Negotiation

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Note:
This is the most hazardous part of the car buying process, where its the easiest to get confused or bamboozled and end up spending far more than you should.

However, with our easy to follow guides you should be able to navigate through the hazards and come out with a great deal.

Before you begin the negotiation process its important that you are aware of some of the more common pitfalls and how to go about all of the 3 main paths of buying a car.

Not all of this section is relevant to all methods of negotiation so it is broken down as follows.

  1. General tips and tricks of negotiation
  2. The advantages and disadvantages of the 3 ways you’re most likely to buy a car
  3. A step-by-step guide to negotiating your best car deal via email
  4. A step-by-step guide to negotiating your best car deal in person
  5. Guidelines for using an online purchasing service such as carsdirect.com

1. Tips

Negotiate the price, not the payment. You an use the tools on this site to calculate what your payment will be based on the selling price and interest rate. Car dealers love what they call ‘payment buyers.’ If you buy your new car based on a monthly payment, you have no idea what is being used to calculate that until you need to sign the papers. The dealer could be quoting you based on a 72 or even 84 month long loan rather than the 60 month loan you’re assuming. You could even end up in the finance office and realize you’re about to sign a lease when that wasn’t what you’d planned.

Until you sign and drive, you can always walk away/cease email communication. Don’t let the dealer fool you, it doesn’t matter what you said, what you agreed to in an email or that you signed some random scrap of paper, you are not obligated to buy the car until you sign the official sales contract (usually a very long document with multiple copies). If you feel uncomfortable with the deal or with the way you’re being treated, walk away, or in the case of email negotiation don’t respond further for the moment.

Don’t feel pressure to buy today. Unless there are incentives expiring tomorrow its only in their best interest that you buy today and not yours. The dealer will often tell you ‘This deal is ONLY good for today, if you don’t sign RIGHT NOW, we won’t sell you the car at this price.’ That’s just a pressure tactic. Walk away and come back a few days or a week later and amazingly enough they’ll be willing to make that exact same deal.

2. Pro’s and cons of the 3 main approaches to negotiating your car purchase.

Negotiating in person and then closing the deal at the dealership

Benefits Disadvantages
Personal, you build a relationship with the dealer and salesman 1. You’re negotiating on someone else’s turf, where they’re most comfortable
2.They have far more experience doing this than you do and have all sorts of techniques to break down your resistance and get to you agree to a higher price than you want
3. You have fewer options, you will have to find a different dealership to go to if you can’t find
4. Its easy to get worn down and end up agreeing to a deal just to be able to leave

Negotiating online through email and then closing the deal in person at the dealership

Benefits Disadvantages
1. You can get quotes from different dealers and play them against each other
2. You have a variety of options of who to work with, if you don’t like the way one dealer is responding to you you don’t need to continue negotiating with them
3. You’re negotiating on your own terms and not theirs, there’s no real pressure to make a deal *right now*
4. You’re most likely to get the best possible deal
1. Not as personal, usually end up dealing with the volume/fleet guy or a manager
2. You still need to go into the dealership to test drive and close the deal and can fall prey to the pitfalls of dealing with the finance manager

Using an online purchasing service to buy the car at a pre-negotiated price, never interacting with dealership sales personnel.

Benefits Disadvantages
1. Negotiation-free the price you’re paying is clearly stated from the start
2. No hassles with having to go into the dealership to close the deal and possibly get fleeced in finance
3. No pressure to buy
1. You won’t get as good of a deal as you would if you negotiated yourself using method 2
2. Not personal at all
3. Still need to go into the dealership and test drive

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