Purchasing a car is a little like playing poker. The dealer won’t reveal all his aces at once, and neither should you. Negotiating the best price is a matter of balancing your requirements against the dealer selling points. Make sure you keep a few aces up your sleeve for negotiation, and only make your final offer when you are exactly sure what you are paying for.
A savvy customer will be mentally prepared and sharp prior to setting foot inside the automobile showroom. Sales is psychology in action, and car dealers are experienced analysts looking to find a way to steer negotiations to a profitable conclusion. By utilising a few strategies you can control the negotiation from start to finish.
Is it affordable for you?
If you are purchasing a new car, remember it won’t be new for long. In fact, as soon as you leave the showroom with your new purchase the value of your vehicle will have dropped by around 20 percent. Even if you sell it the next day, you will be selling a second-hand car. Consider purchasing a used car with a couple of years warranty remaining. You will be getting the vehicle in almost as-new condition, saving you thousands of dollars, and you will have the peace of mind only a warranty can provide.
Try to keep your repayments within 12 percent of your net income. The joy of driving your new car will soon dissipate if it is accompanied by financial strain. Remember to factor in a generous approximation for monthly running costs also. Items such as insurance, petrol, unforeseen maintenance and general wear and tear should be kept in mind when working out vehicle affordability.
Use sales quotas to put pressure on your dealer
Many car dealers assess their sales performance at the end of the month. Sales staff are encouraged to reach targets in order to meet the dealers monthly quota. For this reason it’s a good idea to schedule your car hunting until later in the month. You might find that your dealer is offering increased rebates and bonuses at this time as they try to reach sales targets.
The pressure of reaching quotas means a dealer may be left with no choice but to sell at a much reduced price. Take advantage of this cycle as the buyer, and pressure your dealer into making a cheap sale in order to meet monthly sales targets.
There are always incentives
As you wander through the car yard searching for your new vehicle, you will notice the retail price boldly stated on the windscreen. Get ready to negotiate, because there is no way you should be paying the amount displayed. Make sure not to cave in to sales pressure, or you will end up paying more than you need to.
Manufacturers sometimes provide rebates and bonuses to dealers in order to move overstocked vehicles. Talk to the dealer and find out what bonus incentives are available as part of the purchase, and if the incentives don’t appeal to you, ask for the incentive value to be taken off the purchase price.
Car dealers are buyers too
A car dealer is in reality a middle-person between the manufacturer and the customer. The dealer will possess an invoice for the purchase from the manufacturer. Ask to have a look at the invoice. Understand that the dealer needs to make a profit but there should not be too much gap between the manufacturer price and the dealer price. If your automobile dealer refuses to let you view the invoice, you could be entering into an overpriced deal.
Stick to a payment schedule
The longer it takes to pay off your car loan, the more you will end up paying. Interest accumulates on a daily basis, and cars depreciate daily also. Instead of dragging out your repayments, put down the largest possible down payment and finance it over a shorter term. Make certain the monthly repayments are at rate you can comfortably afford.
If maintained well, your car should give you years of driving pleasure. By following the above steps you will get the best possible deal on your purchase and be able to recoup a reasonable percentage of costs when it is time to sell.