1. Don’t Go on Emotion
Take your time to find out the exact car you want and research the available options. Learn what other people are paying for that car before you go into the dealership. That information is available (usually for a fee) from several websites, including Edmunds.com and ConsumerReports.org.
2. Break It Down
Separate your negotiation according to every profit center the dealer has: price, rebates, trade-in value, interest rate, lease rate, bank fee, alarms, maintenance, warranties, and any other products the dealer is offering.
3. Don’t Fall for False Urgency
Nine times out of 10, a deal the salesman quotes you will be available the next day (unless it’s the last day of a special program). Prepare yourself to walk out of the dealership if you are being pressured and are uncomfortable.
4. End of the Month Is Good, But…
The end of the month is not the only time to get a great deal. Dealerships are always motivated to sell cars. If you do want to take advantage of the dealer’s urgency to meet his monthly goal or quota, start your negotiation a few days before.
5. Don’t Waste Your Time
Before you start negotiating, make sure the dealer has the particular car you want in stock. If he doesn’t, he can usually trade for it with another dealer. This can take a few days, and there is no guarantee that the dealer that can get the car for you. If not, you’ve wasted your time. Moreover, dealers typically offer better deals on cars they have in stock.
6. Check the Switch
If a dealer proposes to switch you from a new car to a used car, or vice-versa, get all the information on the second car. Then go home and research its market value. Take any false urgency such as, “This pre-owned car is a very special, rare, low-mileage car that may be impossible to replace,” with two grains of salt.
Sometimes these pitches are at least partially true. If you feel that the car the dealer is showing you really is special, leave and gather your information quickly. You can always ask the dealer to hold the car for a while.
7. Lower Payment Isn’t Lower Price
If a salesman offers to lower your monthly payment by changing the terms of a loan or lease, he may not be offering much of anything. This is a common way to present a more comfortable payment for you without having to lower his price and profit.
8. The Early Bird Gets Rolled
If you’re the type who has to be the first on your block with the new Mustang, fine, but you probably won’t get a good deal. The hype surrounding a new model (or a new version of an existing model) tilts the supply-demand ratio in the dealers’ favor, allowing them to charge retail or even more when the new car hits the showroom. If you wait a few months for the actual inventory to arrive at the dealer, you’ll usually get a better price.
9. Keep Future Buys in Mind
Set yourself up to be in a good position to get your next car. If you are going to purchase a car with little or no money down and you plan to replace it within 36 months, you will likely end up owing more money on the car than it’s worth. This could create a cycle of taking negative equity from one car to another, further burying yourself in a negative trade cycle. Instead, lease it for a 36-month term, and you’ll end up with a paid contract at the end of the lease.
10. A Call Ahead Saves Time
Call the dealership before going there and ask the salesman to have the car you want to drive ready. If you don’t, it could have a dead battery, be buried behind other cars or even be stored off-site.