For most of us, choosing our next vehicle is an exciting time. The new car smell is something many can’t resist. Hearing about all the latest bells and whistles since the last time you made a car purchase can add to your excitement. Once you have gotten to the point where you know it’s time for a new vehicle, you should put some careful thought and consideration into it before you make that purchase.
Negotiating with car salesmen can be intimidating. After all, they are experts at getting you to spend more money and talking down your negotiations. Some of us simply don’t like the act of negotiating. It may make you uncomfortable. If you’re worried about being taken advantage of when it comes to purchasing your next vehicle, it’s time to eliminate that fear. The process of purchasing a vehicle has changed quite a bit over the years and you have options. So, what can you expect?
How Can I Get the Best Deal When Purchasing a New Car?
Now that you have decided it’s time to buy, there are a few things you need to consider. The first is whether you are going to purchase your vehicle or whether you want to lease it. Leasing can be extremely beneficial to some people. But, you need to have the right characteristics to lease. Drivers who put a lot of miles on their vehicles are not the best candidates for leasing because most lease terms are based on a set number of miles. Any overage you have can lead to an extremely high bill.
If you have decided the right choice is for you to buy, you have options. Consider some of these:
- Car Buying Programs- Businesses like American Express, Costco, and AAA have established car buying programs for their members. These programs are a great option for buyers because the programs negotiate pricing with local dealerships in exchange for program referrals. If you are a member of one of these organizations, see what options they offer. Also, take into consideration the fact that you will still have to deal with a sales pitch. The dealer may try to sell you add-ons like extended warranties. If you can avoid these, the price of the vehicle itself will be fixed.
- Negotiating Services- If you truly can’t stand the car negotiation process, you can pay someone to do it for you. CarBargains and AuthorityAuto are to services that do this. They determine what make, model, and options you are looking for then negotiate with multiple dealers to get the best price. And since the service providers don’t receive compensation, there is no conflict of interest.
- No Haggle Dealerships- Your final option is to find a no haggle dealership like CarMax or Carvana. This can make the purchasing process a lot less stressful. But, this doesn’t necessarily mean you are getting a good deal if the dealership says no hassle. Do your research if you decide to go this route.
Do Your Research
If you do decide to negotiate on your own, make sure you do your research. The first thing to do is to determine what your budget is for purchasing. Once you set a budget and determine what vehicle you are going to purchase, use Edmonds, True Car, or Kelley Blue Book to determine the MSRP and invoice price to dealer. Your purchasing price should be somewhere between these two numbers.
Do the same research for the vehicle you are turning in, especially if you are planning to add a trade-in value to your purchase. The above-mentioned resources can help you determine the prices paid in your area and give you a good assessment of what you can expect for a trade-in value.
If your plan is to finance the car, you’ll need to do research here as well. Research loan rates. Your dealer may offer great financing options but having other options can give you a great amount of leverage when it comes to negotiating. Start the process online. This can eliminate much of the negotiation process and shorten the length of your time in the dealership.
Once you’ve received all your paperwork, read through it thoroughly to make sure it correctly reflects the agreement you made, and no unexpected fees have been added. Once you’ve signed all the paperwork, congratulations! You’ve purchased a new vehicle and checked off all the markers on the list of getting the best financial option for your new car purchase.