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Before you do, here are some basic tips to consider:
- Take someone with you. If you are getting flustered or confused, the other person can be there as morale support and can be a sounding board. The salesman now has two people to convince, so this should help you. Remember that the salesman may try to separate the two of you. Try not to let them do this. Remind your friend they are not there to look at new cars. You are the one buying the car. They are the one providing support.
- Dress comfortable, but smart when you go to the dealership. The more comfortable you are, then the more confident you will feel when you reach a standoff with the salesman. You do not need to wear a suit, but also make sure you are not too comfortable. You want to portray a confident, informed appearance outwardly as well as feeling it inwardly.
- Never go to the dealership on an empty stomach or when you are feeling tired or ill. The last thing you want is to be distracted when you are discussing the purchase of your new car or truck.
- Also, consider placing a time limit on how long you are willing to spend in the dealership. If you cannot convince the salesman to accept your offer within 30 to 45 minutes, then you are not likely to convince them at all. Likewise, they may try to stall you to convince you that their offer is absolutely the best one that they can give you. Let the salesman know that you are sticking to a time limit and that every time they go away to discuss it with the sales manager that they are getting closer to the time limit.
- The salesman may tell you that the offer will not be available tomorrow. Unless they actually sell the exact car you are considering, then the deal will be available tomorrow. Be prepared, though, to call their bluff and walk out of the dealership. Also, walk out if you are not completely comfortable with the deal. There is no reason why you cannot take more time to think about the deal.
- Finally, do not worry if it goes completely wrong. There is always another dealer who you can discuss the purchase with.
When you are ready to go, select the particular dealer that is offering the most incentives. Dealer incentives will differ dealer to dealer so it is important to shop around. Some incentives are available because manufacturer offer them direct to the dealer. These incentives are not advertised to the general public, and different dealers will pass different levels of these incentives on to their customers. In addition, a particular dealer may have a need to reduce its stock levels and may be offering an incentive that is unique to their dealership or is of particular interest to the local community.
Now that you have picked the dealer, what should you be aiming to pay for your new car or truck? A good rule of thumb is 5% above dealer costs. Keep in mind that the sticker price is not the dealer price. It is the manufacturer’s suggested retail price. Only in times of very high demand or at dealers that do not haggle, should you accept to pay the sticker price for a new car or truck.
Now, the tricky part, you have complete access by law to the sticker price. Do not even consider purchasing a new car or truck that does not have its sticker price displayed in the window. You do not, however, have access to the dealer costs, but you may be able to get surrogate dealer cost information from the Internet. Many of these sites charge a fee, though, for this information.
One of the best tactics when haggling with a dealer is to see what the dealer will offer you first. In most cases, this will not be the salesman’s best offer. To understand what type of offer the dealer is offering you, compare their offer to sticker price, minus all customer incentives, plus 5%. Do not even consider their offer if it is above this level.
Make sure you subtract all of the customer incentives before you add the 5%. Often dealers will try to make it look like you are getting more off by making it look like they are offering these incentives to you directly. In most cases they are not, the dealers are just passing them from the manufacturer to you. The dealer’s profit should, therefore, not be calculated based on these.
If the dealer’s offer is below your calculated price, and you are still not sure if it is low enough, try another dealer and see what they will offer you. Once you have shopped around, you should be able to judge which dealer is offering you the best deal and how much more you can negotiate down their price. You want to take your new car or truck home as soon as possible, but it is worth a trip to a few dealerships to check you are getting the best deal on your new car.