While buying a new car is a necessity, going through the steps to purchase your new vehicle can be nightmarish. We’ve all probably got at least one car dealership horror story to share, with one thing in common: Those poor car buying experiences could all have been prevented with a little preparation and research. If you’re in the market for a new car, don’t set foot into your local dealership without reading this article first. We’ve gathered four important things you should consider before facing a car salesman.
New Car Research
A little bit of research can save you a lot of money in the long run, especially if you’re dealing with some less-than-honest salesmen. Before you head out the door, look into the following things:
- Know all of the important information about your target vehicle, including engine size, options, safety features and anything else that you think might be important when making your decision.
- Decide what features you want and stick to that decision. Don’t let your salesman talk you into paying for a bunch of unnecessary features that you don’t really need.
- Learn your dealership’s policy on trade-ins and act accordingly. Some unscrupulous salesmen may use your trade-in as an excuse to increase your sales price, under the guise of a trade discount. If you have a trade, keep it hidden until you’ve already agreed on a price.
Most of these things you can learn with a simple Google search. There are plenty of online research tools available to the potential car-buyer. Print out all of your pertinent information, put it into a folder and take it with you. You’ll be surprised how much you can get salesmen to agree to if they think you know what you’re doing.
Negotiate for Your New Car
Negotiation is the key to a successful car purchase. Car dealerships expect you to try to negotiate a lower price for your new car, secure in the knowledge that most people don’t know how to successfully negotiate. Try these tips to help you negotiate the best price for your new car:
- Don’t Go Alone. If you’re alone, especially if you’re not confident in your negotiation skills, it’s a lot easier for the salesman to intimidate you into agreeing to whatever they want. Taking someone with you makes it harder for them to take advantage.
- Decide on Your Offer Before You Arrive. With a bit of research, it’s easy to learn what a fair offer is for just about any vehicle on the market. Don’t go more than a few hundred dollars over that offer.
- Price, Not Payment. Always negotiate your total sale price, not your payment price. It’s easier for car salesmen to slip in fees and other charges if you’re only negotiating for is your monthly payment.
- Don’t Be Afraid to Walk Away. Walking away from an unsuccessful negotiation costs you nothing. If they think you’re going to walk away, salesmen tend to become much more motivated to agree to your terms.
- Up, Not Down. Don’t start at the dealer’s MSRP and negotiate down. Start at the dealer price and work your way up to your fair offer.
Negotiation is the life’s blood of the car salesman, and if they are afraid of losing their commission on the sale, many will agree to just about any offer as long as it’s reasonable.
Financing a New Car
Financing a new car is usually the biggest hurdle that buyers face, often because they don’t know their options. There are really only two things that you need to remember when considering financing a new car:
- First, obtain your credit report and credit score. These will give you a good idea of your buying and negotiating power. You can get a free copy of each of your three credit reports from each reporting agency. Services like Credit Karma also offer credit score and report tracking for free.
- Second, DO NOT finance through the car dealership. By getting your auto loan through a bank or credit union, you can potentially save thousands of dollars in fees and interest. Dealerships usually offer loans with high APRs with no regard to your credit rating or borrowing power, which will end up costing much more in the long run.
While there are plenty of other things to consider when financing a new car, these are the two most important things that most buyers forget.
Beware Car Dealers
For every honest and helpful car salesman that you find in the world, there are 50 less-than-honest ones that are only interested in separating you from your money. There are currently more than 100 different scams that are known to be associated with car sales. Many of these unscrupulous salesmen are practiced liars that will tell you anything that they think will get you to buy their car. Thankfully, the general public is aware of these awful practices, and there are a fantastic number of tools to help you avoid them available at the push of a button.
How to Beat the Car Dealer When Shopping for a New Car – Final Thoughts
With a little bit of preparation and research, buying a car can be a fantastic experience. Don’t walk into that dealership unprepared, and you’ll come out on top every time.
Anum Yoon is a personal finance blogger and writer. She created and maintains her personal finance blog Current on Currency. You can subscribe to her blog newsletter right here for her weekly updates.