- Buying & Selling New & Used Cars
Saving money guide: Buying a new car – how to get the best deal at dealerships
Lots of people will have to buy a new car at least one time in their lifetimes. Car dealers are still trying their hardest to get a huge profit out of you. It is important to learn the tactics for getting the car you want at a great price. This hub is a guide on getting a new car; everything here is based on personal experiences (I bought my Toyota Highlander 2011 model at 300 dollars below invoice in late 2010).
Know the invoice price and the car that you are getting – Doing your homework before going to the dealership is key. I cannot stress enough that you need to know which car you want. The car dealership is pro at talking people into getting the more expensive vehicle. You must have a solid idea on the model that you want to purchase. Prices are not secrets anymore; this information is all over the internet. The MSRP is the price the car dealerships want to sell you for and invoice or slightly below is what you want to spend.
Know the car's trims and accessory costs – Other things that the car dealership can make money off of you is through a more luxurious trim and accessory costs. They will try to sell you the more expensive trim and accessories. You should know how much they cost and know beforehand if you want to purchase any. The recommendation is to not purchase accessories because they will easily put you over your original budget.
The fleet manager and internet sales department – The internet is your friend and will let you know so much information. In terms of purchasing a new car, it is no exception. Many websites allow you to make inquiries about a specific car and within minutes, a few dealerships near you will contact you regarding the car's sales price and information. The fleet manager and internet sales department can get you a good deal on a new car with very little haggling. This route is recommended for those that are not great at haggling.
See the actual invoice price of your car – If you want to purchase a vehicle from the dealer and the sales person is sincere about selling you the car, you will be able to see the invoice price. When looking at the invoice price, you should make sure that the invoice price is actually for the car that you are buying. For any reason that the sales person refuse to let you see invoice price, you should walk out immediately. That sales person has no desire to give you a good price.
Purchase with all cash or walk in with a pre approved loan from your bank – Many financial websites have stated that purchasing anything with cash is smart. Of course, you will not be paying interest which will save you money in the end. Car dealerships have expensive loans that you don't want to touch. Go to your bank and get the best loan deal possible there if you cannot purchase with all cash.
Do not trade in your used car at the new car dealership – This is so important because the car dealership will for sure give you a low amount for the used car. When you buy the new car at your desired price, the dealership will still make a ton of money out of you. It is like making up their profit with your used vehicle. You are better off selling the used vehicle privately or at another dealership.
Prepare to demolish his four square tactic – As you may already know, the car dealership and sales person are still using the four square tactic to get maximum profit. Here are the four squares, trade in value, purchase price, down payment and monthly payment. You must demolish the squares to survive the sales person's tactics. The trade in value square should be slashed from the beginning; you don't want to do trade in at the dealership in which you buy a new car. Purchase price is your main goal that you want to haggle down to a desired point. When the sale person asks you about down payment, you should take control of the conversation by saying that you are not sure and move back to the purchase price. The sales person will try to win back grounds with monthly payment. You have to say that the monthly payment is not important and it all depends on the purchase price. To get the best deal, you really have to have your own loan or plan to pay all cash. The important part of your job is to haggle the purchase price (the amount to get you out of the door).
Big dealership vs small dealership – From my experiences, big dealerships tend to be more difficult to bargain than small dealerships. If you want a great deal at a new car, prepare to shop around with several dealerships because not all of them want to give you a bargain.
Don't be afraid to just walk away – This point is similar to the last one. If you don't find the desired price at the dealership and no one is helping you with the price, you can just walk away. Some dealerships purposely let the customer wait longer because they don't want you to get that great price without a fight. Don't be afraid to just walk away if the sales person is unwilling to give you that price. Another dealership will be willing to consider your offer.
Prepare to haggle to get your best price – Here is the last point, you really have to complain properly to get the best price possible. As a smart buyer, you have to pay attention to the fine details. Here is an example with my situation. When I purchased my highlander, it was only available in pebble white not in silver like I wanted. The interior is also a lighter color which I made clear it wasn't something I wanted. At the final haggling, the sales person talked with his supervisor and agreed to give me the invoice price. However, I was able to use these details about what I didn't want but willing to accept to get another 300 dollars off. In the end, the purchase price was 300 dollars below invoice on a model for the following year.