When I was Internet Manager for a major car dealer, I was shocked at the number of people that simply walked onto our sales lot and said, "I need a car now." They hadn't done any research on which vehicle they wanted, or on price. Needless to say, these were the preferred customers of successful car salespeople because they knew from experience that here was an opportunity to make some serious commission.
Get Help Online
We discovered yesterday in this series entitled, "Top 5 Mistakes that New Car Buyers Make" that you should always begin your vehicle search online. Stay in control: stay away from the dealership until most aspects of the deal are pre-negotiated. There are ample tools online to help you determine which make and model best suit your needs. Visit dealers to test drive, but don't engage in the normal banter, and be sure you don't talk price, no matter how tempting it is.
When you know which vehicle you want, contact multiple dealers in your area by email -- not by phone or chat -- and ask for a price quote on the exact vehicle you want to buy. Be as specific as you can about the vehicle's details. This can include engine size, trim line (LX, EX, EX-L, and so on) options, color, accessories, and anything else related to the vehicle itself.
Not sure where to get quotes?
-- Edmunds.com. At the top of the homepage click on New Cars. You'll be able to submit a request to multiple area dealers for a price quote. Also see the MSRP, invoice cost, and what others in your area are paying (called the TMV - True Market Value). Edmunds also has a page that outlines current incentives for each manufacturer.
-- KBB.com. At the top of the homepage click on New Cars, then Search by Make & Model. Follow the steps to view the MSRP and invoice prices, and to submit your request to multiple dealers in your area.
-- TrueCar.com. This is a relatively new website that's available to consumers. They are doing a great job of putting all the information you need in one colorful graphic.
-- Go to the manufacturer's site. Most vehicle manufacturers help you get quotes, find local dealers, and so on.
As a general rule, if you walk through the front door of a dealership and ask about price you'll begin negotiations at the Manufacturer's Suggested Retail Price (MSRP) or higher. Contacting the same dealership's Internet department will get you a much lower price, often invoice or less, depending on the make, model and other factors.
Once you have a quote from two, three, or four dealerships, work one against the other by email until you get to what seems to be the lowest price available. Compare that to your research and chances are you'll be getting more than a good deal. Good luck.
Tomorrow, Mistake #3 - Not Getting Pre-approved on Your Car Loan.