I first must say something that many do not want to hear. The job of a Car Salesman is to sell their car at the highest price possible and the customer is trying to buy the car at the lowest price possible. This is automatically set up to cause conflict, but you must realize a car salesman is hired and trained to make the dealership money. This makes some angry, but think about your own job. You are hired to make your boss or your company more money. If you are in customer service, your job is to make customers happy so they spend more and come back more often. If you work on an assembly line, your job is to perform your job as fast as possible to make more units at a lower cost per unit so your company can make more money. Any job you think of is in place to make the company money unless you work for a not for profit organization.
When you understand that a car salesman is there to do a job, it will be a lot easier to haggle and get a better price. Let me say this though. If your salesman lies or cheats you in any way, this is a whole different issue, I have no sympathy for a lying salesman--throw them to the wolves! I say haggling or dickering is good clean fun for both parties. Many customers enjoy this part of the sales process and many hate it, but I will show you easy steps to get a better deal on your next new or used car, truck, or SUV.
Now, with all that said, lets assume you know what car you are going to buy. You have done your preliminary research and have narrowed it down to at least a certain class of cars. You may be to the point you are comparing a Pontiac G6, a Nissan Altima, and a Toyota Camry. Try to narrow down to the point you are comparing 3 cars or 3 trucks etc. Don't get to the point you are comparing a Nissan Maxima and a Toyota Corolla unless you want to see which is going to be in your budget. You don't know how daunting it is to a salesman when you are comparing my top of the line car to a budget car at another car lot. And you are telling me my car is too high, but you don't want to look at my budget car. You can see what I mean, compare apples to apples.
Looking for a new car?
To negotiate to your advantage you must break your car deal into components. You are saying, Components? Yes, your car purchase has several affecting components. You may have a Trade In - 1 component, Price on the auto of your choice - 2ND component, and the Interest Rate at which you will finance - 3rd component. You also have some sub-components like how long you will finance your car. Will you finance for 60 months, 72 months, etc, but we will leave that for another discussion. Lets focus on Purchase Price, Trade In, and Interest Rate. These are the 3 main things that are negotiable on a new car purchase and used car purchase.
My first car negotiation tip is an easy one and the main component when buying a car. The price of the car your are buying is negotiable. You will have a salesman tell you the vehicle is already discounted from the factory with rebates. You and I both know the car can still be discounted from the dealership unless you are buying a Saturn with one price shopping. I will say GM has gone to value pricing and it has narrowed the margin of discount, but it still can be discounted. The best way to find out what you can buy the car for is at
Yahoo! Autos
This is a FREE service so take advantage of it. Just click the link and pick the make and model you are shopping. You will be taken to a second page with 3 simple steps. Fill in the form with which trim level, color, and any comments for other options. Fill in the 2ND step with your name, address, phone, and email. The last 2 questions are payment method to see if you will be using rebates, and buying how soon--put within 48 hours or your quote will be set aside. The 3rd step is important, make sure you check the box for (select all dealers). This will ensure you get the lowest price possible. Then click the button that says (Get Free Dealer Quotes). Sit back and check your email for the easiest way to get quotes quick. If you do nothing else, follow this step as it can save you thousands. You can also go back and select another make and model you are shopping to comparison price shop.
The second negotiation tip has to do with interest rate when financing your auto. Many do not realize that one of the most profitable aspects for the dealership is financing a car. Here is how it works. The dealership does not finance the car, they actually finance with outside banks and just do all the paperwork necessary for the bank. The dealership sends the signed paperwork to the bank and the bank cuts the dealership a check. This is why all dealership sales are cash sales, but cash sales do not make any money for these car-lots. The dealership pulls your credit and sends it to the appropriate bank. The bank sends an answer back that says your buy rate is 5.75% or whatever it is according to your credit. Now, pay attention, this is when the dealership says we can do the loan for you at 7.75%. These 2 percentage points on a 20,000, 30,000, or even 40 or 50,000 auto can add up. The bank will then finance your car, send the dealership their money for profit on the car and interest profit over what they charge. So the question is how do you know what interest rate you deserve. I would say check with your bank, but dealerships get lower rates than a customer from some banks so why not apply for a loan directly with a Direct-To-Consumer Lender, Roadloans. Dealerships are not allowed to use Roadloans as they only deal directly with the consumer. And, when approved you will get a blank check overnight in the mail with instructions to buy a car. Now you are a CASH Buyer!
The last negotiation tip is when it comes to trading a vehicle. This one is a little more difficult, but there are a few tips to ensure you get the most for your trade. The biggest problem when it comes to the trade in is negative equity. I have a few tips at
Negative Equity; Trading a Car When You Are Upside Down! Another way to avoid being upside down is to check out tips to
sell your car instead of trade. kbb.com is a good place to see what your car is worth. When you put your vehicle in, make sure you don't put excellent condition. The dealership must figure in expenses with your trade such as running it through service to check it out, detailing, getting dents and dings out, etc. Kelly Blue Book figures are a little high anyway unless you are in California or some of the other big cities.
When you have received your low quote, obtained financing, and found what your vehicle is worth, it is time to go to the dealership. It should be pretty easy at this point. You already have the price you will pay and financing, so it comes down to trade in at this point if you even have a trade. This should be the easiest car you have ever purchased.
Used Car Prices and how they are determined!
