Strategic Considerations of Buying a New Car
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Strategic Considerations of Buying a New Car
Buying a new car usually means going to the dealer, choosing a make and model, discussing the price, and driving the vehicle off the lot. Sometimes it also means cringing at the thought that it will have depreciated in value by the time it arrives home a few minutes later!
Things To Know
- Experienced negotiators start with the dealer’s cost and negotiate up from that.
- Sometimes, it helps to know when to walk away.
- Some people negotiate from the price of the vehicle, not their monthly payment.
The discussion of price (haggling, in other words) is the part that’s most exhausting for many buyers, a fact that has led some dealers to offer "no-haggle pricing." No-haggle pricing isn’t always set in stone, however; there is sometimes a little wiggle room left. But the opportunity to save hundreds or even a few thousand dollars should be enough to convince you to learn some basic strategies.
Where to start
For starters, experienced negotiators don’t look at the asking price and then lower their offer. Rather, they start at the other end: they start with the dealer’s cost (invoice price) and negotiate up from that. In case the dealer’s cost isn’t apparent or you can’t get it from the dealer, you can find it online on sites like Autosite.com and Consumerreports.org.
Know when to walk away … for now
Once negotiations have started and you are going back and forth on the price, you have some tools at your disposal. One of them is the ability to walk away during negotiations. That shows the dealer that you are in control and cannot be easily swayed. Walking away and then staying home for a few days (or visiting another dealer) often gets the dealer to call you and sweeten the deal a bit. This works best when the dealer feels that you are genuinely interested in the car.
Indecisiveness = money
Another is the ability to be indecisive while on the lot. On one hand, you don’t want to tie up a dealer’s time needlessly, but taking more time to decide may persuade him or her to lower the price or toss in some free options. If it’s the latter, know in advance that you actually want those options and that they are useful to the vehicle.
Compare prices, too
You can save money by comparing prices among several dealers. Get quotes and print them out. Using these printouts can make dealers compete for your business; they might match other offers.
What’s your monthly payment?
A dealer will likely ask you how much you can afford for a monthly payment. While this is a fair question that helps him or her narrow down available choices for you, the dealer may stack on some options in order to make the final price match the monthly payment, if it didn’t before. This is why many people prefer not to divulge their monthly payment; rather, they negotiate only with the price of the car in mind. Another thing to remember is rebates. The dealer may mention them as a reason to ask for a higher price on the car. Rebates, however, are not provided by the dealer, but by the manufacturer.
Service contracts
A service contract is an extended warranty. The dealer may offer to sell you one. Since the new car will come with a warranty already, research the service contract to see whether it covers anything that the warranty does not. Find out how long it lasts, what repairs are covered, and who will do the repairs.