You guys are going to love this blog. I've always said the internet needs a really good article on how to get a great deal when purchasing a car. Don't get me wrong. There have been some decent ones but I have, you can say, insider information. You see my husband used to sell cars. Oh the things he tells me. So get ready! Here are the top 16 strategies to getting the best car deal ever!
Rule number 1: Be Nice
Might sound like common sense or basic etiquette to some. But you'll be surprised to know that a lot of people think that giving a bad attitude or mistreating the employee is how you get the best deal. Frankly that makes me sick. My husband says that even if somebody with a really bad attitude did get a good deal it was only to get rid of them. Which might seem good in the short-term. However one day that purchaser may have some issues come up with their vehicle, or need some guidance on their vehicle.
My husband says if you're nice to the sales rep he'll take good care of you and help you find ways to save money on any of your car needs. He also confesses that sometimes a customer is so nice that he'll go above making sure they get a great deal. Many people going to car dealerships perhaps had a bad experience or maybe they heard something bad about car sales reps. Majority of car sales reps are actually good people just trying to make a living. So be nice!
Rule number 2: Buy your new car once the next model year comes out
This typically happens at the end of the year. Currently there are 2018 models coming out and the 2017 models which are the exact same car are just sitting there. The dealerships do not want those cars on their lot. They have to move them otherwise they won't be allocated any 2018 models. All new dealerships want to be current. So focus on those cars if you don't mind it being the model of the year before. You are absolutely guaranteed a phenomenal deal. In many cases dealerships go way below what they own the vehicle for just to get it off the lot.
Rule number 3: Ask to work with the top sales rep
Make an appointment before you go in. Don't just show up. Sometimes all of the sales reps are busy and then you're walking around just twiddling your thumbs. Call the dealership and ask to speak with a sales manager. Tell them that you would like to work with their top sales rep. Why the top sales rep? The reason why they are the top sales rep is because they give everything away. The top sales representative is the one who sells the most cars. Their only focus is units. And the only way to be the top sales rep is to sell the most cars by taking less of a commission. On the contrary the sales staff that tries to keep the commission generally sells less cars.
Rule number 4: Make your purchase at the end of the month
All car sales reps have a monthly quota to meet otherwise they won't meet their sales goals which means less money or even their job. At my husband's old dealership he said 3 months of not meeting your sales quota and you're fired. It's recommended if possible, to go into the dealership the day before the end of the month this way you can find your sales rep and see the vehicle for yourself. Then you're going to do the impossible. I say it's impossible because it's just really hard to do. You need to leave the dealership.
The sales rep and maybe even the sales manager will beg you to stay and will give you a great deal. Find the car you like and negotiate a little bit with them just to see how good of a deal they're going to give you. But leave the dealership. They may call you after you leave. But you're not going to go back until the next day. I know it's a process but just trust me. Or you can just go in at the last day of the month if you want but your sure fire better deal will be going in the day before and then returning the next day. Watch the discount grow!
Rule number 5: Do your homework
Make sure you know what your needs are before jumping straight to the numbers. Sometimes you can spend a lot of time trying to find the best deal realizing it's for the wrong car. You can go online and build your own vehicle and see exactly what you want. Once you know exactly what you want, then you're ready for the test drive. Driving the car beforehand can sometimes cause you to fall in love with it, blinding you from logic. Doing so will help you and make the rest of the process easier and without regret.
Rule number 6: Always test drive the car
Don't be tempted to go straight for the numbers. You can spend all day on the numbers and at the end of it all drive home in your new car and realize you hate it. My husband says it happens a lot. And unlike buying a pair of shoes you can't return your car so easily. But the main reason why you want to test drive the car is because you want the sales rep to see that you're serious about buying it.
When the sales rep knows that you're serious about buying it, he's going to show you the real numbers. If the sales rep doesn't think you're serious they won't commit enough time and energy in selling you the vehicle. You need to let the sales rep know that you're a serious buyer. Especially if you're buying a luxury car. More times than none people go into luxury car dealerships just to drive the nice cars and completely waste the sales reps time. My husband used to sell BMWs. He says it happens often.
Rule number 7: Ask for incentives
Incentives are extra discounts the dealer will offer customers to entice customers to buy. Costco and Truecar also offer discounts as well. But not all dealerships offer it. Make sure you ask them if they are a participating dealer. There are also corporate discounts you may qualify for. If you work for a major corporation or retailer make sure to ask if they have a discount for you. Most dealerships also offer military discounts. Something to keep in mind is that if you don't ask for these incentives the sales rep can keep the discounts for themselves, increasing their profit margin.
Rule Number 8: Know exactly what your profit margin is
The dealership won't typically show you the invoice price. The invoice price is what they own the car for. MSRP is what they hope to sell it for. Everything in between is the profit margin. A good rule of thumb is remembering that the profit margin in a car is typically 5% to 7%. Not including the extra incentives that you get on top of it.
Rule Number 9: The second stickers are just inflated prices
By second sticker I mean when you look at the sticker window and then you see an added price on top of it. It might say Northwest Package or Market Price Increase. Ignore it. Tell them you're not falling for it. Start at MSRP and work your way down.
