Readers are encouraged to send in their questions about the car buying process. Get answers from an industry insider!
We began this thread a few days ago with the question: What is the best way to start looking for a new car? Should I begin online or visit my local car dealer? The short answer is you will save hundreds, if not thousands of dollars by contacting your local dealer by email and asking for a quote. This compares to walking in the front door and asking: “What’s your best price?” See the original post.
Even most experienced new car buyers are content to pre-negotiate just the selling price of the vehicle. As Internet Manager for a major car dealer, I used to love when that happened. It resulted in buyers letting their guard down and believing they had the best deal possible. They didn’t realize there are multiple profit points needing to be dealt with when buying a new car. Handle these ineptly and it can cost you hundreds, even thousands of dollars more than necessary. Amazingly, that’s after you have negotiated the selling price of the vehicle down to the invoice price or below.
Car dealers don’t like pre-negotiating anything, let alone everything. No one said this would be easy. However, it’s good to remember that as the buyer you have a natural advantage that only you can give up. The advantage you have over the dealer at this stage is to stay away from the dealership and communicate by email until fully satisfied with all the terms of the deal. It’s like a game of chess where the customer who walks into the dealership too soon loses the advantage. They can still get a good deal, but it’s more difficult to get a great deal, and it can’t help but be more stressful.
Get Your Ducks in a Row
The savviest of car buyers pre-negotiate more than just the selling price of the car before they walk in the front door of a car dealership. The interest rate and term of the loan affect the overall cost of a car. Why not nail those figures down in advance as well?
What about the cost of accessories, extended warranty programs, and other items which add to the cost of vehicle? If you pre-negotiated everything before showing up at the dealer you stand to save even more money. If that’s the case, why don’t more people do it? We’ll look at that question in tomorrow’s column.