Are you dreading that trip to the car lot to haggle with a salesman over a new vehicle?
If so, you’re far from alone. In a recent survey by auto information source Edmunds, 83 percent of U.S. respondents said they’d rather avoid such negotiations altogether, while one in three reported they’d rather compile taxes or conduct business at the DMV than face such rigmarole.
“Buying a car isn't exactly what most would describe as a pleasant experience,” writes Landon Dowdy on CNBC.com. “You tempt yourself with the thought of driving a shiny new set of wheels, then comes the reality of the annoying haggle. What's worse than the haggling is that many buyers often end up with the wrong car after the process.”
That said, negotiating on a car purchase doesn’t have to be unpleasant if you go into it forewarned and forearmed about how to shoot for the best deal. Consider these suggestions for getting the most palatable price on your car of choice.
- Analyze your needs and wants before stepping foot on a lot. How much can you afford in a down payment followed by monthly payments? How much space do you need? What features are must-haves? Will you trade lower gas mileage, more expensive repairs and/or higher insurance costs for a higher-status model?
- Consider which nonstandard features are important to you; otherwise, you may end up paying extra for features you don’t care about or will never use. Further, most options hold little to no value in the aftermarket (exceptions include sunroofs and alloy wheels), though you might have to accept lower costs upon selling if your car doesn’t include now-common features like air conditioning, power windows and automatic transmission. “We suggest choosing features solely for peace of mind,” advises Doug DeMuro on AutoTrader.com. “If you end up getting some money back when you go to sell, that's just a nice bonus.”
- Note examples of the models that might best fit your needs, then check out market prices on Kelley Blue Book or Edmunds.com so you know what ranges to expect.
- Plan to pay cash if you can. Otherwise, shop around for the best financing before visiting a lot, then see if the dealer can beat the best deal you’ve found. (This strategy works best during bankers’ hours when dealers can immediately confirm your bank loan.)
- Ask dealers to talk about price in terms of total amounts, not monthly payments, so it’s easier for you to compare apples to apples. Longer terms likely mean lesser monthly installments, but more interest paid over time.
- Read dealerships’ online reviews to look for perks recently offered to others, then ask for those perks yourself.
- Shop various dealerships, including online sources, to compare prices. Let them know you’re researching several deals; often competing dealers will throw in rebates or other incentives. You may prefer to conduct your deal online rather than haggling in person. However, if you think you’re not being offered the best price or financing rate based on your research, don’t hesitate to move on.
- Extended warranties (the extra-cost varieties that extend beyond 90 days) are typically only used by about half their purchasers, according to a recent Consumer Reports study that advises spending the money elsewhere.
- Types of tire warranties offered include tire life, tread life, road hazard, workmanship/materials, manufacturer’s specials and uniformity. Consumer Reports calls them all “next to useless” because of the many stipulations involved in filing successful claims.
- Similarly, BankRate.com advises against spending any extra money on rustproofing, fabric protection or paint protection offered by dealers, as they’re unneeded in modern vehicles.
- When buying new, consider buying at the end of a model year when prices will be lower. The last week of the year can be an ideal time to buy new.
- Salesmen will have the most time to discuss deals with you if you shop on weekday afternoons.
- Given a choice between a certified pre-owned (CPO) car and a non-CPO used car, choose the CPO. The longer warranty and extra quality checks are worth the extra cost, and the APR on your loan should be lower as well.
- Don’t automatically reject cars with accident histories listed on Carfax or AutoCheck; some may have been subject only to minor dings or fender benders. A mechanic’s inspection can reveal the true story.
- Consider the extra cost of upkeep associated with older, high-mileage cars; the vehicle’s service manual can advise you.
- Dealers are more likely to drop prices on cars that have been on a lot longer than 60 days; if in doubt, ask the dealer to see the vehicle history report to determine when it came in.
- Former rental cars are often good values because they’ve undergone regular maintenance and tend to be newer models (with higher-than-normal mileage).
- Don’t inform dealers you wish to trade in your car until their final offer has been made, as they may otherwise use that as a negotiating point. Note that you’re almost certain to recoup more value from your current car if you sell it yourself instead of trading it in.
If you treat your next car purchase as a process that starts with a little research, you’re far more likely to get the best bang for your buck when all is said and done.
Amplify Credit Union can offer you optimal financing options for your next car purchase. Contact us at 512-834-6509.