Rule number 10: Make car dealerships battle it out
The best way to get the best deal is to have different dealerships compete for your business. Thanks to technology this process is very easy. Most dealer websites will have an online operator that you can speak to. Go ahead and chat with them. Or look on their website and email them. Most of the time you'll be speaking with somebody called an internet sales manager. They deal with most of the online inquiries. Ask them what their best price on a vehicle is. Take their best offer and go to another website of another dealership and ask them to beat this price. Then take that number and bring it to another dealership, and so on.
Your best price is having three different businesses compete against each other. But if you want, you can really get carried away and get even more dealers to compete until you see the price stall. This is really good if you want the process to be nice and easy when you walk in the dealership you choose to do business with. The numbers are done and now you just need to sign and drive away.
Rule number 11: The negotiation table
Let's say you didn't have a chance to do step 10. Of course I would always recommend doing step 10. It just seems to make things a lot easier. So you want to negotiate yourself. Remember rule number 6. So after you asked about the incentives remember there is still a 5% to 7% profit margin of wiggle room. I would think that a 4% discount would be more than fair. But if that doesn't make you happy then just remember 5 times. You keep saying no until your sales rep goes back and forth and asks his manager for a discount 5 times. The sales rep has to go back to the sales manager and let the sales manager know what you're willing to buy the car for. Since you know the profit margin is 5% to 7% ask for a 7% discount and go from there.
Rule number 12: Used Cars
If you're shopping for a used car then most likely there are no incentives or factory discounts available. Those incentives are mainly used for new car buyers. The 5% to 7% profit margin also does not apply because you don't know what the dealership paid for the used car. From my husband's experience there is sometimes a 10% to 20% profit margin on used cars. But you never really know. However you can still use Rule 10 and have the used car dealerships battle it out. My husband likes to use Cars.com or AutoTrader.com. He can type in any car and see how many of similar used cars are in the area. Then he simply emails them and has them compete against each other.
Rule number 13: Before the deal is complete ask for extra goodies
The dealers get rubber mats, car remote starters, key chains, etc. at a discount. So that is the time that you want to ask them if they can throw in a little extra stuff for you. They'll do it, trust me. It doesn't cost them much. Just remember to ask them before you finish the paperwork. Mainly because the dealership is more likely to give you extra goodies if they can throw it in the deal and just pull it from the profit margin of the car. Afterwards it isn't likely that they'll give you anything extra.
Rule number 14: The finance office
Congratulations! You found an awesome car and you got an awesome price and so far things are going pretty smooth. You may have heard that you should just ignore the finance manager and not buy anything that they're offering you because they're just trying to make more money off of you. Well they are trying to make more money however some of the stuff they're giving you might be good for you. I'm really big on warranty, gap insurance and I also like tinted windows. Remember you can negotiate for those things too.
Rule number 15: Stay on good terms with your sales rep
You're sales rep will continue to take good care of you as long as you remember to ask for him or her if you or a friend is in search for a car. And the sales process will go that much smoother. It's nice to have someone on the inside, trust me. As you get closer to them they'll trust you more and find maybe even more ways to save you money. You'll be surprised. They may become a good friend.
Rule number 16: Surveys
Most dealerships, if not all of them, will send you a survey to fill out after your purchase. These surveys are like gold to the entire dealership. It doesn't just affect the sales rep, it will affect the manager, the owner, and even the car porter. I would recommend bringing this up during the negotiation but it's up to you. During the negotiation you can tell the sales rep, "If you do this for me, I promise to give you a perfect survey." His eyes will open wider than ever.
A bad survey can mean missing out on a bonus or not being able to reach the next pay tier. Even the owner of the dealership will miss out on his bonus if there are enough bad surveys out there. So remember to always mention the survey. It'll help guarantee you a good deal. You can also mention the different social networking sites like Google, Facebook, Yelp. Tell them you promise to give them five stars or a good review. They'll appreciate it.
So there you have it. Your top 16 strategies to getting the best car deal ever. Now after all of this there is one more thing I need to share with you. One thing I would like for you to keep in mind is that from my husband's experience, your best deal will always be when you get exactly what you want rather than saving money.
Some people pay above retail to get exactly what they want and consider that a great deal and they're forever happy. You could say that a great deal is when you're happy. Say you had a choice of saving a ton of money on something you kinda like or paying a premium for something you really want. Most buyers would choose paying a premium for getting what they really like and want.
My husband has seen some people so focused on price they lose focus and purchase something they didn't really like and then they're unhappy the very next day. Happiness from a discount goes away quickly. But happiness from getting exactly what you want can last a lifetime. It's something to think about.
Hope you really enjoyed this blog. If so, please leave a comment. I'd love to know your car buying experiences, as well as any good tips you might have as well.
Hello and Welcome! Proluxx is a Finance, Budgeting, and Self Development blog. Our mission is to educate, motivate, and inspire as many individuals to gain financial peace and financial freedom through budgeting, investing, and side businesses. Hope you enjoy our content and leave a comment even if it is just to say hello!