Buying New Cars

Tips on Getting the Best Deal on a New Car

As Americans, most of us hate to negotiate. It makes us uncomfortable. There are some subtle tips most people are not aware of when buying a new car. ., An expert on negotiation offers the following tips.

When buying a car there are four basic steps you must take:

1. Decide on the car you want.

2. Find out the dealer cost. (Dealers of most domestic cars pay two to three percent less than the dealer invoice.) You can look for the dealer cost on sites such as consumerreports.com, Edmunds.com and chiltons.com.

3. Commit yourself to paying no more than a few hundred dollars more than dealer cost.

4. Avoid the dealer gimmicks to get you to pay more (such as financing, trade-ins, packs and fees).

Before You Go to the Dealer

If you are trading in a car, find out what it's worth. Local classified ads are helpful and can be found on the Internet.

Visit banks or credit unions to find the best deal on financing. If possible get pre-approved for a loan, but don't sign any binding documents yet.

Try to purchase a car as close to the last day of the month as possible. Dealers are under pressure at the end of the month to reduce their inventory.

Select a car from the inventory on the lot. You'll have more leverage this way.

Haggling

Tell the salesperson you're prepared to purchase a car immediately from the dealer who gives you the best price, that you need his best price now, and that you're comparison shopping with other dealerships. When you show the salesperson your calculation and what you're prepared to pay (only a few hundred more than the dealer cost), prepare yourself for an indignant response from him.

If you're asked if you'll be financing or trading in a car, say perhaps, but you don't want to talk about these things until you've settled on a price. Don't let them know you've already been shopping for a loan.

If the salesperson refuses to give you a firm offer, tell him that he'll be out of the running. Use this same approach with each dealer you visit. When you get the lowest price, tell him that he's close but you have a better quote (don't tell him how much it is).

Once he offers an acceptable price, tell him you'll close the deal if you get free floor mats, oil changes or a full-sized spare tire (etc.). Try to get a little something extra. Jim calls this a nibble.

Once you've agreed on a price, the salesperson will now try to sell you undercoating, rust proofing and fabric protection. Pass on all of this. The factory has already applied them. If you want an alarm system, upgraded radio, tinted windows and they are not already included in the price, you can get them later from a specialist and you'll pay much less.

You'll now be sent to the finance manager who will try to sell you a loan, extended warranty or an option to lease. Do not get the warranty or the option to lease. Only take the loan if it is better than one you've already found.

You can now drive away happy, knowing that you've gotten the best deal on your car!