Car Buying Tip #1 – Beware of Advertised MSRP
Sometimes we go to a dealership thinking the advertised MSRP is the price on the car you want. However, the actual invoice price on the car may things like window tinting, sealant, dealer fees, etc. that are beyond the advertised MSRP or what was listed on their website. Or they have advertised the price with special rebates that you may not qualify for, such as a military discount. And, sometimes they may only have one car on the lot at the actual advertised price which may, or may not, be there when you get there.
Dealing with Car Dealers Tip #2 – Keep your Eye on the Actual Car Price
When it comes to negotiation, go in with what you are willing to pay for the car. Try to avoid negotiating based on what you are willing to pay per month, as that can open the door for a lot of back and forth shell games, especially if you are also attempting to trade-in your old vehicle. That is when dealers may adjust your trade-in offer and increase add-ons and extra fees. Or, they may give you what you want for your trade-in, but then mark up the selling price or extras and play with interest rates to ensure they are still getting the same dealer profit. At the end of the day, the dealer is looking to make a profit, as they do run a business. That is fine, but you need to keep an eye on the actual price of the car and make sure that is not being adjusted out of your favor.
Negotiating with Car Dealers Tip #3 – Negotiate Based on Dealer Cost, not MSRP
The invoice cost on the car is not the actual dealer cost. You will want to negotiate up from the dealer cost, versus down from the MSRP. Calculate the dealer cost and present an offer at three percent more than dealer cost. But, you may have to be willing to go up to five percent. This dealer cost is invoice price, minus factory to dealer incentive, minus factory holdbacks. Holdbacks are what dealers get from the factory after they sell the car. Some calculate holdback based on invoice price and others on MSRP. The holdback amount can vary from zero to three percent of invoice or MSRP.
Working with Car Dealers Tip #4 – Don’t Buy on Impulse
If you visit the dealership with the intention of buying that day, it can cost you more money, especially the longer you end up staying. You have to be willing to leave and comeback later. In fact, set a time limit for negotiation, perhaps at a half hour. If it goes longer you leave.
Buying a Car – Dealers Tip #5 – Eat Before You Go to the Dealer
Make sure you eat something and have a full stomach. If you are feeling hungry, sometimes it makes you distracted and willing to settle for an offer that costs you more money. Also, if you have a headache or just not feeling well, it is probably best to just get up, leave and perhaps come back another day.
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How to Use this Information
There are lots of little things you can do to ensure you get the best deal for a new car and ensure you are getting the most for your money. Also, realize that the dealer must make money, too, in the transaction. And, yes, the salesperson does depend on that commission. So, you need to be fair in what you are asking and do a little homework. We hope this information helps, and should your car get into an accident, we can help restore it to new. Call us at 303-344-2212 or contact us online.
