died, you knew this day was coming and put it off for as long as you could. It’s time to go and buy a shiny new car. Thrilled? Yeah right, about as much fun as going to the dentist. I would agree if you are unprepared, it will feel like torture and probably hurt your wallet as much as a trip to old painless Paul. But with some proper planning, research and due diligence, it can be a great trip, especially when you win. Nothing better than the new car smell and knowing you won the battle at the dealership.
“A battle is won before it is ever fought”
No truer words were ever spoken and this was said by Sun Tzu, a great warrior in 500 B.C. And he didn’t even drive a car. Proper homework for the battle at the car dealership starts on line with research. After you have narrowed down which car you are interested in purchasing. You can now do the research required to get the best deal.
Researching Incentives
First thing you need to find out are what incentives are on the car. They can be in form of rebate, owner loyalty programs, matching down payments because of miles or points accrued on credit cards. There are sometimes special lease price or subvened finance charges that can give you a 0% interest rate. There are military rebates, sometimes some fortune 500 companies, like General Electric, offer employee rebates for buying American cars. Hybrid and Electric cars have federal rebates and some states offer rebates as well on Eco-friendly cars. All of these rebates are programs with definite expiration dates so be aware of them as well.
Researching invoice price
Websites like Kelley Blue Book, Edmunds, and Autotrader all offer manufacturer invoice pricing. These are legitimate prices that dealerships pay for their cars. Now before you get all huffy that the invoices are bogus and don’t reflect every dime a dealer pays. You are right there is some hidden money. They don’t include holdback, special stair step volume discounts dealers get for hitting volume plateaus, advertising money, and floor-plan costs, which is the amount of money it costs for the dealership to keep the car on the lot in inventory. But the invoice truly reflects what the dealership sales manager perceives as rock bottom. The General Manager and owner operate the business using different numbers but what should concern you is the sales manager as he or she will set the lowest price the dealer will accept.
Best Price strategies–There are a few strategies to use when negotiating.
- Work from invoice up, not M.S.R.P. Down.
- Work on a particular model in stock.
- Be flexible to a point of options and color.
- Understand that the dealer has a time frame for when this car needs to be off the lot, be flexible.
- Some cars are just plain high demand/high price vehicles and are hardly discounted if at all.
- Be friendly, Be fair and most of all don’t get personal, it’s business.
- Shop a few dealers before settling on the best price and most convenient location for you.
- Check your own bank or credit union for bank rates.
- Be aware that the dealer Finance and Insurance manager’s job is to sell you a warranty and other high margin vehicle options and mark-up the finance rate. Be wary of them.
- Take a friend with you. Dealerships can be intimidating so it is nice to have someone on your side
- Hold your cards close to your vest and don’t say, “Wow, I love that car.” That’s a bad move.
A new car should be a great time in anyone’s life. That new car feel and smell. The new gadgets to play with and the look on the neighbor’s face all make for the fun. Overpaying for a car is no one else’s fault but your own, so do your due diligence, do the research and hit the open roads with that brand new car and know you got a great deal.
JibbJabber 