Buying a new car usually requires visiting a dealership. That puts you at a disadvantage: You’re on foreign soil, and they know you don’t know your way around.
Having grown up around a dealership, working as a salesman, and later for manufacturers, I have a good idea what the dialogue will be before I step foot on their turf. Fourteen million new vehicles are sold in the U.S. annually, or about 38,356 cars a day. Looking at the board on or near the sales floor, you can get a pretty good idea of how many units the dealership you’re visiting sold. If they’re a high-volume store, they may be more willing to deal. Understanding how dealerships work begins by knowing what not to say, and the art of the deal.
Here are some tips.
Let’s start with what not to say.
Sure, I’ll pay your price. There’s a myth that if they put the price on the windshield or online, that’s it. They call this tactic no haggling or price transparency, but that’s only if you’re foolish enough to pay their asking price. Instead, make an offer you’re willing to pay. The best way is to show you’re serious is to go to the dealership. Money talks, although my aim is for them to get less of it.
While CarsDirect or TrueCar may be convenient, this doesn’t mean they’re cheaper. You’re dealing with an online sales consultant who’s all about the buyer experience. This is not what you want, which is to get the vehicle for less than the going rate. This runs counter to what they’re taught. They have no other tangible items they can offer to offset a price differential. At a dealership, there’s a parts department where they can go to get a set of floor mats or trade out the wheels. Online, what you see is what you get.
I’ve done my homework, and there are six exact vehicles in a 100-mile radius. Why tell them upfront that you know their ability to hold their price is greatly diminished? The same with comparable vehicles from competitive makes. Leave this for later, when you’re getting down to the nitty-gritty. It is a little more difficult if you’re looking for a model that’s hard to find, such as a Toyota Tacoma 4WD with a manual transmission in anywhere but a rural area. Toyota doesn’t believe if you reside in a city that you want to shift for yourself.
What to say:
My bank has a lower rate than what you’re offering. If you’re going to finance the vehicle, you want to have options. Check to see if your bank or credit union is offering low rates on auto loans, so you have your own financing as a backup. This puts you in a better position to wrangle the terms. The dealer’s finance manager has a plethora of banks they use. What you want is for them to have to beat the rate you have, or you can do the deal through your own bank.
I’ll walk if I don’t get the deal I want. Forget how much you like the car, cross through their deal sheet, and write the number you want to pay. This is easy if you want something less desirable, with plenty of units on the lot, and you’re not stuck on a certain color or trim. That gives you the most flexibility, and it will drive the salesperson and their manager crazy. Include all the other fees, title, and taxes in your offer. It’s called the ‘out-the-door’ price, and if they agree, they can’t come back and tack on some superfluous charge. Watch the finance manager carefully, as they’re known for getting you to buy pin striping, detailing, an extended service contract, or paint protection if you’re not paying attention.
Car buying can be easy if you take the time needed to work out a deal you can live with.