Haggle Your Way to Savings on Your Next Car Purchase
When you buy a pair of shoes everyone pays the same price for the same model at the same store. This is not true when you buy a car. The car dealers will make as much profit as you let them. I have bought 4 new cars and 3 used cars since 1987 mostly Toyotas and no they weren't all for me. Each one took several hours of haggling before I got the price I wanted, but that is quite a bit of savings with the cost of all those cars. Well worth the severe headaches I received.
The first lesson is never pay the price on the window sticker. The dealer deserves to make a profit but let him get rich off someone else. Many dealers don't even want to tell you the price of the car. They start off with, what do you want your payment to be? I tell them that after we figure out what the car costs I will adjust my down payment to get my monthly payment where I want it. Always know the price of the car! You should be able to get a new car for thousands off the sticker price.
Start off with a visit to Edmunds.com where you can find out the True Market Value® of the car you want. This will show you what others are actually paying in your area for the same car with the same options. Plan to spend some time on this site before you go to the dealer and know exactly how much you want to pay for your new or used car.
Let the dealer think you are going to finance the car with them but before you go to the dealer apply for a loan online and see what interest rate they offer you. One thing the dealers love to do after you get them down to the price you want is to jack up the finance rate. They try to make some extra money here. If you have a pre-approved loan you can tell them they have to meet or beat the rate.
You can also learn about things like Dealer Holdback. This is money the factory gives back to the car dealer after they sell the car. It can add 2 or 3% to the cost of the car. So when a dealer says they are selling the car at $1.00 over invoice they still make hundreds of dollars on the sale.
Read Confessions of a Car Salesman
Do you want an extended warranty on your new or used car. I usually buy one because I want to be sure I am not going to be spending money on car repairs at the same time I am making car payments. Don't accept the first price they offer you on the warranty. It has been my experience that they will go lower. You can also buy extended warranties from other companies online. The last car I bought after I got them to drop the price on the warranty and when I still wasn't happy they told me if I never had to use the warranty I would get the money back. That hooked me, however when my warranty papers came in the mail there was no mention of this. I went back to the dealer and asked why I had nothing to show that I should get my money back. They said the paper was upstairs for safe keeping. I insisted they give me a copy and they did. I made it though the six years with no claims and went back to the dealer to request my refund. I expected to get some kind of hassle but much to my surprise I received my refund. If they you want to purchase a warranty try to get them to give you the money back offer.
Should you buy a use or new car? Your new car depreciates the moment you drive it off the lot. Many people will say it is better to buy a car that is a year old because the first years depreciation is the highest. That may be true if you are buying a car from an individual, but once the used car goes back on the car dealers lot the price seems to inflate again.
I usually buy those one only deals they advertise in the newspaper for rock bottom prices. That is what I am driving now, though they told me it was sold after I looked at it. They asked if I was interested in a used car and I found that the prices on the used cars were more than the new one they had in the paper. (They had more stuff on them, but stuff doesn't make a car run better) As I was leaving they came running out to tell me the deal had fallen through on the new one and that I could buy it after all. Hahahaha. The car that they had in the paper had no window sticker on it, they didn't want anyone to see it. Then we spent several hours arguing as they tried to jack up the price. The salesman hollared at someone to get the car off the lot because other people wanted to buy it. He was trying to scare me into making a deal, but I reminded him what I was told when I first walked on the lot two hours ago. "It's an ugly color and nobody wants it." He told them to rip the CD player out cause I didn't want to pay extra for it. (there was no CD player in it) I was so close to walking out on this guy, just because he was such a jerk. The only thing that kept me there was knowing I would have to go through it all again if I went to another car lot. Seems to me if this guy had just written up the car at the advertised price in the first place he could have saved a lot of time. He might have been able to sell a car to someone else during all that wasted time and made another commission.
Read Edmunds.com then take your papers, a calculator and a bottle of asprin when you go to buy your new car.
After you check out Edmunds and before you go to a dealer check the prices at CarsDirect and check out their low price guarantee.
If you aren't sure what car you want, you might consider renting a similar model for the weekend. This will give you a real chance to be sure you are comfortable in the car before you spend a large amount of money.
