There’s no arguing that price negotiation is one of the most intimidating steps in the car-buying process — especially if you’ve never purchased a car before. If you’re a first time car buyer, we’ve come up with a few tips to help you avoid extra anxiety when it comes to dealer negotiations.
Have a car buying strategy
If a salesperson doesn’t take you seriously, he or she won’t budge on the price. And just as a car salesperson has to get the vehicle price approved by the manager, you should not accept a deal until it meets your terms. Your requirements don’t have to be set in stone, but having a plan ahead of time can take the pain out of the negotiation process and help you drive away satisfied.
Be prepared by researching cars onlineDo your homework so you know the average cost of the car you want. There are many online resources available to help you determine the vehicle’s invoice price, compare local dealer offers and discover additional factors that can give you a leg up in the negotiation room. When you’ve done all your research, come up with a realistic target price that includes all the options you want for your next vehicle.
Don’t agree to the first deal that comes your way
Chances are slim that the first figure a salesperson comes up with is going to be the best offer. Buying a car is a big deal, and you should not be afraid to reject the first quote if it’s not close to what you’ve determined as a fair price through your research.
Get preapproved for your auto loan
If you’re preapproved when you walk into the dealership, the only thing you have to negotiate is the cost of the car. Don’t let the dealer talk monthly payment — if you’re preapproved you already know what your monthly payments will be. Instead, focus on the car’s final price. The dealership will likely want to see if it can beat the terms on your preapproved auto loan, which may end up benefiting you. Remember, you can choose whether you finance with the lender or the dealer, so make sure that the dealer’s offer is truly better than what you already have before signing on the line. If you have poor credit or have difficulty getting preapproved, you may need to look at other auto loan options.
Dealerships have sales goals, and there are often incentives for salespeople when they reach their marks. Some experts say that shopping at the end of the day and at the end of the month can help you get the price you want. Keep your eye out for holiday and year-end deals, which can save you some money if you’re ready to buy.
If you’re still worried about negotiating with a salesperson, remember that you can skip this step altogether. You can hire a buyer’s agent, who will negotiate prices for you, though you’ll have to pay a fee for this service. There is also an increasing number of car dealerships that have no-haggle policies. That means the prices for all vehicles are set, so you can save yourself from the stress of trying to negotiate a better deal. Interested? Learn more about one-price car shopping and look around for no-haggle dealerships near you.