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How To Make An Offer They Can't RefuseJul 24 '02 Write an essay on this topic.
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The Bottom Line Know your "enemy", and what makes them tick; and never, ever forget that you ALWAYS have the upper hand when making a new car purchase.
Buying a new car at a great price is as simple as knowing what makes the dealership tick. Following are a few of my tried-and-true methods of getting the best deal possible ... even from those dealerships with a "no-haggle" reputation. DO YOUR HOMEWORK. Know what prices the "big guys" are charging so that you can use that to your advantage in making an offer. Shop several larger dealerships in preparation for your purchase, and use the internet to obtain pricing information. Know exactly what features are available, and which ones you want. Get in the mindset that you WILL get exactly what you want, and never accept anything less; after all, the informed consumer is the happy consumer - and the happy consumer never paid too much. PLAN YOUR TIME FRAME CAREFULLY. Choose a time when the dealerships are interested in decreasing their stock. Some of the best times are at the end of the year (they don't have to pay taxes on the cars that are gone off the lot) and when the new models arriving (they need the space). Okay, you've got your ammunition and you're ready to do some serious negotiating on the car of your dreams. What to do from here? EVERYTHING'S NEGOTIABLE. Let's start with the basics. You want a car, and they want to sell you a car. However, you can walk away at a whim, and still get what you want somewhere else. Keep that in mind at all times - you have the upper hand. If the dealership absolutely refuses to negotiate price, you're paying too much by definition. Generally speaking, a good rule of thumb is this: if you feel like you are being pressured, you probably are. If you feel like you are being scammed, you probably are. Trust your gut instincts, they'll never steer you wrong. Instead, let them steer you away from the dealership that makes you feel uncomfortable. SHOP THE SMALL LOCAL GUYS. The key word here is local, and there are a few good reasons for this; the most obvious is getting to test-drive and examine in detail the actual car in question prior to purchase. However, there are larger considerations as well. A local dealership is more likely to give personalized service-after-the-sale; in this age of internet purchases, it may not seem like an incentive to you ... but it will become a major consideration for anyone who experiences the dreaded occasional lemon. It goes without saying that, lacking a large customer base, the smaller local dealership has a vested interest in keeping your business for future purchases, as well as maintaining your loyalty so that you will refer others to them. The larger dealership has far more overhead than the smaller dealership. Furthermore, the more visible the dealership, the more cars they will sell. For this reason, it is a good idea to seek out the dealerships which are off the beaten path - their overhead is less, yet they sell fewer vehicles; and thus are more willing to negotiate. Which brings me to my next point about smaller local dealerships vs large dealerships. The large dealership wants your business. The small dealership NEEDS your business. This has nothing to do with sentimentality for supporting small business, and everything to do with determining how much they want to sell you a car. DON'T USE A TRADE-IN. When you trade in a car, you always pay more for what you're purchasing. The dealership makes a lot of money from selling used cars, and absolutely will not pay you what your car is really worth - if they did, they'd never make a profit on resales. It is far better to save up the downpayment, and sell your current car in the private sector. Okay, so you're in a tough spot and have no choice but to use a trade-in? Don't let them know that information until after the price is negotiated. This way, they'll be willing to come down on the price far more than if they were figuring in the price and potential profit margin of reselling your current vehicle. BEWARE THE COMMON SALES PLOYS. The "puppy dog" approach is most common, and shockingly simple; if you cuddle a cute little mutt long enough, you're more likely to take it home. The same principal applies to car sales. This is behind one of the most common consumer complaints, the dealership's "never let them off the lot" mentality. Don't become "friends" with the sales person. The sad fact is that they're not becoming your friend, you're becoming their sales prospect. A common strategy is to pretend to bond with the customer. How many times has a salesperson casually asked, "where do you work?" As non-threatening as it sounds, that question really means, "how much can you afford to pay for this car?" There is no such thing as a "simple" question at a car dealership. It is therefore of the utmost importance that you resist the impulse to make too much small talk. Remember: everything you say can and will be used against you at a car dealership. PLAY THEIR GAME. If you