Shopping for a new car can be exhausting and confusing. We all know that nobody pays the sticker price, but it’s hard to determine how much you really should be paying. Fast-talking sales staff are trained to get as much money out of you as they can, but these three tips will help you save big on the showroom floor.
Brush Off the Out the Door Up-Sells
First of all, it’s important to remember that the war hasn’t yet been won even after you’ve settled on a price. Salespeople bank on the fact that once you’ve agreed on a number you’re more likely to let your guard down a little bit. You’re relieved that the negotiation is over, and this is exactly when the sales staff tries to tack on a few hundred extra dollars if they can. These may come in the form of “Closing Fees,” “Marketing Fees,” or any other type of “Fee” but the fact is, if a cost wasn’t disclosed in the negotiation, you shouldn’t have to pay it. Speak up! If you tell them it’s a deal-breaker they’ll usually be able to waive the fee.
Another psychological weakness they’ll want to take advantage of is the sunk-cost fallacy. After you’ve spent thousands of dollars on a new vehicle, you’re far more likely to think “Oh, what’s a few more hundred dollars?” Next to a four digit price tag, a set of floor mats for $100 doesn’t seem so bad, and maybe you wanted some mats anyway. But the truth is you can find better floor mats online, and usually for half the price. In fact any of these last minute add-ons (whether they be window tinting, security systems, splash guards, nitrogen in tires) can almost always be found much cheaper at a retailer or specialist.
Pick the Right Time to Shop
Be wary of big publicized sales events which are common at car dealerships. Every Memorial Day, Labor Day, 4th of July, or anything else most dealerships air ads, fill up balloons, and get ready to sell. But this is actually one of the worst times to buy. While they may have advertised special deals and offers, these offers most likely pale in comparison to what they’re capable of negotiating. Or worse, they’ll try to distract you with flashy free gifts like TVs or Tonneau Covers which are actually already built-in to their promotional pricing.
Like you might imagine, car dealerships get their busiest when most people are off work – nights and weekends. This is when you’re likely to see a handful of people walking around, and many people think this is the best time to go, reasoning they won’t be hassled by as many salespeople. But the best time to shop for a car is actually early on a weekday when the place is a ghost town. This is when the sales staff has time on their hands, and are more likely to sit and negotiate. You want plenty of time for negotiating to get the best deal, and if there are a lot of people on the lot your salesperson may give up on you after a few minutes so they can try their luck on the next customer.
Don’t Get Distracted from Negotiating a Total Price
Trade-in value? Special offers and rebates? Financing options? Don’t worry about any of these things until you’ve agreed on a total price that you’re happy with. All of these things are meant to confuse you and allow the sales staff to trick you into paying more than you want. It’s hard to negotiate the value of a trade-in vehicle at the same time you’re negotiating the value of a new vehicle. The sales staff knows this and they’ll use this confusion to their advantage. Don’t even tell them you have a trade-in. If they ask what you plan to do with your old car tell them you’re not sure yet. Once you’ve agreed on a total price for the vehicle, then you can tell them you’d also like to discuss a trade in.
The same goes for any rebate offer you saw, and especially for financing and agreeing on a monthly payment. Agree on the price first, and then let them tell you about monthly payment options. In many cases, financing is where a dealership makes the lion’s share of their profits. The reason is they know they can dazzle customers into driving off in an overpriced car if they can show them a low monthly payment. But you’ll pay for the difference and more in interest. If you have the funds to buy a new car outright, you can save a lot of money this way as well. But similarly, don’t tell the dealership you plan to pay in cash until you’ve agreed on a total price.
We hope these tips help you get the best deal on your next car. Remember, all of the power is in the hands of the buyer and you never have to go along with a deal that you don’t like. There’s no shortage of new cars in the world, and the last thing a dealership wants is to see you walk off the lot empty-handed.
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