When negotiating a deal, whether purchasing a car, furniture, or a house, most people get the short end of the stick. Even professional salespeople get burned when they become a buyer because they are intimidated by the sales process from the buyer’s perspective.
We Love Cars
Purchasing a car is the worst because it’s shiny and beautiful with lots of bells and whistles, and you want it bad. Trust me, the salespeople are licking their chops.
I’ve purchased hundreds of vehicles in my life for friends, family, and my profession. Here are tips I learned for negotiating the best deal.
Don’t be the Mark
Before we get into the dos and don’ts of making a purchase, remember that the person selling is looking for an easy sale. They hate “informed customers” regardless of how much they may schmooze you and your intellect for asking questions. They are there to sell and make money. They don’t want to be your friend, nor do they care what you think of them. Don’t think of the purchase as anything more than a transaction to benefit you.
Know What You Want
Don’t go to a car dealer looking for a car. Go to a Chevy dealer looking for a Blazer, go to a Ford dealer looking for an F150, go to a Kia dealer looking for a Soul. It’s okay to choose the equipment you want after test driving, but you may as well open your wallet or purse and let the salesman rob you if you walk in and say, “I’m not sure; I’d like to see something with good gas mileage.”
Find the New Guy
Car dealerships go through salespeople faster than millennials slurp down Starbucks.
The first thing I do is go to the sales desk and ask for the new guy or girl I spoke to on the phone. I never talked to anyone, but I want the newest person on the floor.
I Really Want the Boss
Why? Because Newbie means I’ll be mainly dealing with a sales manager trying to guide a rookie through their first few sales and looking to get them excited about selling cars instead of bleeding an extra buck from you. Experienced salespeople will leave you waiting for hours, pretending the manager is on the phone when they are just waiting you out to see if you’re a serious car buyer.
Understand the Process
Once you sit down with your salesperson, they will ask you questions and ask you to fill out some information forms. This is standard, so don’t be leery of giving them your information.
Read the Forms
Don’t be intimidated by anyone, and don’t be like almost every car buyer on the planet. Read everything the dealership puts in front of you, and don’t assume, “It’s okay,” because they are there to help you.
Remember, they are there to sell cars; you don’t matter to them.
The More You Know, the Better the Deal You Get!
You have done your research. You know what car you’re interested in, how much horsepower it has, its towing capacity, and expected gas mileage. Ask the questions you know the answers to and challenge the salesperson if they don’t get it right.
Remember, you have an inexperienced salesperson who has to run back and ask the sales manager every little thing because they just don’t know the answer. This tells the sales manager that you are engaged and will probably buy a car. It also distracts the sales manager from all his other work, which is a lot, and means you’re likely to get a great deal. Don’t be too nit-picky, or he’ll assign a seasoned pro to assist with the sale, and you don’t want that. Seasoned car salespeople will eat you alive. They’re outstanding; they would be selling cars if they weren’t.
Don’t Mention Money!
Next, they will ask what type of vehicle you are interested in purchasing and your price range. Don’t say anything about the price. Never mention a number. You know what car you want and how much it costs. If they are persistent, ask how much the vehicle you are interested in typically costs, then nod your head at the answer.
Don’t Let them Qualify You Before You’re Ready to Buy!
Car salesmen are lazy. Sorry, but it’s true. They all want the easy sale, and the first thing they want to know is whether or not you can actually afford to buy a car. We assume that you have decent credit and some sort of down payment, but even if you don’t, it’s none of their business until it’s time to buy. If they run your credit or get an idea that it’ll be tough to get you what they want, they will start making demands like, “Are you going to buy today?” I usually leave the dealership after hearing that one.
Here is where it gets rough. You found the car of your dreams and want it so bad you will sign anything to get it.
Take a deep breath and remember something no one ever considers. You will lose 20% of the car’s value the moment you drive it off the lot. It will become a genuinely used car in just a few months and start to decay after a few years. It’s not a diamond; it’s a means of transportation. It’s not worth what you will pay because a significant chunk of your money will go to the dealership in commissions.
Remember a few things when you sit down to make the deal. First, the dealership knows what it needs to sell the car for to make a profit, and they will never tell you what that is. You won’t ever get a car below that price unless someone screws up royally. However, you’ve done your homework and know what others have paid and know what you are willing to pay, but you still don’t say anything to the sales guy. Wait for him to give you the first number. Now you are in the game.
Just like a sword fight, this is where the opponents feel each other out and judge their competition. If you have a newbie salesperson, you should take advantage quickly. Get a quote on the car. Your response should be, “Seriously? “ with a look of disgust on your face. By now, you have proved yourself to be someone to be taken seriously, and the salesman has a legitimate reason to qualify you as a buyer.
A Game is Afoot
Now, you agree to have your credit checked, but you don’t commit to a down payment. Be vague and say I want to ensure I qualify for a loan first.
If you’re thinking of trading in a car, tell them you haven’t decided. You don’t want them to use your trade-in car against you. It’s complicated, but trading a vehicle gives the dealership room to play with numbers that are good for them and not so good for you.
Three Strikes and You’re Out
If you have trouble doing any of the strategies above, skip right to this one and make sure you get at least three offers. Usually, after three offers, you’ll get the sales manager to come by and make a final offer.
Come Prepared to Walk Away
Before Trump jumped into the rabbit hole of politics, he was a savvy businessman who lived by one rule in business, as he writes in his book “The Art of The Deal.” Be prepared to walk away if you don’t get the deal you want. A bad decision by you could cost you thousands of dollars. If you don’t like what you hear or feel you’re being pressured in any way, get up and leave. It’s their loss.
Playing Hard Ball
Don’t make the mistake of thinking you’ve beaten the dealership. If you negotiate the price you want, be careful of the add-on charges dealerships tack on to cars to get more profit. Sometimes, dealerships add as much as $2,000 to the price of a car with stuff you don’t need or want. Tell them NO! If they say it’s already been added, tell them to order you a car from the factory without the dealer additions. If they won’t go elsewhere.
The Finance Guy
So, the deal is done, and it’s time for the long walk into the finance manager’s office, where you sign your life away and they attempt to sell you additional services.
Just Say No!
Get on your computer and look up gap insurance, credit term life insurance, auto body protection services, auto maintenance programs, and dings and scratches coverage. They are designed to make the dealerships money and tack on hundreds if not thousands of dollars to your loan repayment. You don’t need any of these.
Extended Warranty Coverage
An extended warranty on the car is the only extra coverage worth having. Cars cost a lot of money, and most people will keep them for a long time. Nothing is worse than blowing a transmission two months after the factory warranty expires.
Enjoy the Ride
There are few experiences in life better than driving your new car. The smell is intoxicating, the ride is tight and responsive, and life seems a little better. It’s even sweeter if you drive away from the dealership feeling as if you were treated fairly and got the best deal possible. Enjoy.
Need a Loan?
Banks are usually the go-to-place for personal loans, but they don’t always offer the best deals.
If you need a loan, you should consider every option.
Read More: The Best Alternatives To Personal Loans
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