Nine steps on how to get the best price on a new car.
Let’s not beat around the bush here, dealing with a car salesman is an unpleasant experience for almost anyone. You feel this guy genuinely likes you and is helping you out. You believe all the things he says. You drink average coffee out of a polystyrene cup whilst he adjusts his ill-fitting Kmart suit and at the end of it all, you own a car. The next day you wake up, both physically and emotionally drained, you realise you were smooth talked. You have the car and you’re happy with it but you feel like you have been in bed with someone you don’t really want in your bed.
Here is a quick step by step guide, how to quickly get through this process, get the best deal for yourself and wake up happy with the person in bed beside you (figuratively speaking).
- Don’t buy on the day you look. If you don’t know what car you are after you will spend hours walking through car yards, looking at bad tie choices and drinking less than average coffee. You will need to urinate at least twice as often as normal and your poor choice of footwear will give you blisters. If you have to buy a car that day, you will become very frustrated, get sick of it all and simply commit to something you don’t really want, won’t get the best deal and you will regret it. The day you window shop, do not buy.
- Get prices from other dealers. Start the furthest from home. Chances are dealers will outbid each other for your sale. If your first price is the dealer closest to you the second closest will probably beat that price, and the third beat it again, so on and so forth. Obviously, there is a point that this stops but when you do finally make a deal, you want this dealership to be the closest to you. If you have to return for pick up, warranty claims etc you don’t want to have to drive for three-quarters of an hour to get there.
- Set your price limit. Set yourself your maximum spend before you start and stick to it.
- Don’t buy any add-ons. Add-ons is where the car yards make a fortune, your on an emotional high after committing to a new car, now they hang many more shiny things in front of you, and like an inquisitive kitten you just want to swipe at them. Don’t. Here are the facts, floor mats should come with the car don’t pay more for them. Window tints can be done at any window tint shop for half what the dealers charge, likewise with mag wheels, tow bars, and roof racks. paint protection is a complete waste of money, as is rustproofing (you car already has rustproofing). Just buy the car. Any of the bells and whistles can be done by a third party after the purchase for a fraction of the price.
- Keep emotion out of it. The experienced salesman knows how to quickly sell to someone who is buying with emotion. Fun fact, it’s not always the ladies. A salesman will work out quickly who is wearing the pants, who holds the wallet and who needs to be satisfied in the deal. As soon as you show weakness that is emotion, be it stress, excitement, ego or anything really, he will pounce. It’s easy to sell an M3 BMW to an ego-driven alpha male. If you think you can’t keep the emotion out, take someone who is skilled at remaining neutral or someone with no personality, your high school P.E teacher would probably be the best person for this.
- Be willing to walk out. The salesman wants you to believe you can only get this car, this color, this feature or this deal with him. You can almost always find the same deal, color, price, and feature elsewhere. If a salesman genuinely believes you can walk away, he will do more for you in order to secure the sale.
- Don’t buy brand new. You can save up to 50% off some vehicles buy purchasing demos, run outs or traded in vehicles. We have covered this in this article. Should I buy a new car?
- Shop at the end of the month. The car salesman is on a very ordinary base salary, their income is performance based incentives paid in the form of bonuses which are determined by the number of sales made or gross profit made. In order to make this bonus, a certain quota needs to be met. This is normally a sliding scale with a number of sales or profit bunched into categories. These bonuses are calculated monthly. At the end of the month, a salesman will do anything to land a sale or two that will get him over the current threshold. Earlier in the month, he is not as motivated by this bonus system.
- Don’t get your servicing with the dealer. Capped price destroys your car and empties your wallet. We have articles about this and it is too long to cover in this but in a nutshell, capped price sounds financially appealing but it does not cover tyres break or mechanical failures, it only covers service items. When you need these things you will have to pay inflated prices for them. Warranty is not void by using independent repairers and you will be better off taking your new car to your independent repairer.
Once you own your new vehicle be mindful of taking your vehicle back to the dealer for servicing. We have covered the methods dealers use to maximise profit using your money in this article here. How dealers maximise profit