Depending what your credit situation is, the type of dealership that you are buying from will determine how you should go about the negotiation but here are the basics for every scenario
Okay, so by now you have determined a fair price and have all of the quotes that you got online. You know what your trade-in is worth and have the used car values with you. You have your financing lined up or at least know what type of financing you are going to need and have the bank paperwork and your credit report. If you are buying a new car you have the invoice that you got from Fighting Chance or Edmunds etc. If you are buying a used vehicle you have the book value.
Here are the steps needed:
Make sure that you take as many people with you as possible. It will help in case a promise is made verbally and you had to go to court. It's easier to prove something if 2 or 3 people heard it than 1 person alone.
Once you've test drove the vehicle and you are sitting down. Try to make the negotiation as fast as possible. Time yourself if you have to. One of the dealership's #1 negotiating trick is to try to wear you out. They will go back and forth all day long if they have to. Don't let this happen. If you don't come to an agreement in the first 20 minutes start looking for the door.
You have to get the out-the-door price – excluding rebates, incentives (new car) and trade-in value. The price should include all fees including Tax, Title and License. Do not let the dealer know that you have a trade-in. (most dealers know this trick any ways)
Tell the salesperson or manager that you are dealing with that you are paying cash and are not trading in your vehicle. Using the quotes that you have received online. let him or her know that another dealer offered you $xxxx.xx and ask them if they can beat it. Make sure that they know that you are aware of the rebates associated with this vehicle if you are buying new.
When they counter offer, repeat step 2 again and again. Eventually they will stop going lower.
Once the dealership stops lowering their price and you feel that you are getting a good deal, let them know that you have changed your mind and now want to trade-in your vehicle.
If you do not get Kelly Blue Book trade-in value, threaten to walk. (by now they will be at a point where they will not want to loose a sale, even if it is a minimal profit.)
Now it’s time to negotiate your financing. If you have already lined up your own financing, it might still be a good idea to see what the dealership has to offer you. If they don’t beat your interest rate then let them know which way you are going and tell them to get the paper work ready. If you do not have your financing lined up, than let the dealership see what type of rate and financing they can get you.
Here is where you have to realize that if you have decent, good or excellent credit, the dealership will offer you a higher interest rate than what they can get you because they make money on each point they upsell you. Always negotiate to get a point or two lower than what they offer you. Tell them to get the paperwork ready. |
