With the right strategy, you can have the car you want for a price you can afford.
I remember car shopping for my first car on my own. Sure, I’ve owned cars before, but this time was different. I was fresh out of college, and I was going for my first major purchase as an adult. However, I had no idea what I wanted and my beat up Mitsubishi Lancer was literally falling apart. What’s worse, I was to be taking a road trip up to Atlanta in 2 days to spend Christmas with my then girlfriend (who I just so happened ended up marrying) and my Lancer would have never made the trip. So I needed to buy a car ASAP. I was in such a disadvantaged and uninformed position that I felt I had to accept any deal I was given, not knowing if it was a bargain or a rip-off.
Hopefully, if you follow these rules below, you will avoid my fate and save some serious cash on your dream car!
1. First and foremost, you must be prepared to walk away from the dealership and the car! This is stated at the top of the list because it is so critical to the car search process. Mentally prepare yourself that if you don’t feel comfortable pulling the trigger, then get the heck out of there before you do something you might regret! Remember, there will always be deals out there so be patient and deliberate in your search.
2. Knowledge is power. Always do your research, because the more you know about the car you want, the more control you will have at the negotiating table. However, there are enough aspects of a car to research to make you dizzy, so here are the main things to look for:
- According to my good friend and budget connoisseur Richard Mordecai (Instagram: @WealthMordecai) you should first look at the features you want in a car, and then determine if you can afford these features on your budget. This will determine the make and model of car you can afford.
- Second, research the two prices of a car: the MSRP and Invoice Price. The MSRP, or Manufacturer’s Suggested Retail Price, is the price the manufacturer wants the dealer to sell at. We as consumers should NEVER pay the MSRP on a car. EVER. The invoice price, on the other hand, is the actual cost of the car to the dealership. We should be trying to pay as close to the invoice price as possible, if not somehow lower. For easy research, you can go to AOL Autos to find out all of this information. Take the invoice price with you to the dealership as it shows you’re serious about the process and did your research.
- Finally, research the various dealerships in the area that sell your particular make and model so you have a wealth of competition to choose from.
3. Once you have all the information you need, it’s time to head to the dealership! Here’s where the rubber meets the road. Composure is key for you to get the car you want. The salesman will want to know as much about you as possible to use your emotions and motives against you. He will sell you on all the bells and whistles to get you emotionally invested, padding his commissions in the process. So appear level-headed and almost unimpressed about the car. Remember to focus the conversation on the car and invoice price, not you or the MSRP. Never reveal your true budget and don’t make the first offer. Always have them make you an offer as they will always try to high-ball you. If they don’t really know your true budget, they will likely resort to somewhere between the MSRP and the invoice price.
4. Silence is golden. This is probably the most unheralded tool in your negotiating arsenal. What makes silence so special is the discomfort associated with it: No one wants to sit in silence during a conversation. It makes people’s skin crawl and increases anxiety. Use this to your advantage at times where the salesman rejects or counters your counteroffer unfavorably. He may eventually bend to your will in lieu of facing that uncomfortable silence.
5. Move Around. If the salesman goes to “talk to supervisor/finance dept”, he may be icing you, or trying to build up anticipation and anxiety to force you into an unwise decision. To counter this, tell them you will not wait long, then walk around showroom/dealership and look at other cars. If the salesman takes an inordinate amount of time, tell the receptionist you are ready to leave to ratchet up pressure on his end.
6. Phone a Friend. Okay, I must admit this may seem a bit slimy, but all is fair in love and cars. Salesmen will pull out all the stops to get you to buy their cars, and no low is ever too low for them. So don’t feel bad if you need to pull out this trick in a last ditch effort to nail a good deal. It will however require having a friend on standby. If you encounter a situation where your salesman will not budge on price, text your friend to call you pretending it’s another dealer. Stay within earshot of the salesman, and talk as if the car is cheaper elsewhere (mention a specific price). At this point we must remember rule # 1 above: you must be willing to walk away from the deal. So proceed to leave the dealership, and if the salesman lets you go, then move on to another dealer; otherwise, enjoy your new car!
In summary, a solid strategy and being an informed consumer will give you an edge in the car-buying experience. For more car buying tips, check out the AOL Autos and CNN Money articles hereand here.
Here’s to a successful car buying experience!
