You can be a skilled shopper; price is matching your groceries or shopping for merchandise off-season to get the best deals, but when it comes to car shopping it’s a whole different story. Those hours spent negotiating the price, arranging financing and finally completing the purchase are about as enjoyable as going to the dentist.
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Therefore, the more informed you are, the easier your negotiations will be. If you do just a little work before heading to the dealership, you can save yourself a lot of time, money and stress. Here are a few of our tips for negotiating the best price for your new ride.
Know a good sale
Dealers use the Manufacturer’s Suggested Retail Price (MSRP) as a starting point for sales, but that’s not what they paid the manufacturer for the vehicle. Instead, that price, known as the “Invoice Price,” is a secret. At least, it used to be. Now, several vehicle comparison websites publish this invoice price on the Internet.
Unhaggle.com, Edmunds.com, and CBB.com log actual transaction information based on location. So you can find out how much dealers in your area paid for a car, as well as an average of how much recent buyers spent.
With this information, you can better negotiate the price you want to pay. During negotiations, incrementally increase the price you are willing to pay from what the dealer paid (invoice price) while keeping the market average in mind. Do this instead of starting at the MSRP, which is higher, and will be much harder to haggle down.
Another aspect to consider is the popularity of a vehicle and how long it’s been on the market. A brand-new or modern car is going to be speeding off the dealer’s lots. They aren’t going to part with a car for less than the sticker price since there are people ready and willing to pay in full. A car that is a few models old or not as famous is going to be your best bet for getting a deal.
Think big picture, not month-to-month
Don’t get caught in the trap of narrowing your perspective so much that you base your vehicle selection on how you can break down it’s price to your fit your monthly budget allowance. Instead, think about how much the car will cost overall and make sure to accommodate other expenditures, such as interest and any additional financing charges.
Focusing on bringing down your monthly payment to as little as possible will motivate the lender to extend the length of your term. They may even add charges and increase your interest rate. All of that would result in paying more in the long run, which you were trying to avoid.
Use a loan calculator to determine what your monthly payments will be. These can generate an estimate using the average market price of the car you’re interested in considering your monthly income.
Know the right day, week and month to buy
While there is no exact day for car shopping that guarantees you a deal, you can use time in your favour.
Don’t be surprised if everyone and their mother wants to give you their two cents about when the right time to buy is. Some people think that going later in the day is the best time because salespeople are antsy to close the deal and get home. Others believe that going towards month’s end means you’ll get a better deal from dealerships trying to make their monthly quota.
Visit a dealership in the morning, while others are at work and the sales floor is quiet. The sales team will have more time to help answer all your questions. Evenings and weekends tend to be the busiest time for dealerships.
Aside from the time of day, you can also consider the month. Since August and September are traditionally when manufacturers release new models, they are the months to get a better discount on the previous year’s model. The only sacrifice you may have to make is regarding colour; getting a year-end bargain may mean popular colours are running scarce.
Don’t fall in love (too quickly)
The negotiation process leans in the dealer’s favour if the salesperson knows you are in love with a particular vehicle on their lot. They won’t be as lenient with pricing if they know you are already drooling over that model, but if the rep knows you’re comparing several makes and/or models at other dealerships they will be willing to play ball.
In this case, don’t be bossy and demanding, because it’s just as easy for the salesperson to respond to an aggressive strategy. Remember the golden rule, be polite and respectful, and you should get the same in return.
Play hard to get
It doesn’t only apply to dating! Be patient and remember that it’s okay to leave the dealership lot without a vehicle. One of the salespeople will likely contact you a few days later to see if you’ve made a decision. With days passing by the dealer will wonder if you have found a better bargain. Use this to your advantage and some dealers may provide even more price flexibility.
Hopefully, these tips will help you make a smart and affordable decision when it comes to negotiating the price of your new car. Being an informed buyer means a less stressful transaction and a more flexible loan solution.
Now that you can successfully negotiate the price of your new vehicle let CarLoans411.ca help you secure the financing. We have solutions for everyone and years of experience getting people with every type of credit situation approved for a car loan. You are just a few minutes away from utilizing your new negotiating skills! Apply now