Every ex-car salesman turned writer has his “Top Ten” list of tips on how to get the lowest price. Well, I’ve got 14 tips and we’re halfway through them (here’s a link to Part 1 of my list in case you missed it). So come along and have some fun buying your next car!
7. Go With the Cheapest Car. This may seem obvious, but if a low price is your goal, start with a low priced vehicle. Don’t go for the most expensive brand and most expensive model they make — the one with leather and nav and all the “bells & whistles” — and try to whittle the price down to that of the stripped out model with the bolt action gearbox and roll-up windows. Start with the lower priced, lower optioned vehicle and then negotiate. You’ll save yourself a lot of time — and heartburn.
Or, if big discounts are your thing, look for manufacturers with the least popular models. The big incentives are placed on vehicles that don’t sell, not the ones that do. So don’t just consider the Top 3 Sales Leaders in a particular segment. Check out the 8th, 9th, or 10th best-selling models as well. They may not be as bad as you think.
Brand is also a factor. Some brands have lower manufacturing costs than others, which translates into more “wiggle room” on price. In general, German and European cars have the highest cost of manufacture, therefore the least amount of wiggle room. Japanese and Korean makes are somewhere in the middle, and domestics have the most mark-up (again, this is a very general statement and varies from brand-to-brand, model-to-model). Regardless of brand, the highest mark-up is found in the most expensive vehicles. In a Cadillac Escalade or Audi A8 you can probably get $5000 off the sticker and still allow the dealer some profit. But not a Chevy Cruze or A4. So gauge your expectations for discount on the popularity of the car, the make, the available incentives, and MSRP.
And just because there’s a big rebate or “Customer Cash” offered, don’t assume you can’t negotiate price. Remember, the dealer is reimbursed for any rebates, so a rebate — no matter how big it is — doesn’t cut into his profit one penny.
8. Take Advantage of Sale Events. Before I got into car sales I used to look at ads for big sales and think “Those sales are for suckers. I can get the same deal anytime I want, because I’m such a shrewd negotiator.” Well, maybe. But sales are run to create a sense of urgency in the buyer. When a sale is over, it’s over. Most manufacturers run their sales for 30 days. At the end of each month, that month’s programs end and new ones begin. Sometimes the incentives get better, sometimes they go away completely. Never assume “it can only get better” — because the only certainty in every sale is: eventually, it will end.
9. Line up Your Financing in Advance. These days, the dealership can beat the rates offered by local credit unions — most of the time. If you have excellent credit and have 1.99% lined up at your local bank, there’s a good chance your dealership has a lender that’s willing to do 1.79%. So be open to the possibility of financing through the dealership. But having your own financing set up in advance gives you options, and also power — to keep the rate low.
10. Buy out of Stock. If you want a good deal, don’t make the dealership go to another dealership to get a car just because you’re in love with Mystic Mauve Metallic or certain options. Pick something on their lot. Why? Because trading with another dealership costs the dealer money. In most cases, the “holdback” stays with the originating dealer. So does advertising money. The dealer will also have to pay one, or possibly two, drivers to get the car, and that could cost anywhere from $50 to $1000, depending on how far away it is and how you want it transported. In addition, any dealer traded car may arrive with hidden surprises. This could range from a rock chip in the hood that happened on the drive over, to an optional spoiler that was never disclosed by the other dealership but still costs you money. If saving money is your priority — and not color — always pick something from inventory.
And if you really have patience, study the dealer’s inventory and find a vehicle that’s been on his lot for 45 or 60 days or longer. The longer a car sits, the more it costs the dealership, particularly when it comes to used cars. If it just came off the truck yesterday they may not be anxious to deal. But if it’s been sitting there 279 days… you can bet they’re ready to see it go.
11. What to Say When you get There. Okay, let’s say you’ve done all of the above, and you’ve located two or three dealerships in your area with a good reputation, and you have the names of a good salesman at each. Maybe you’ve even called ahead and made an appointment to drive a particular car (I would strongly recommend making an appointment. This says to your salesman you’re serious, and you want to put things on a professional basis.)
So now you’re at the dealership. What do you say?
I’m going to give you a little script that contains some “Magic Words” that will put the salesman on your side and enlist his full co-operation. It’s important that you repeat these Magic Words only when you’re ready, and mean them, otherwise the spell will be broken and you’ll be cursed with recalls and untraceable electrical gremlins for the rest of your days. Here’s what you say when you first meet your salesperson:
“I understand your dealership needs to make a profit , and you need to make a good commission for all your hard work. But I want you to understand that I need to be treated right, and I need to get a fair deal . I don’t mind somebody making a little money, but I’m not going to let you make your month on me. If we like the car and you treat us right and we get a fair deal, then I’m ready to buy today . But if that doesn’t happen, if I feel like you’re wasting my time or not being straight with me, I’ll leave and buy elsewhere. Fair enough ?”
The words I’ve highlighted are all words and phrases that car salesmen use when talking to each other and their customers. So by using them you’re “speaking their language” and showing them you aren’t a fool. You know the business. And you’re ready to deal. The power of “Make a Commission,” “Fair Deal, “Buy Today” and “Buy Elsewhere” is phenomenal.
12. If Things go Bad, Vote With Your Feet. The most effective thing you can do if you ever feel you’re not getting anywhere is not to get angry, not to raise your voice and scream and yell and cause a scene in the middle of the showroom. The most effective thing you can do is quietly stand and leave.
Nothing gets a salesman’s — or a manager’s — attention as quickly as someone standing up and heading for the door. My feeling is, as long as my customer is seated, they’re trying to buy. They may threaten me with leaving, but as long as they’re seated they’re just negotiating. The minute anyone physically pushes back their chair and rises… that’s a different story.
I don’t mean you should take this lightly, or do it as a stunt, or just to get another $50 off. I’m saying if you’ve tried your level best to be reasonable and fair and worked hard to meet the dealer “somewhere in the middle,” and you’re still not where you need to be, you have to be mentally prepared to walk out and not come back. If they let you go, that really was their “best number.” If they chase you out the door and give you a different number, you know they were holding back on you. Now you have their best number.
13. Know When You’ve Won. Life involves compromise. In every car deal there comes a point where the bottom of the well has been reached. Both sides have given all they can give and there ain’t no more to give. At that point it’s time to “Do the Deal” or simply walk away. If you like the car and you’re in your target range in terms of price or payment, relax and enjoy the moment. Getting a new car is a good thing. Don’t agonize too much over it. Yes, you may feel you could’ve gotten a little more off — but the dealer probably feels they could’ve “held a little more gross.” If the deal makes sense, do it — and don’t look back.
14. Don’t worry, be happy... and don’t forget the survey!
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