have your heart set on a particular car, never let them know that fact - these are professional sales people, and they will use your weaknesses against you. Guard yourself - the best way I've found to do this is to go in with the intention of discovering their weaknesses instead. If you do this, you are far less likely to let too much information slip out. I like to ALWAYS 'find' something about a car that is less than satisfactory to me - it can be something as small as the location of the cupholders, but never anything as large as the style or color. Ensure that the salesperson knows about this little "problem". To sell a car to someone who appears to be less than thrilled with it is a challenge to the salesperson ... and one they can rarely resist. BECOME THE SALESPERSON. No, we're not talking about body snatchers here. You want them to sell you a car at a particular predetermined price, right? That's your product - your money. Sell your money to them, just as hard as they are trying to sell the car to you. ALWAYS SHOP AT THE LEAST BUSY TIME. If the dealership is handling multiple customers, they have far more sales prospects and thus far less incentive to negotiate your purchase. I prefer to arrive on a weekday afternoon, and test-drive until a few hours before closing time. That gives me enough time to ensure it is the right vehicle for me, while placing them on a time schedule to make the deal. In other words, take the pressure off yourself and put it on them. KNOW THE REAL VALUE OF DEALER INVOICES IN THE NEGOTIATING PROCESS. Don't just take their word for it; examine the invoice very carefully. Most dealerships will show you a "Memorandum Invoice" if you lowball them. Be aware that this is NOT the actual statement of what they paid for the vehicle. Such documents show what the dealership would have paid if not for their manufacturer's discounts and incentives. Don't be afraid to confront them with this - these discounts could lower their actual purchase price by thousands. DON'T GET UPSET. Negotiation is an art, and one which cannot be hurried. If you get upset, you'll be off your game. Stay cool. When a salesperson says something I don't like, I tend to laugh aloud about it while tossing them a "you gotta be kidding" look. Humility is not the sales professional's strong suit - but you'd be surprised how far it goes when properly applied. HAVE YOUR MONEY IN HAND PRIOR TO NEGOTIATING. Nothing spells a successful deal quite like waving a check under the manager's nose. I call it the "steakhouse experience" -if they can smell the money, they'll become hungry for your business. Even if you are getting a loan for the vehicle, this can be accomplished by simply knowing how much you are willing to pay, and obtaining a loan in that amount beforehand. My favorite ploy is sitting at their desk, writing a check in the amount I wish to pay, and simply stating, "I have a check in my hand for {amount}, if we can come to a deal right now". You know what they say, "Money walks ..." It's absolutely true - but in this case, money drives away with a great deal. DON'T BE SHY ABOUT DEMANDING THAT TAX, TAG & TITLE BE INCLUDED IN THE NEGOTIATED PRICE. These are the oft-forgotten additional fees that can make the negotiated price much higher than meets the eye. The dealership simply calculates the totals, and deducts that amount from the negotiated sales price. It's easy for them to do -- but you will never find a dealership willing to deduct from their bottom line unless you demand it. KNOW HOW THE DEALERSHIP MAKES ITS MEAT AND POTATOES. Never, ever allow the dealership to add on such items as undercoating, clearcoat, accessories, etc. If the car actually needs these items for your climate and geographical driving conditions, they will already be applied and thus be included in the sticker price. Always be aware that these items are almost pure profit for the dealership, and as such they will try everything under the sun to push them on you. Stay firm, and "Just Say No". CALL THEIR BLUFF. When you make an offer, make it firm. When they try to negotiate, restate your original offer - and keep waving that big check under their nose. You stand to lose nothing, while they stand to lose the very reason they are in business - to sell cars. DON'T BE AFRAID TO WALK AWAY. The dealership wants to haggle over a couple of hundred bucks? Stand by your guns, and be ready, willing, and able to walk away. I once had a salesperson say to me, "I can't believe you're paying cash for this car, and you'd let a couple of hundred bucks spoil the deal." My response? "How do you think I got the money to pay cash for a car? Certainly not by paying even a penny more than I have to pay ... for anything." I walked away ... only to receive a call the next morning, saying the general manager had approved my offer after all. Good luck, and remember: you are in control of your car-buying experience, and no one else. You decide what you want, what you want to pay, and how much salesmanship you're willing to tolerate. As such, you are the one and only person who can make your buying experience a pleasant one.  |
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