New Car

	Car Buying Advice
How Buying a Car On-Line Works Buy a New vs. Used Car Car Buying Money Saving Tips First Time Car Buyers Guide How to Negotiate Car Price

How to negotiate car price

As a car buyer, it's easy to run into pitfalls along the way. We'd like to help.

The car buying process was specifically designed to be complex, difficult, confusing and painful - thus profitable for car companies - so you will need current, accurate information to help you avoid the many pitfalls. Let us show you how to negotiate a car price and save money!

You can gain confidence in the buying process if you understand the answers to the following questions:

• Why do most people have so much trouble negotiating for a car? Because Americans only negotiate for 2 items - cars and homes (and with homes you have an agent to handle the process).

• What is a fair amount of money to allow a dealership to make on their sale? Generally, the more expensive the car, the more profit is built into the price. In general, your offer should be 5% over dealer's cost, not over invoice price. Add destination charge, taxes, and other fees on top of this 5%. (Grocery stores earn 1-3% profit.)

• Should I buy a new or used car? The best bargains can be found on used cars with between 12,000 - 18,000 miles on them. New cars can drop up to 40% in value in their first year!

We hope the answers to the following questions will help you avoid some of the many pitfalls car buyers run into.

• Can sales staff make a sale without manager approval? Generally, no. The salesperson is mainly there to wear you down.

• Are there advantages to leasing? If you don't have enough money for a down payment and you want a smaller monthly payment, leasing may be better.  Because of these advantages, car dealers tend to make larger profits on leases. While it may be easier and have lower up front costs, the final cost isn't apparent until the end (fees for mileage, damage, cracked glass, etc.)

• Why do car sale people use high-pressure tactics? Because salespeople work on commission, so the higher the price of the car and the more options they can sell, the more money they will make. Additionally, salespeople have quotas, so their jobs are at stake. Finally, salespeople know that if they don't close the sale today, they probably won't get another chance. (Only 3% - 6% of car buyers come back to the same salesperson.)

We'd like to help you avoid some of the many pitfalls that can arise along the way during the car buying process.

To do this, we suggest you carefully consider the following before buying a car:

• How you can become a better negotiator

• What is the fair amount of money to allow the dealer to make on your transaction

• Should you buy a new or used car

• Should you rely on the salesperson to make the final decision on accepting your offer

• Should you lease or buy a car

• Why salespeople use high-pressure tactics

You can gain confidence in the buying process if you understand the answers to these questions.

Here are 2 secret methods that you should consider using the next time you go to the dealer. Knowing these can save you thousands!

Secret Method #1: Bring a Distractor

One less known way to avoid some of the pitfalls of car buying is to bring along a “distractor” when you go to the showroom.

Why should you bring a distractor?

• It’s better not to have all the power when you enter into the negotiation because it’s advantageous for the salesperson to think you can’t make the final decision.

• It’s good to have someone whose only job is to make sure that things don’t happen exactly according to the salesperson’s plan.

• It’s helpful to have someone to distract the salesperson and relieve the pressure when the salespeople team up on and pressure you.

It works like this:

Salesperson (attempting to close the deal): Now that I’ve answered all of your questions, what will it take to get you to buy this car today?

You (feeling pressure): I do really like the car, and I can’t really think of a reason not to buy it now, but…

Distractor (giving you time to think): I was just wondering – does this car come in a pearl white? I really like pearl white.

Salesperson (iritated): No, it doesn’t. As I was saying, what do you want to pay for this car now that you have spent 3 hours looking at it?

Distractor: Why not? It would look awesome in pearl white!

Salesperson: How about you just give me an offer for me to take to my manager, and we can see if he’ll accept it?

You: Why doesn’t it come in pearl white?

Sale person (frustrated but treading carefully): The manufacturer only makes it in three colors.

You (having had time to think): Let’s talk a little more about getting a better price for my trade-in.

As you can see, the distractor averted the pressure position given by the salesperson and allowed the buyer to go on negotiating the deal.

Make sure you have a distractor at a dealership to interrupt the salesperson’s presentation and allow you to get the best deal!

Secret Method #2: Broken Record Tactic

One of the major pitfalls for car buyers is negotiating, but if you use the “broken record” tactic, you can gain an upper hand!

This is one of the best tactics that a car buyer can use to wear down car salespeople. It’s basically just a constant restatement of your point of view with a reasonable explanation at the end.

It goes like this:

You: I understand you want to sell the car for $28,500, but I can only afford $26,500.

Salesperson: I would love to sell you this car, but my manager won’t let me make a deal with almost no profit.

You: Yes, I know the deal isn’t great for you, but at $26,500, you will be making a good profit.

Salesperson: But we’re losing money at that price.

You: You will make a decent profit, and if you look at the figures, you will see that $26,500 is fair. Other dealers are offering the same car at $26,000.

This cycle can be repeated until a deal is reached. There is no real counter to this technique as long as it’s done well.

Give this powerful technique a try!

Summary

We’ve been giving you tips on how to avoid some of the many pitfalls that can arise along the way during the car buying process.

As a reminder, we suggest you carefully consider the following before buying a car:

• How you can become a better negotiator

• What is the fair amount of money to allow the dealer to make on your transaction

• Should you buy a new or used car

• Should you rely on the salesperson to make the final decision on accepting your offer

• Should you lease or buy a car

• Why salespeople use high-pressure tactics

You can gain confidence in the buying process if you understand the answers to these questions.

For more information on answers to these questions and more, please check out this website.

Related New Car Buying Links
2007 Saturn Sky - The New Convertible Roadster Car Finder