If the 100-degree heat waves across the country have convinced you that you need a new car – with reliable A/C – you may be considering a trip to a new car dealership. But you’re probably not looking forward to it. After all, who likes to negotiate with car salesman?
As it turns out, more than half of Americans do. An Autotrader.com survey found that 56 percent of all car buyers actually want to negotiate because they “do not yet trust flat-rate pricing, and they feel that they have to negotiate to get a fair price.”
If you’re among the 56 percent, here are five negotiation tips from Consumer Reports.
Do your homework.
Research what the dealer paid for the vehicle and get bids from other dealerships or car-buying websites. Print them out so you have facts to back up your words, which will give you confidence. Also, decide exactly what car you’d like to buy and which options you’d like. Make sure you test drive the vehicle first. Don’t let the salesperson talk you into a vehicle you don’t like or extra options that may inflate the price … and their profit.
Don’t negotiate using monthly payments.
This allows the salesperson to combine the price of the new vehicle, your trade in, warranties and even financing, which gives them the opportunity to make up what they lost negotiating with you. Instead, negotiate one thing at a time. Start with the price of the new car. Only after you’ve agreed on that, discuss trade in value, warranties and other extras.
Prepare for a counter offer.
Start the negotiations with your lowest offer. Consumer Reports suggests the invoice price, minus incentives, plus and extra $100. If the salesperson asks you how you arrived at that figure, explain how you calculated it. The salesperson will probably leave to discuss your offer with a sales manager and return with a counter offer. It will be far higher than your target price. Don’t be argumentative, but stick to your guns. Tell the salesperson if they meet your target price, you’ll buy immediately. If not, you’ll leave and shop around. And remember, don’t let the salesperson counter with trade in value or other extras before settling on the new car purchase price.
If you plan ahead and get preapproved for a loan from your credit union, that means you’ll be paying in cash to the dealer. That means the salesperson can’t use your credit score or dealership financing as negotiation tools. Again: focus on the purchase price only.
Know when to say yes.
If you are offered a price that’s in your target range, accept it and move on to trade-in and other arrangements. You might consider trying to get an even better deal elsewhere, but if the price truly represents what you’ve researched first online and only provides minimal profits for the dealer, you probably won’t find a better deal somewhere else.