Wednesday, October 5, 2011

Tips on Negotiating for the Best New Car Price

For most, the thought of negotiating that new car price brings up dread. Negotiations are often endless and many are nervous about bargaining to begin with. There are ways to make the process easier, however, as well as more financially rewarding and more comfortable for the buyer.

Try these steps to get the best new car price on your dream vehicle.
  1. Dealer cost of a car is comprised of four different components. These include Holdback, Dealer Invoice, Hidden Dealer Incentives and Advertised Rebates. Before proceeding, one should find out how much the dealer paid for the car. Use an online calculator to figure dealer invoice pricing. Look up the make and model of the car, be certain to include the options you plan to get. Once you find this, print the page out and keep it for later. The advertised rebates of the car you wish to buy will affect your beginning offering price, so be sure to know what these are for the make or model you are seeking.
  2. Some manufacturers give incentives to the dealers. You would only get them if you ask for them. So learn what they are and ask for them. This can be done online. If not, then the dealer will keep the incentive.
  3. Put all of your information together to find the actual dealer cost of the car. Take into account the dealer may pay for joint advertising along with other dealers. This cost does affect each car sold, but will not be on the sticker price. The holdback is the percentage of the MSRP that the dealer will get back from the manufacturer.
  4. Look at negotiation from the negotiator’s perspective. A difficult part of negotiations is that, typically, you do not really know the bottom line of the other party. However, if you have done your homework, this is not true.
  5. As a rule of thumb, assume the dealership will not accept less than three percent profit on a car. So, once you have determined the dealer’s price of the car, tack on three percent. Knowing this, you will need to stay focused so that you can avoid all of the mind-tricks and game-playing from the dealership.
  6. Get quotes on the car you want via the Internet. Print these out and bring them to the dealership with you. Use dealers nearest you. This will let you begin your negotiations in the comfort of your own home.
  7. Once you have the quotes, gather all of your paperwork. Decide which car you would like to buy on the lot.
  8. Then write down all of the pricing information on the sales sticker. Calculate the price for that car using the information from above. Then, let the salesperson know that you want to buy the car at invoice.
  9. Keep in mind that, with any car, you will want to purchase an extended car warranty to protect your investment as well. You may need to factor this price in if you plan on buying with the dealer.
  10. Use the paperwork you printed and gathered to form your final offer.

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