4 Tips To Saving A Bundle At Your Next Car Auction
Many of us have been at the car dealership and have been drained by a salesperson during price negotiations for the purchase of a new car. Most people give in too easily or do not negotiate at all to avoid the dreadful act. This only means more money in the car dealers’ pocket, while you are out of several thousand dollars! Yes, they make that much in profit per car.
This article unveils the dealer’s selling tactics and how you can get around them. But before we dive into the new car buying tips, we need to understand what makes up the dealer’s profits.
In addition to the MSRP (manufacturer suggested retail price), which is the dealer’s cost for the car plus an additional 20-25% profit, a dealer also gets financial incentives from the manufacturer when a new car is sold. This is called Holdback.
Depending on the car, dealers can make hundreds on each car through holdbacks. Dealers also get additional incentives and bonuses on selling a car before the end of the month and/or quarter.
A shrewd dealer can make several thousand on a new car even by selling it at invoice price. This is how new car buying can become tricky for the consumer.
Ready to learn how not to put a dent in your wallet on your next car purchase? Here are four tips to get you started. Each one is a dealer tactic to watch out for.
1. The Guilt Trip
As you may have noticed, every desk in a dealership has photos of the salesperson’s family, instead of photos of cars. Midway in the negotiation, the sales person will bring them up and make it look like his little commission check can hardly pay for his daughters college and little Bradley’s braces.
A seasoned salesperson will soon have you feeling guilty for driving the price down and hurting his commission. Watch out not to fall for this tactic, since you already know about holdbacks and incentive programs from manufacturers.
2. Wearing You Down
Come prepared to spend half a day at the dealership or pay whatever the dealer asks for. Car Dealers are trained to delay and tire you out to the point where you give in and accept their price just to get out of there.
After you make your offer, sales people typically claim they would have to run it by their manager. You may then have to re-start negotiating with the manager, who is also a seasoned salesperson. This dance goes on for a while until you give in.
Remember, there are multiple dealerships in a city, so they need you more than you need them. Demand to speak to the manager after a certain time period or threaten to leave.
Because you are devoting a lot of time to bargain with the dealer, they know you are a serious buyer, so they will not let you leave. The earlier you can speak with the manager, the faster you can leave.
3. The Test Drive
We all enjoy a good test drive and look forward to it. Although it is essential to test drive a car before you buy it, remember to not show your absolute love for the car to the salesperson. Their goal is to get you emotionally attached to the car, so it becomes a must have for you. I have learned it the hard way.
To hide your emotional tears from the salesperson, mention the features of a competing car in the same class, like the new shape, light, leg room, resale value etc. This will make the salesperson a little vulnerable.
4. Monthly Payments
This one is to confuse you. Dealers will start talking about monthly payments rather than the total price of the car. They will start by asking how much you are willing to pay per month and how much of a down payment you are willing to pay. Since people don’t want to look like they cannot afford a certain car, they will usually give a higher number. Big Mistake!
You have left little room for negotiation when this happens. Always steer the conversation to the total price of the car and do NOT mention any trade-ins at this point. Only after the total price of the vehicle is completely negotiated then talk about interest, monthly payment and trade-ins.
As a general rule, remember to only focus and negotiate on the Total Price of the vehicle. Everything else is pretty much the car dealer’s trough.
What You Should Not Do When Buying A New Car
For people who have failed their mechanical aptitude test, the difference between a handbrake and the fender would probably be something that needs consulting in the dictionary. Buying a new car is never easy but for some it can even rival the SAT.
With hundreds of articles handing out tips in buying a new car, you should know by now what you should look for, what you should bring and what else you should do, but do you know what you should not do when buying that new car you want?
Never go without knowing what you want.
In buying a new car, it is not uncommon to have one or two choices but please keep it at that. Having more than two choices will spell not only trouble for your pocket but also a waste of your time. Knowing what you want when buying a new car will give you the confidence to talk to car dealers plus it will also enable you to ask questions specific to the car model. This will also allow you to do some research before hitting the stores. Believe this, there is no one dubious car dealers want more than buyers who do not have an idea what they want when buying a new car.
Never negotiate for something that you know nothing of
When haggling with dealers, do not negotiate until you have already canvassed the price. This is a no no in buying a new car. If you have no time to scout for car prices, you can always go to your car dealer’s websites or even ask friends and people you work with. Just tell them you are buying a new car and they will be more than happy to help. That way, you know what the bottomline and you know whether that bottomline can fit your budget.
Never let on that you absolutely need the car
Attitude is the name of the game when buying a new car. Remember that dealers need you more than you need them, so don’t act as if the car is the last of its model on Read the rest of this entry »
