Monday, 4 Jun 2012

7 Negotiating Tips for Car Buyers

If you’re in the market for a new or used vehicle, you’ve probably spent a lot of time trying to decide what type of car to buy. It may seem like there is a never ending list of things you should know about any given vehicle–fuel efficiency, safety features, and warranty terms are just a few factors to mull over. Another thing to consider is the price. That’s an area where a lot of people struggle, because it’s standard practice when buying a car to try and get the best possible deal you can from the seller. However, there are a few negotiating tips ever car buyer can employ.

Be Prepared

Before heading off to the dealership to buy a car, it would be to your advantage to do some research–not only on the type of vehicle you’re considering, but on the dealership as well. Ask your friends and neighbors what type of car they own and whether or not they’d recommend it. Determine what type of car you’re interested in, and do your research to find out what a good price would be. The more you know about the vehicle, the better prepared you’ll be to come away with a good price. The same goes for a car dealer. If a number of people have nothing but bad things to say about their car buying experience with a particular person or dealer, then you would be well advised to avoid them. If a certain dealer is praised repeatedly for their business practices, you may want to consider buying from them.

Don’t Become Emotionally Involved

A car dealer’s job is to try and sell you a vehicle for as much money as they can. It’s your job to try and keep the price at a reasonable level. An experienced dealer will try and make you fall in love with the car they’re trying to sell you. Make every effort to avoid becoming emotionally attached to the car. If you fall into the trap of loving the car, the dealer will sense it, and you may never get the kind of deal you’re looking for.

Arrange Financing Before You Shop

Because a dealer does business with lending institutions at a volume rate, they are frequently able to get better interest rates than you will be able to. Unfortunately, they also want to make a profit from their offer to finance your vehicle, so they charge more than the rate they’re getting. You would do better to try and arrange your own financing ahead of time. This will also allow you to know exactly how much money you have to spend, so you won’t be tempted to overbuy. Another consideration is to make sure your credit score is as high as possible so you’ll qualify for lower interest rates.

Go Easy on the Extras

A car dealership will probably make more money from the extras they sell you than they do from the car itself. They’ll undoubtedly offer you an extended warranty and rust proofing, among other things. Although these may ultimately be beneficial, you could probably get them cheaper from another source. The same thing goes for insurance coverage–you would be better off arranging for an insurance policy with your own provider.

Ask for Discounts

When you’re negotiating a price with the dealer, be sure and ask for any discounts that may be available. This is another area where having your financing arranged beforehand can be to your advantage, because in some cases the savings you would normally get from any discount would be absorbed by the higher price of financing through the dealer. If additional discounts are available that you don’t qualify for, ask what you would have to do in order to become eligible for them.

Comparison Shop

Don’t simply walk into a car dealership and buy the first car you fall in love with. You should look at buying a car as a marathon and not a sprint. The object is to get a vehicle you like at a price you can afford. If you’re impatient, you’ll more than likely end up paying far more than you would if you take your time and visit a few dealers before making a decision.

Be Realistic

Be realistic in your expectations. If the MSRP (Manufacturer’s Suggested Retail Price) is $40,000, don’t expect to make a deal for $15,000. The dealer expects you to try and negotiate a good price, but they have to make a profit too.

Guest post from Sam Landon. 

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