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How to get the best deal possible on a new car!Mar 19 '07 Write an essay on this topic.
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The Bottom Line If you stay smart and think ahead of the dealer, then it is easy to come out ahead.
When you are purchasing a new car, the best thing to remember, is that you are the one in control of the deal, not the dealership. The dealership tries to make it out like they are the ones in control of the entire process by pushing you through a variety of steps, but if you change up the process, you make it difficult for the dealership to get the deal that they want, which is beneficial for you. The first thing to know is that money is power. If you have the money on your or you walk in with a preapproved loan, you are many steps ahead of the dealership. If you don't have a loan already, the dealership is going to act as if they are doing you a favor by getting you such a great loan amount, such a great rate, or incredible terms. If you walk into that dealership with cash or that pre-approval however, the dealership already has one disadvantage against them and it makes it that much more difficult for them to earn their money. Now, once you have this money, don't tell them exactly how much you have, just tell them what you are looking for and that is it. As soon as they know how much you have, this allows them to either talk you up to a higher priced vehicle, or throw additional junk into the deal to raise their income and your overall cost. The next thing to know is that you don't need to make a deal that day. Make it appear as if you don't really need this vehicle, but you are seriously interested. By doing this, it will put them in the position of making you a deal. Tell them that you are interested but the price that they have, no matter how good it sounds isn't quite what you would want to pay for that vehicle. It also helps to know the actual value of the vehicle, so I suggest checking out www.kbb.com . This is a free service and you can find out how much you should be paying. The goal is to get the cost much lower than that. Don't settle for their advertised rate! They can go lower, always. If they want the sale, they are going to do more to sell you that vehicle, even if it means only making $250 on it. That's $250 more than they had before and they'll take it. If the car is advertised at $12,000 and they say that's the best they can do, tell them that you don't think that car is worth more than $11,000 and that if they could reach that price, you'll take it. Most dealerships will give you that price in hopes that they can get you in other ways. Once at the signing table, the finance guy is going to try and sell you on a variety of things, however, rather than selling you, they will probably just try to get you to sign off on these products, which could add substantial amounts to the cost of your vehicle. Which will be much more than the stated price if you have a loan. The big things to look for are clear coating, fabric guard, rust protection/undercoating, extended warranties, life insurance, gap insurance, and lifetime oil. Most people will unknowingly get talked into all of these services, not realizing that they are paying substantially more than they normally would if they just purchased them seperately. Here is the breakdown on the above items: Clear coating - Why? It's a brand new car, the paint will be good for years with or without this. It will cost you a thousand dollars to do virtually nothing as most new vehicles are clear coated out of the factory. Fabric guard - Just buy some scotchgard for $5 and have fun. This isn't worth the $500-$1000 that they charge you. Do it yourself, it takes literally 5 minutes. Rust Protection/Undercoating - Unless you live in states that use salt on their roads, this doesn't really matter. In fact, as long as you wash your vehicle, it really doesn't matter all that much. Most people trade their vehicles in FAR before they ever have enough rust to ever worry about this. Extended warranties - Most new vehicles come with a 3 year, 36,000 mile warranty and some upwards of 10 years. These extended warranties barely cover anything, and really just wind up costing you thousands of dollars without any real benefit. Insurances - You don't need the life insurance, it's far more expensive through them and GAP insurance is good, but I recommend purchasing it through your current insurance provider as it will be substantially cheaper. Besides, most insurance companies only need GAP insurance to cover the cost of your vehicle if it is your fault for the accident. Lifetime oil - This is the biggest waste of money, because the only way you can get the true value out of it is if you stay near that dealership and keep that same vehicle for 10 years or more. This is highly unlikely. The biggest issue is that the dealership generally has limits to how often you can use it. Normally, you can only go 3 times per year. This means that you'll probably still be paying for oil changes out of your pocket anyway, on top of the expensive oil package you just purchased. Ultimately, stay smart, don't buy any extras, you can always add those on later if you decide you want any of the services. I'm sure they will be much cheaper in the long run. Don't act desperate for a vehicle, don't disclose how much you have to spend, and don't accept their first offer, EVER. The big thing is to not drive that vehicle home overnight. This is the best way for them to get you and they won't negotiate with you as much if they think they have you sold on it, and you driving it home is almost as good as saying you are sold on that vehicle.  |
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