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Buying a car can be an intimidating experience. There's industry jargon, aggressive salesmen, and list price features that can quickly push you beyond your intended budget. Worst of all, even a novice car salesman is more than equipped to run circles around all but the savviest of consumers. Fortunately, there are a few smart tips that you can follow to help you navigate the seemingly daunting world of car buying.
Hagglers are the people who’ve done their research and are determined to get a good deal. They’ll debate with a car salesman and aren’t afraid to walk out of the dealership if they don’t get the price they want. They even try to get a few extras thrown into the price for free.
Not everyone is aggressive enough to be a hardcore haggler, but anyone can try to get a good deal. It’s less about pushing the salesman to take the price lower and lower and more about being reasonable about the price and working with the salesman to get a price you’re both okay with. Do your research so you know what the cars you’re looking at are going for. Check Kelley Blue Book to find the fair market price of any car you consider. Make sure you don’t pay more than the suggested price, and if you can get it lower than the suggested price yet still in the fair market range, even better.
When shopping for a car, remember that dealerships are, first and foremost, commission-based businesses. What does this mean? It means that managers and salespeople are trying to hit specific quotas every month and for the whole year. Quotas are generally lower and less important at the beginning of the year, but as you get into the latter part of the year, you’ll start to see better deals, because dealerships are trying to entice more people into buying so they can hit their yearly quotas.
According to one former car salesman, no salesman takes the last day of the month off. That’s even more true later in the year. If you can afford to wait, shop later in the year. In general, November and December have some of the best car deals. In contrast, April and May are the worst months to buy a car, generally. Right around August and September through to the end of the year, dealerships are trying to move older inventory to make way for the new inventory, so they’re more willing to give deals on cars that have been sitting on the lot for a while. Pay attention and wait for those deals, and you could save a lot of money.
You know what you kind of car you want to buy. Make a list about car features. What do you need? What do you want? Make sure the car you pick out has everything you need, but when it comes to the wants, don’t pay more than is necessary for them. It might be tempting to get a car with all the bells and whistles, from a remote starter to heated back seats and more, but do you really need that and do you really want to pay for that?
If you’re buying new, every feature you add results in kickbacks to the dealership. These kickbacks could be hundreds of dollars, if not thousands. If you’re buying used, every feature is going to cost more, even if they’re not features you’re interested in. Regardless of whether you’re buying new or used, dealerships will try to increase the total price through extended warranties or gap insurance. Most of these add-ons aren’t necessary and will only end up costing you potentially thousands of dollars all so the dealership can make more money. Say no to any add-ons that you don’t really need.
No matter how long you anticipate driving your car around, buy for the long-term, because ultimately, you’ll be paying the car off for the long-term. A low monthly payment may be tempting, but don’t focus on the monthly payment. Do some math before you go into the dealership. Financing means interest, and the total amount of interest you pay is based on the full amount that you borrow.
The lower your monthly payment, the longer you’ll be paying off the car and the more interest that will accrue on the amount. This means that you’ll be paying more for your car over the long term than you might if you were to get a shorter term with a slightly higher monthly payment but a lower interest rate. Keep this in mind before you sign anything. It’s you will be paying off the car. Not the dealership.
Arguably the most important aspect of buy a car is maintaining control of the situation. You might think this is obvious, because it’s your money. However, most car salesmen are trained to intimidate and confuse customers. They try various deflection tactics so the topic of conversation isn’t what you would like it to be on. This might be a bait-and-switch where you’re interested in a used car, but they try to talk you into buying a newer model. Oftentimes, car salesmen will focus the discussion around monthly payments or interest rates rather than the total cost of the car.
Before you go in, get pre-approved for a loan. This will cut through a lot of the hassle, because talking about interest rates and monthly payments is pointless (unless they can get you a better interest rate). If you already have a bank or credit union ready to approve your loan, the only thing that matters is the total cost of the car.
Purchasing a new car can be frustrating, confusing and even downright terrifying. However, it doesn't have to be if you know a few tricks to make the process simpler and less overwhelming. Now that you've got the tools you need, finding the car you want, at the price you want, is sure to be a lot less challenging.