Negotiate The Price Of A Car In 4 Easy Steps
Negotiating is a nightmare for most people. However, it does not have to be scary or complicated. Negotiating the price is a process that includes extensive planning. It encourages you to walk away with a better deal. If you follow each of the steps, you will be able to negotiate the right price for a new or used vehicle.
Why Negotiate The Price Of A Car?
You might be wondering why you should negotiate the price of a vehicle. After all, you probably have your eye on a used vehicle and think it is the best deal you can get. Since dealerships come up with ways to maximize their profit, you should come armed with negotiation strategies.
When you come equipped with the knowledge and tools for negotiating, you will walk away with a better deal than you anticipated. Whether you are looking for a new or used vehicle, you want to approach each of your negotiations with hard facts and data. This means using online tools to research the vehicle’s history and compare prices. You can prepare yourself with the necessary information to make a wise decision without overpaying.
1. Determine The MRSP For Your Vehicle
The first thing you should consider is the Manufacturer Suggested Retail Price (MRSP) for the vehicle you have in mind. The MRSP is the price that the auto manufacturer and the dealership offer. It is easy to get an idea of the price when it is listed on the window sticker. This is where online comparison tools come in since they can offer the MRSP for your desired car.
2. Figure Out Your Budget
Next, you should have a budget in mind. Just because you found out the vehicle’s MRSP does not mean that you have to take that deal. You can determine your budget on the 20/4/10 rule, which means to finance the vehicle for more than four years, keep monthly expenses below 10 percent of your income, and agree to a down payment of 20 percent.
With a budget, you can afford any new or used car you have your mind on. Remember your budget does not just include the sticker price. It also includes add-ons, features, registration fees, taxes, and warranties. With this in mind, you should have a budget in mind. This prevents you from overpaying for features that you don’t really need.
3. Plan For Your Visit To The Dealership
Research the available dealers in your area. Get an idea of what promotions and incentives they are currently offering. Automakers and dealerships often offer deals throughout the year, including the holiday season and federal holidays.
Once you know the MRSP and your budget, you want to prepare for your visit to the dealership. Choose a time of the year when the salespeople have a quota to make. They are more likely to negotiate for a lower price. Also, bring a friend with you who is knowledgeable about cars and has questions you may not have thought of. It is always good to have a second opinion so you do not get swindled into a costly deal.
4. Negotiate With The Car Dealership
It’s time to start the process. When it comes to negotiating, you should focus on the total price instead of the monthly payments. The total price includes taxes and features. Start with a lower bid than the final price. This allows room for the salesperson to make a counter-deal.
While the price should be low, it should also be reasonable for the type of car you want. Remember to be friendly but firm during the sales process. If you find the salesperson pushy, walk out. They are more than likely to not give you a fair deal. Confidently doing your research, sharing your budget, and declaring what you want leads to the best option.
Do not be afraid to consider options such as trade-ins and financing. Determine the costs, loan terms, and rates of the loans offered by the dealership. Make sure to get more than one quote from various banks, credit unions, and online lenders before deciding. By negotiating all of these terms, you can remain clear-headed and in control of the process.
It is impossible to negotiate a deal by spontaneously walking into a random dealer without a plan. It is hard to believe, but sometimes the deals on television are not the best. Those dealers would rather keep the even better deals a secret so you can pay a higher price.
Arming yourself with the right information before visiting the dealership can save you a substantial amount of money. All it takes is a little education, homework, and preparation. Who knew that negotiating on a car can be easy and fun? Remember to review the paperwork carefully before signing to ensure the numbers are what you agreed to. Relax, have fun, and enjoy car shopping.
Always remember to run a VINsmart report on any used vehicle before making a purchase. A VINsmart report runs a complete history on the vehicle including whether it has ever been reported as stolen, involved in a major accident, or listed as a totaled vehicle.
VINsmart reports will also give you a registration history and mileage at registration. It reports any significant incidents related to the vehicle, such as being involved in a fire or flood.
When purchasing a used vehicle, the best way to ensure you make a good purchase is to know the vehicle’s complete history.