Most consumers agree that they hate nothing as much as shopping for a car. Car salesmen have a reputation for squeezing every last dime out of their customers and they are actually pretty good at it. Why…because car salesmen are excellent negotiators. They negotiate all day every day so when you step on the lot, you better come prepared so you can find leverage against these experienced negotiators. The next time you step onto a car lot, try a few of these negotiating tactics and you just might find yourself driving home in the car of your dreams.
Timing is Everything
Just like all other salespeople, car salesmen work for incentives. Bonuses are typically awarded at the end of every month, quarter, and year so you want to time it right to get the best deal. Sometimes, dealers will even take a loss on a car because the sale will help them reach their quota and they will receive an incentive that makes up the difference. Your first, and maybe your easiest, negotiation tactic is time.
Know the Facts
Just like in any negotiation, you must be knowledgeable of the facts if you want to gain leverage. It’s pretty hard to argue about something you know nothing about. In terms of buying a car, this means to do your homework and know what the car is worth. Do some research and find out what other dealers have sold similar cars for, and use this information to your advantage. Remember to offer a little less than others have paid for the car so you will have some room to negotiate.
Bring Your Own Financing
Car dealerships offer their own financing and it can be a good deal. However, like everything else at a dealership you have to be cautious. Dealerships get a commission from their bank for every customer they send their way, so naturally, they are going to push you to use their financing. If you bring your own financing, a dealer might be more interested in selling you a car because the deal is not dependent upon the financing. This can end up getting you a better price.
Play the Game
If you want to walk away a winner you have to be able to play the game. This means you have to play the dealers off each other. There is absolutely no way you can tell how big of a discount any dealer will give you because you don’t know how close they are to reaching their incentive. The only way to find their bottom line is by shopping around. Tell the dealer you have a lower offer somewhere else and even show it to him. If he tells you to “take it,” he has hit his bottom line. Call around and find out the lowest price you can get it. This is your leverage and your ammunition for negotiating.
Don’t be Afraid to Walk Away
As with any negotiation, the golden rule is: “you have to be willing to walk away. “ Decide on your bottom line number and if the dealer isn’t willing to meet your terms you can’t hesitate to walk out. Be polite but firm in your bottom line and make sure the salesmen knows if he can’t make that happen you will take your business somewhere else. Be patient…if the dealer can find a way to get to your number he will be calling you back. They don’t want to risk losing a sale.