If you’re buying a new or used vehicle, there’s a good chance that you’re buying the vehicle from a car dealership—home of the infamously sly car salesman.
Not all car salesmen are trying to rip you off, though. Like all other business people, they’re just trying to maximize their profits. What’s difficult about the car business is that most people don’t know very much about automobiles. They don’t know exactly how a car works, or what all the components do, or which features are worth looking at. Car salesmen do, and so they always have the upper hand in negotiations.
But that doesn’t mean you’re powerless. Here are some tips on how to negotiate with a car salesman so that you can get the best deal when you buy a vehicle.
Don’t Appear Too Eager
This is the “first date” rule. Buying a car can be exciting, but you want to look like you’ve never done this before. If you don’t approach everything the salesman says with a grain of salt, you might get suckered into something you don’t want. Use this rule to make sure that the salesman takes you seriously.
Do Research Ahead of Time
It’s important that you do research ahead of time. First, figure out what kind of car you’d like to buy. Then, figure out what price that vehicle typically goes for. Pay close attention to the price differences from one dealership to the next. Don’t be afraid to travel a few miles to get the best deal! Let’s say that you’re living in San Antonio and you find a new Mercedes that’s priced at $45,000. Check prices in nearby cities, even if they’re a couple hours away. Maybe you’ll find a new Mercedes for sale in North Houston that’s priced at $42,000. A couple thousand dollars can make a big difference!
When you do research on car prices, you’ll find out where the best deals are, and you can also use your knowledge to convince the car salesman to match the cheaper prices. If you’re set on a particular make and model, a car salesman might be tempted to lower the car’s price to match that of another dealer.
The salesman won’t want you to take your business elsewhere, so the odds are in your favor.
Reverse the “Time Pressure” Technique
A salesperson’s favorite technique is the “time pressure” strategy. They’ll say something similar to, “you should hurry up and buy the car because I’m meeting with someone else today who’s really interested.” It might be true, but most of the time it’s just a way to get you to purchase the vehicle immediately without giving it too much thought.
You can use this very strategy against the car salesman to try and get a better deal. You might say something like, “I really like this kind of car. I found a dealership down the road that sells it a little cheaper, so I’m going to go there next.” Who knows? Maybe it’ll sway the dealer to cut the price a little bit more.
Don’t Fixate on the Monthly Payment
Car salesman like to make a big deal about the monthly payment. A monthly payment is definitely important, and you don’t want a payment that’s so high that it’ll throw off your budget. But you need to remember that what’s important is not necessarily how much the payment is, but how many payments you’ll have before the car is fully paid off. If you’re having to make monthly payments, it means that you’re financing the car via a loan. Loans come with interest. If your payments are low, but you have a lot of them, you might be paying more overall money because of the interest than if you paid fewer, higher-interest payments. You’ll want to carefully crunch the numbers before you agree to anything.
It helps if you get a preapproved loan from a bank or credit union. Financing that’s offered by car dealerships is usually pretty easy to work with, but the interest rates are higher. When you get preapproved for a loan by a banking institution, you’re more likely to get the best possible loan rate.
Don’t Settle
Here’s your final and most important rule when you’re negotiating: don’t settle. A car is a major investment that’ll cost you tens of thousands of dollars. It’s an expense that you shouldn’t take lightly. A car is a very important part of your life and you’ll spend a large portion of time driving it, so don’t ever settle for a vehicle that you’re less than thrilled with.
With these tips and tricks in your backpocket, you’ll be able to outwit any salesman and drive off in the car of your dreams.