Aside from purchasing a home, car buying is the largest investment most people make. You’re paying thousands of dollars and are usually locked into financing over several years, so it’s no wonder it’s such a stressful transaction.
Much of that stress comes when it’s time to discuss the dollars and cents. Negotiation can be nerve-wracking, especially if you don’t know how to buy a car or are inexperienced at haggling. After all, bartering with a professional salesperson might make you feel like you’re a little out of your depth.
Here are a few car buying tips when you’re negotiating your car purchase.
1. Know the Vehicle You Want
Before you set foot in the dealership, narrow down your vehicle selection. Have three vehicles at most that you’re seriously looking to buy. Car salespeople will take full advantage of customers who aren’t sure what they want or haven’t done their research. These are the customers who end up having buyer’s remorse soon after.
Spend time researching reputable online sites, comparing models you think you might want. Drive through car dealership lots after hours to look at these vehicles without any pressure from salespeople. Only once you think you’d seriously consider the car should you walk into the dealership.
2. Only Pay for the Features You Want
On the car lot, there’s a good chance you won’t always find vehicles equipped exactly how you want. That means a salesperson will probably show you cars that have more features than you need. While the extras may be nice to have, you should base your negotiation on the features you originally want. The salesperson knows they are “upselling” you on features, which is a soft spot in their armor. Act like the extras aren’t important, offering only to buy car features you want.
3. Know Actual Selling Prices
You can use an online tool such as Kelley Blue Book to determine the Fair Market Pricing for virtually any vehicle, used or new. When you know the Fair Market Price, you know what range you should expect to pay for the vehicle you want.
Start your negotiations at the low end of the Fair Market Price, and be comfortable settling for a selling price anywhere in the fair range. If the salesperson won’t agree to a price in the fair market range, be prepared to walk away.
4. Get Competitive Quotes
Leverage your position for buying a car by obtaining quotes from more than one dealership. If there is one dealership that clearly has a better price than the others, start your car buying process there. You may just want to deal with a local dealership, so you can use the competitor’s quotes to negotiate a better price. Just make sure the vehicles you are comparing are apples to apples — the same car make and model with the same features.
5. Negotiate on Selling Price, Not Payment
When you are discussing price with the salesperson, they will probably try to negotiate a payment price with you, not a selling price. It’s a favorite tactic used by salespeople to increasing the selling price. By talking about small amounts instead of the overall price, small increases can seem harmless yet make a big difference in the total amount you’ll pay. Keep the topic on total selling price so you maintain control of negotiations.
If the sales process gets uncomfortable, simply walk away. You should never feel like you’re being pressured. After all, it’s your money and you’re in control.