Use the Power of the Internet to Make the Dealer Cry!!!Oct 16 '01 Write an essay on this topic.
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The Bottom Line With all the free information available on the internet, there's no reason that you can't negotiate an excellent deal!
Once upon a time, a potential car buyer would enter a dealership like a wounded antelope limping into a lion's den. The salesperson would circle the prey, moving in for the kill. The poor buyer was pretty much at the dealer's mercy. After all, how could you possibly know what a fair price really is, when all you have to go on is the MSRP (which you should NEVER pay, unless you absolutely must have a car that is in short supply and big demand...then, you might even pay MSRP + more). Even back then, some savvy consumers would get their hands on invoice price information through a resource such as Consumers Reports. But woefully, they were in the minority. The majority of the time, the predators came out way ahead. Nowadays, the balance of power has shifted thanks to Al Gore's (ha ha) wonderful invention, the Internet!! Now, information on the invoice price is as close as your keyboard. You can enter the dealership not as an antelope, but as a big game hunter, armed not with a rifle, but with invoice numbers and a wealth of other information. For example, you need to know about the holdback. This is an amount that is "held back" by the car company and that will be paid to the dealer when he sells the car. This amount is over and above the invoice. It will either be a flat amount or a percantage of the invoice price, and it varies from car company to car company. Holdback information is not quite as easy to find as the invoice prices, but a good search engine such as Google will eventually get you there. Simply type in search terms like "car invoice price holdback" and of course the type of car you are looking for and you will get a list of relevant sites. The websites will also inform you of any special incentives, such as rebates or financing, that may be available on the car(s) you are looking for. Do your research before you ever set foot at the dealership. If at all possible, go shopping late in the month as you may draw a salesperson who is only a sale or two away from being that month's top dog. The hungrier the are, the better they'll deal. Of course, the best of all possible times is to shop for a car when you don't really need one. By this, I mean that you might be ready to replace your car, but it's not a necessity (i.e. your current car isn't dead, and you aren't desperate for new wheels). But even if you ARE desperate, don't let the salesperson know it. Act non-chalant--let them know you are interested in buying a car IF it's at the right price. Let the salesperson know up front that you've done your homework and that you know the MSRP is bogus and that the invoice doesn't represent the actual profit. Bring printouts from more than one website in case the dealer tries to tell you that the numbers aren't correct. If he still disputes them, even though you have matching numbers from several sites, have him put his money where his mouth is by showing you the invoice on the car you are looking at. If he refuses, he is lying...take your business someplace else. So what is a fair price? $500 over invoice is okay, and anything lower than that is getting into the territory of a good (or possible great, depending on how low you can go) deal. Don't let the salesperson pressure you. If you feel uncomfortable, leave! Remember, YOU are the customer. Be assertive, and don't let the salesperson take the upper hand. The best defense is a good offense--make your offer, stick to it, don't let yourself be pressured into anything, and if things aren't going well, WALK. My husband and I hve an agreement. He tends to get carried away and can be a real pushover. Therefore, I handle the negotiations. But sometimes we get in a dispute during the buying process, so we have a rule: if there is a dispute that could endanger the negotiations (and salespeople will pick up on this and try to pit you against each other), make an agreement that either one of you can call a "time out." That means that the dispute stops, and you leave immediately. If the salesperson knows you are going to do this, he won't try to encourage a dispute because the last thing he wants is for you to leave. Of course, once you get a good deal, the dealership will try to make a profit in other ways, such as on the finance charges, rustproofing, or an extended warranty. I am fortunate enough to be a credit union member, so the financing isn't relevant. I always say "no" to the extras (rustproofing is a waste on new cars unless you live in a horrible climate). However, I DO like the peace of mind that I get from an extended warranty. Most new cars come with three-year coverage, but I like the idea of extending that to five. That way, I can keep the car for the next five years without worrying about any unforeseen expenses. But do I pay for the warranty? NO!!! This is a high mark-up item, and I've discovered that most dealers are quite willing to throw it in as a deal sealer. When I'm hemming and hawwing, I let them know that this is the one thing that will make up my mind. If they are serious about wanting to sell me the car, they throw it in, and if not, I walk (I've only been refused once). Hopefully, the above tips will help you in your negotiations. Remember, you can be the prey or, with some research and an assertive attitude, you can be the predator. It's all up to you!!!  |
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