New Car Buying Tips: How Much Should a New Car Cost?
on Jan 30 in New Cars tagged negotiation tips, New Cars by jasonl
How much should a new car cost? While there’s no single answer to this question, dealers should be able to sell you a new car for 1-2% over the invoice price and still make a fair and acceptable profit.
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There are quite a few websites you can visit to find out what the invoice price of a car should be. Our personal favorite here at AccurateAutoAdvice.com is Edmunds.com, but you can also find out invoice price on Cars.com, KBB.com, Yahoo! Autos, and believe it or not, a lot of the manufacturers are starting to put this information on their websites too.
Once you have the invoice price in your hand, request a few quotes from different places before you approach a dealer. You never know, you might hit upon a special offer when you do that and end up with a price that’s even less than invoice. Try Edmunds, and at least three other places, to make sure you don’t miss anything.
What happens when a dealer doesn’t want to sell you a car for 1-2% over invoice? Sometimes when a new vehicle is in high demand, it’s almost impossible to get a discount. If you’re not willing to pay full price, then your best strategy is to wait for demand to die down.
There are times when a dealership refuses to budge on price because of “principle.” They don’t want to discount their car because it’s a luxury vehicle, because they say it’s scarce, or because they know they’re the only dealer in the area with that particular car.
When a dealer refuses to budge on price, there are a few things you can try:
- Get back online, but widen your search to different states and metropolitan areas. For instance, you might be able to go to a different city or state and save a couple thousand dollars. If you’re saving that much money, it would make sense to fly or drive there to pick up your car. The really cool part is that a lot of big dealers in large cities are willing to deliver the car to you, even if you’re out of state.
- Buy on the last day of the month. Dealers always have quotas that they have to meet, or contests that they’re taking part in, or they have incentives to sell a certain amount of cars, etc. These all stop at the end of the month, and if selling you a car will help the dealer meet their sales goal, they might stretch quite a bit to get your business.
- Try calling the dealership in the middle of a storm. Dealers are expected to sell a certain amount of cars every day, regardless of the weather. If you make them an offer in the middle of a storm, you might be pleasantly surprised. The only catch is, you have to be willing to go to the dealership during the storm to pick up your new car!
As always, take your time when buying a new car. Do your new car research, get multiple new car financing quotes, and feel free to contact us with your questions.
Negotiation Tips: Used Rental Cars aka “Program Cars”
on Jan 30 in Used Cars tagged negotiation tips, used rental car by jasonl
One thing we like about used rental cars is that it’s pretty easy to get a deal on one. A used rental car is a commodity, and unless you’re looking for a specific color or feature, you can find them just about anywhere. (Read our article titled “Should You Buy a Used Rental Car?” if you’re not sure about buying a used program car.)
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Before we give you our negotiation tips, we want to let you know how the used rental car system works. Once you understand the system, the negotiation tips will make a lot more sense.
Generally speaking, rental car companies go to big car manufacturers and lease thousands of cars from them each year. This lease only lasts six to twelve months, during which time the car is rented out at airports, vacation destinations, etc. The rental company then takes these cars back to the manufacturer, where they’re labeled “program vehicles” and sold at special dealer only auctions.
So, when you hear the words “program vehicle” or “program car,” that’s code for “used rental car.”
Our negotiation tips:
1) Tell the dealership that you know their “program car” is really a rental car. Telling the salesperson that you’re in on the secret lets you take control of the conversation.
2) Explain that you’re okay with buying a used rental car, but only if the price is really good. You’ve already exposed their secret, and now you’re taking advantage of the perceived lower value of a used rental to get a better price.
3) Let the salesperson know that if you don’t get the deal you want, you’ll go somewhere else. This threat is often times meaningless, but not when it comes to buying a used rental. The dealership knows that used rentals are commodities. By saying this, you’re telling them that if they’re going to sell you the car they need to do it on price.
4) Offer to wait for a different vehicle at a better price. Used rental cars are sold at auctions held once or twice a month. Tell the dealer that you’re willing to wait for them to buy a car at the next auction for a better price. Once the dealership manager knows that you’re not in a hurry, they’ll probably try harder to sell you the car they have than risk you leaving and buying somewhere else. Remember – one of the keys to getting a good deal is to be patient.
5) Make sure you walk away. Once the dealership has made their best offer, let them know that you’ll consider it, and then leave. By leaving, you make sure you’re getting the best price. Sometimes, you might be gone just five minutes before you get a phone call with a better price. In fact you might not even make it out the door before the manager runs out to tell you to he/she can take a couple of hundred dollars off. Physically leaving is the best way to make sure you’ve been given the dealer’s best price.
Once the sale is over, it’s a good time to familiarize yourself with used car financing basics, as well as review some of our car financing tips.
Car Buying Negotiation Tips: Patience and Walking Away
on Nov 19 in Buying tagged car buying tips, car dealer tips, negotiation tips by jasonl
When it comes to buying a car, be patient, and don’t be afraid to walk away.
First of all, patience is a blessing when it comes to buying a car. Any buyer that doesn’t have to buy right away has the advantage. Sellers have to sell within a certain amount of time. A private seller might only have the weekend to sell a car, while dealerships usually have no more than sixty days to sell a used car. As for new cars, the dealership has only three or four months before they decide that it’s an old piece of inventory and they have to sell it. So if you have patience, and you don’t have to buy the next deal that comes your way, you might be able to go back to a dealership in a month or two and make an offer that’s a little low and get the car just because it’s a little old.
One of my best car buying tips is that you should always be willing and able to walk away from an offer. This can be your best negotiation strategy. By walking away, you make sure that you’re getting the seller’s best offer. Here’s why:
- Most sellers (private or dealership) realize that if you leave, you’re probably not going to come back. They have one shot to sell you a car.
- Sellers know that they need to make you their best offer before you go – they feel that if they tell you their best price and you still leave, then it just wasn’t meant to be.
- Here’s the best part of the “walk away” strategy: if you tell a salesperson or a private seller, “Thanks, but this just isn’t the deal that I’m looking for,” and you leave, they might call you in two hours to say they’ve got a better price.
- If you don’t hear from the seller, and you really want the car, you can always call them back and tell them you’ve changed your mind, that you realized it’s a nice car and a pretty good deal, that you’re willing to take it now, etc.. You can do this and know that you’ve negotiated for the best price while also saving face.
As always, take your time when buying a new or used car. Do your car research, get multiple used car financing quotes, and feel free to contact us with your questions.
