Guerrilla Approach Best When Car Buying

Buying a car is one of the last bastions of freewheeling price negotiation, and there are ways you can come out ahead.

Don’t be addled by the salesperson’s knowledge—whether real or put on—and remember to take emotion out of your financial decision-making. This is a business transaction, nothing more. To be sure, you have probably gone to the dealership with a specific car in mind—one you may even love. But don’t let the dealer know this, or you can be taken for a ride.

best-approach-car-buyingInstead, arm yourself with lots of information about the car or type you want. Research the car online. Check for your must have bells and whistles, and those you can do without. Pay a visit to at least two dealerships before making your selection. The one you finally choose may be based on any number of factors including pricing, variety or a recommendation.

Dealership ‘intelligence’
By going to a “beta” dealer initially, you can gather even more intelligence about the car you want. It never hurts to tell the salesperson you are “Just looking,” even though your heart is set on that kelly green Mazda Miata. But do get an offer from them as a leveraging tool.

You’re several steps ahead when it comes time to negotiate if you already have pricing research in hand as well as a pre-approved financing offer.

It’s also critical to be totally honest with yourself about what you are able to pay. Remember that your monthly payment is only one component of car ownership. There are fuel, insurance, parking and maintenance costs to consider.

As for timing, try to shop during off hours. If you can be at the dealership on a weekday, you will have fewer customers to compete with and the salesperson may be a bit hungrier. That could well mean a better deal for you.

And be a tough negotiator. Remember, you have another dealer’s offer, so you are saying in essence that you will walk away. You also have pre-approved financing, so you are a good-to-go buyer. Both are strong parts of your armament.

Down to brass tacks
Make your first offer the vehicle’s invoice price, including any options or packages and the automaker’s mandatory destination charge.

The salesperson will probably make a much-higher counter-offer. You should then raise your initial bid by an incremental amount, say, one or two hundred dollars; the salesperson will likely lower his or her price in the same manner.

This may go back and forth for a few rounds, and when the two proposals become close, the salesperson will typically “present your offer to the sales manager” (in reality, he may be just grabbing a quick cup of coffee or a drink of water).

Chances are he’ll return with a higher bid. If it’s still not close to your last offer, try standing firm; if it’s considerably higher, continue negotiating until you come to terms or do, indeed, walk away.

Not done yet
If a deal is struck, move on to your trade-in, rebates and incentives. You will not get Kelly Blue Book on your trade-in, but you could get 10 percent below it, depending on the condition of your car, experts say.

When it comes to financing, go with your credit union and not the dealer. Many dealers have in-house financing arrangements with certain banks that equate to higher rates for you.

When you’re in the finance office signing the final paperwork, the finance manager is likely to offer you any number of add-ons, from an extended warranty to paint protection or key insurance. Many of these items can be purchased from outside companies, including your lender, insurance agent, or independent shops. If you’re interested, be sure to do your research up front, so you have an idea of what you should be paying.

Resources: U.S. News & World Report, Forbes, Kelley Blue Book