Top 10 New Car Buying Tips
For many years, there has been a myth that your new car will depreciate as soon as you drive it off of the dealer lot. As with any product, if you pay more than the market value, this is true. However, we’ve compiled these tips for buying a new car to show that you can, in fact, purchase a vehicle under the fair market value (with a little effort).
#1 New Car Buying Tip:
Know when to buy a new car
Most people buy when there is a big incentive (cash rebate or Low APR) offered. This is a good start, but there are a few other things to consider when it comes to timing. Ask yourself this: When do you think business is slowest for dealers? During the holiday season, the dead of winter, Super Bowl Sunday, the middle of the week? How many people do you know that shop for a car on a Tuesday morning? Not too many people.
Timing will play a big part in the Car Quotes that you receive for your new car. If you wait until dealers are more desperate to sell, you will increase your chances of receiving a lower price. Dealers are paid based on sales volume and the end of the month is when they are most desperate to meet their sales goals (Read more at Car Dealer Secrets ). The best time to negotiate is on a Tuesday, Wednesday, or Thursday during the last week of the month. If the last day of the month falls on a Friday, the dealer competition may increase even more. Why? Well, let's think about it. The dealer just had their last strong shot at reaching a sales goal (the last weekend of the month) and the odds that they are bombarded with car buying customers on a Wednesday afternoon is slim.). The best time to negotiate is on a Tuesday, Wednesday, or Thursday during the last week of the month. If the last day of the month falls on a Friday, the dealer competition may increase even more. Why? Think about it. The dealer just had their last strong shot at reaching a sales goal (the last weekend of the month) and the odds that they are bombarded with car buying customers on a Wednesday afternoon is slim.
#2 New Car Buying Tip:
Collect Online Car Quotes Before Negotiating a Car Price
A handful of websites offer these free new car price quotes from up to 4 dealers at a time, such as Yahoo! Autos and Edmunds.com . We recommend that you collect at least three quotes, but not more than 20. If you have 20 dealers (of the same make – Ford, Toyota, Honda, etc.) in your area and receive all 20 quotes, you should have a very large sample of prices to choose from. There isn't a magic number. You may get the best quote on your first try. However, we've found that collecting between 5 and 10 dealer quotes paints a very good picture of the offers that are available.
#3 New Car Buying Tip:
Step up your game
If you want to really step your negotiating up a notch, CarSqueeze offers a guide to negotiating with Fleet Managers. Fleet Managers normally handle the bulk transactions for a dealership. However, the CarSqueeze guide walks you through negotiating with a Fleet Manager as an individual and receiving the lowest price for a new car. We've referred several of our personal friends and they now swear by this approach to new car buying.
#4 New Car Buying Tip:
Don’t under-estimate the effect of one car sale
We've already discussed the best time to collect your Car Quotes . Your car purchase could be the last sale that a dealership needs to receive a very large bonus, but creating competition between the dealers is the only way to know which dealer is the most desperate. If you happen to stumble across a desperate dealer, they may be so motivated to sell you a car - they sell it to you for a loss. Why? If they will be receiving a large Incentive bonus, that bonus will be more important to them than losing a couple hundred dollars selling a car to you. (Remember: cars are sold all the time under invoice. Read our Incentives page for details.)
#5 New Car Buying Tip:
Know the available (secret) incentives
Manufacturer-to-Dealer incentives are normally not disclosed until the incentive period has expired. Some of these secret incentives are listed on Edmunds.com (However, this list is not always comprehensive.) The best way to smoke out a secret incentive is to create a car quoting competition among the dealers. Websites, such as Yahoo! Autos or Edmunds.com offer free car quotes from up to 4 dealers. Read more about Incentives here.
#6 New Car Buying Tip:
Know the vehicle options that are available
Nothing shows that you have completed your homework more than if you know the vehicle better than the salesperson. For instance, some vehicle models are only sold in certain regions of the United States and snow tires are going to be difficult to find in Orlando, FL dealerships. You can find MSRP, invoice pricing, and available vehicle options on websites, such as Yahoo! Autos , or Edmunds.com
#7 New Car Buying Tip:
Negotiate From Home
Negotiate the price of your next vehicle via phone, email, or fax. This will give you time to receive quotes from multiple dealers, put dealers on an even playing field, and reduce the hassle. Negotiating in person can take 2-4 hours per dealership. Negotiating by phone, email, or fax can take 5-10 minutes per dealership.
#8 New Car Buying Tip:
Don’t make the first offer
Do not make the first offer – to ANY dealer. If a salesperson or manager asks you what you are willing to pay or the monthly payment you would like, they are not making small talk. They are trying to nail you down to a number. By setting a limit to what it takes to earn your business, you will never know if they were willing to go even lower. They will try this even when you apply online. Your best response is “I’m getting quotes from a few local dealers and the dealer that offers me the lowest quote will get my business. What is your dealership offering?”
If you make the mistake and answer this question with a dealer, you have essentially shown them all your cards and you lost a lot of leverage. Don't answer this question with other dealers. You can go back to dealer #1 after you have quotes from the other dealers to negotiate a lower price with dealer #1 will under-bid your lowest quote.
#9 New Car Buying Tip:
Avoid Bundling the Negotiations
Negotiate price, trade-in (if applicable), extended warranty, and financing separately. NEVER negotiate everything at one time, it is easier for the salesperson or manager to take advantage of you. If they ask if you have a trade-in or will be needing a loan, tell them that you’ll be happy to discuss that with them after you have selected the dealer that you will be doing business with. Stand your ground on this!
#10 New Car Buying Tip:
Get your Ducks in a Row
Confirm everything before visiting the dealership. You can waste a lot of time at a dealership if you don't confirm the details of your offer prior to visiting the dealership. Make sure to confirm the following items before you meet face to face: