Can you buy a car and get a great deal? Many dealers advertise no-haggle pricing, but that doesn’t mean there’s no room for negotiating.
Buying a car requires a lot of legwork on your part before you ever set foot on the dealer’s lot. If you don’t do some research or explore your options, you’ll end up in a deal that costs you a lot more money than it should. This process actually ends at the dealership, but some people think it begins there. Here are some ways to prepare yourself and get a better deal.
Set and stick to a realistic budget
How much car can you actually afford? This is one of the most important questions you’ll answer when you go car shopping. If the car doesn’t fit into your budget, you’ll dread driving it and look for ways to get out of the situation. Your budget needs to include payments, insurance, maintenance, and fuel, which means your car costs a lot more than the monthly payments. Review your budget and see where a car fits; this will help you understand how much you should spend on a car.
Research cars that fit your budget
When you want to buy a car and get a great deal, understanding fees and add-ons that you don’t want to pay or purchase will make a huge difference. If you can, secure a low-interest loan before heading to the dealership. This puts you in a much better negotiating position. Research where a dealer should have some wiggle room; every $1,000 in car price represents $20-$40 in monthly payments. Doing your research will help you get a better deal.
Keep information to yourself
Although most car dealers make the buying experience much easier than ever, there are still some aspects of the experience where you need to stay sharp and avoid giving too much information. Don’t tell the salesperson too much. Focus on the total price of the car, not the monthly payment. You already know your monthly payment limits, which translates to a specified total price. If you’ve secured a pre-approved loan from the bank, all you need to discuss is the total price, which can give you an edge during negotiations.
Don’t let add-ons become part of the deal
The process of buying a car can be a little overwhelming, but you should be fully aware that every item you allow to be included in the deal is part of your monthly payment. If you can live without the dealer add-ons, negotiate them out of the deal. Additionally, some of the fees charged at the dealership should be paid for in cash. This helps keep them out of your deal as well. If you can only have the vehicle price become the payment, you’ll come out ahead.
Examples of unnecessary dealer add-ons are:
- Paint and fabric protection
- VIN etching
- Nitrogen-filled tires
- Pinstriping and decals
Longer car loans are problematic
How long should your car loan actually be? Considering cars depreciate quickly during the first five years of ownership, this is the longest any car loan should be. Many financial institutions and dealers now offer loans of six or seven years, which is troublesome and problematic. These longer loans often have higher interest rates that are hidden in the lowered payments because the loan is spread out over more time.
Shop around for the right deal
In today’s market, brand loyalty means a lot less than it did many years ago. Some dealerships don’t honor earned discounts, such as employee pricing, which are designed to bring current and former employees to specific brands. Show around and find the vehicle that meets your needs the best, regardless of brand. Find the right deal and the vehicle that fits you, ensuring you’ve got the car you want to drive and enjoy every day.
Use the test drive as part of the negotiation
If you want to buy a new car, you might not find as much wrong with the vehicle as you will when you test drive a used car, but there could still be a few items. In addition to securing the right deal, the car must fit your needs. You’re not shopping for a sports car when you need a family van to carry your crew to your next destination. Test everything and see how it works before you leave the dealership.
Use these tips to buy a car and get a great deal. Your car is usually the second largest payment you make every month; figure out how to make it more affordable.
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