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New Cars Prices - How to Get the Best Prices on New Cars

dealer tip getting trade

Buying a new car should be a joyous occasion and a positive experience, but the fact is that it is a stressful and sometimes frightening process. The reason for this is because many of us are aware that new car dealers have a whole arsenal of tricks at their disposal to get you to pay more than you should. Some car salesman are so good at this that they send you off feeling like you got a fair shake only to discover days later that Bob at work got the same car for hundreds or thousands of dollars less. By following a few simple words of advice, you can assure yourself you are getting the best prices on new cars.

Tip 1

When deciding on new cars, prices should be of primary concern. Even before deciding on a make and model, it is important to think about the price. This means that you should start looking at financing first. Compare a variety of lenders, including banks, credit unions, and car loan specialists. When you have found the best rates, go ahead and apply. Then, when it is time to confront the salesperson, you have already taken away one of his or her most powerful bargaining tools.

Tip 2

Be prepared. There is more preparation to be done than getting pre-approval on an auto loan. Now it is time to research cars in which you are interested. Do not rely on looks alone. This is a mistake made by a lot of people and they end up getting stuck with a vehicle that is unsafe and unreliable. It is important to read expert reviews. Seek out trusted sources, such as national auto magazines and Consumer Reports. Compare similar models of different makes. Pay attention to safety, breakdown rates, fuel economy, and handling. Take some time with the process. Go to a dealer and take a car for a test drive, but do not get mixed up in bargaining just yet. Be firm that you only want a test drive and nothing else. Getting the best prices on new cars is not always easy, but it is always rewarding.

Tip 3

If you have a trade-in, discover its value before taking it in to a dealer. This is not difficult, but it does require you to be objective. If you are unable to ascertain the condition of your trade-in, ask a friend or relative who can provide you with a different perspective. Use resources like Kelley’s Blue Book, the NADA Price Guide or the Consumer Reports Used Car Price Reports. Remember, for a trade-in vehicle, only pay attention to the wholesale or trade-in prices. You are not selling the car retail.

Tip 4

The next is to try to ascertain the price the dealer paid for the car. This is never readily apparent. New cars’ prices are cleverly hidden. If you look at the price sheet, it appears that the dealer is paying the invoice price, but this is a subterfuge. The dealer gets one or more discounts that are not listed on the price sheet. The invoice price that is commonly available is more than what the dealer is paying. Some price guides and internet sites will tell you the real price dealers are paying. Look for price guides or information that includes three common types of dealer discounts: holdback, incentives, and rebates. Once you determine approximately what the dealer paid, start your negotiations from 1% to 5% over that price. This is a fair profit range.

Tip 5

Do not let a salesperson try to negotiate around a monthly payment figure. Salesmen will also try to mix together several payment options around a monthly figure. This tactic gives them some leeway to get a little more money out of you than is necessary. Be firm and tell the salesman directly that you are only interested in the final price of the car. Let them know that you are aware of what they are paying and you will not pay over a fair profit margin of 1% to 5%.

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