Getting the Best Price on a New Car
You may think getting a good deal on a brand new car may be next to impossible. It is if you don’t prepare for and have a negotiation plan ready when you go car shopping. Here are some tips to make your car buying experience easier and help you get the best price possible.
Determine your needs and budget
Before you start shopping, determine how much you can afford to spend on a new car. Next, ask yourself, “What do I really need in car?” Make a list of your “must have’s.” After that, write down the options you’d like to have. Finally, visit manufacturer and dealer websites to see what cars and options fit your budget.
Consider other costs
Once you have a few models in mind, check with your insurance company about much your premium will be to insure them. Compare the fuel economy ratings for the vehicles you’re considering at the EPA’s website, http://www.fueleconomy.gov.
Decide on a “target” price
Consult an online price guide to find out the manufacturer’s suggested retail price (MSRP) and invoice prices of the cars you’re considering. The final sales price is usually somewhere between the two.
Find your best financing option
Shop around at various financial institutions to see which one is offering the best rate. Keep in mind you might only qualify for the best rate if you have an excellent credit history. Check the manufacturer’s websites for special deals being offered by their finance companies.
Know your vehicle’s trade-in value
Determine your car’s trade-in value by visiting an online valuation site such as Kelly Blue Book or Edmunds. Be conservative when assessing the condition of your car.
Check out the special offers on manufacturers’ websites. You might find cash rebates, cut-rate financing, or other sales incentives.
Take a test drive
Take a proper test drive. Otherwise, how will you know if the car has enough head and legroom for you and your family? How will you know how it handles and if you’ll enjoy driving it?
Start a bidding war
Get online bids for the car you want from multiple local dealerships and some not-so-local dealers. Take the lowest bid and see if the other dealers are willing to beat it.
Negotiate the best price
Make the car’s invoice price your first offer. The dealership will most likely make a much higher counteroffer. Raise your offer incrementally until you agree on a price that is within your target range. Never start the negotiation with the car payment you can afford to make. Keep that information and your financing deal to yourself or the dealership will make you an offer to fit your target car payment. That’s good but not when you could have gotten the car at a lower price.