Be a Smart Shopper
Informed shoppers have an edge when negotiating price. To get the best deal, plan your moves and take your time:
- Know what you want, but be flexible. Narrow your list to two or three models that best suit your needs and pocketbook.
- Total the list and invoice prices for the models you're considering, including any options or option packages that you want, and add the delivery charge to both columns. If a manufacturer's rebate is advertised for a vehicle, deduct it from both the list and invoice totals. Your "target total" is the invoice price, though the final transaction will nearly always end up somewhere between the two figures. The final price will depend upon your knowledge and your ability to negotiate-and the salesperson's resolve.
- Research your present vehicle's fair-market trade-in value ahead of time by checking published guides or consulting a local lending institution. A vehicle's trade-in value is expressed as its "wholesale" value (as opposed to the "retail" value, which would be a dealer's asking price if the car were placed on a lot). Some dealerships can provide access to trade-in values at Black Book Online, a web-based service from the Black Book, which is one of the price guides most often used by dealers.
- You might want to "shop" your car or truck to a few dealerships' used-car departments. Ask each manager what the dealer would pay for your vehicle in an outright sale, and get the bids in writing. Keep in mind, however, that you can usually get more money for your car if you sell it yourself to a private party. Also, if a dealership isn't particularly interested in the vehicle that you have, the price offered is sure to be low.
- Shop competing dealers to compare prices on the same vehicle, with the same or similar features. You're not likely to get the dealer's "best" price for a vehicle just by asking (you'll usually have to dicker to obtain it). Still, this can give you an idea of how willing the dealer is to negotiate. Never put a deposit on a car just to get a price quote. Don't allow the salesperson to "steer" you toward a more expensive vehicle or a version that includes features you don't want.
- Ask if the dealer has the vehicle in stock, exactly as you want it equipped. If not, ask if they can obtain one from a dealer in another area. Don't give the impression that you're "in love" with a particular vehicle, though. A well-trained salesperson can use your emotions to gain the upper hand in price negotiations.
- Size up supply and demand for the car you want. A good deal on a slow-selling model might be below dealer invoice price, while a popular car can still command full suggested retail price or even more. Dealer inventories often tell the story. If you see large numbers of a certain model on the lot, it's probably not a hot seller.
- If you have a trade-in, don't acknowledge this fact until you've secured a firm selling price on the new vehicle from a salesperson. This way, he or she won't be able to "inflate" the trade-in value by manipulating the selling price of the new vehicle. (Such "adjustments" can sometimes work to your advantage if you need a larger down payment to qualify for financing, but you need to be on your guard).
- Never give your trade-in's keys to the salesperson. Your old car could wind up being held hostage while he or she pressures you to sign a sales contract on the spot.
- Test-drive the exact car you've decided upon -- before you buy. Think you want manual shift and a sport suspension? A 15-minute test drive might convince you to go with an automatic transmission and a softer suspension that produces a smoother ride.