Buying a New Car: Smart Strategies at the Dealership
Now that you’ve decided to buy a new car and have done some research into the make and model of vehicle you want, it is time to visit a car dealership. This part of the car-buying process can be intimidating and stressful. Salespeople know what they are doing and often play games that leave customers feeling disoriented and taken advantage of.
There’s nothing worse than leaving a car dealership feeling that you’ve been ripped off. Following these five steps will help to ensure that you are able to hold your own with a salesperson and get a good deal for yourself.
1. Time Your Visit Strategically
Timing matters when buying a car. By timing we mean everything from the time of year that you buy a car, to the time of month and even the time of day. For example, there are more incentives and deals on cars at the end of the calendar year when dealerships are racing to clear their inventory of last year’s models and make way for the current model year vehicles. You will also find better prices on various cars at month’s end when dealers are desperate to hit their monthly sales targets. And, it is better to go shopping for a car in the afternoon on a weekday when car lots are quiet and sales staff are more focused on you than on the weekend when the lot is busy and the salesforce is pulled in multiple directions. Factoring in timing will help you get the best deal possible on a new vehicle.
2. Ensure that a Test Drive Includes the Highway
Many car buyers take a vehicle they’re interested in for a test drive, but only go around the block once before deciding to purchase it. A once-around-the-block spin is not nearly enough to give a car a decent test drive. Give the dealership your license and tell them you’ll be back in a half hour. And make sure that a test drive includes some time on a highway or freeway, where you can really open up the engine and see how the vehicle performs. People are often amazed at what they find once they take a car on a highway and push the speedometer past 60 miles an hour. If the steering wheel starts to shake, it’s an indication that there’s an alignment problem with the vehicle. If you smell something burning, you may have loose wires or an engine oil issue. It's also not dumb to find a parking lot or quiet road and see how maneuverable it is when you try to parallel-park it.
You can kick the tires all you want. But it is a test drive that tells you the most about a car. Bonus tip: Many car dealerships let customers take a vehicle home overnight or for several days to test it out.
3. Visit Your Bank First
It is always advisable to talk to your bank and know how much car you can afford before visiting a dealership. You should also find out what the bank charges for car loans.
Surveys show the vast majority of people take dealer financing when buying a new car – either a loan or lease. Unfortunately, this is one of the ways to ensure that you either overpay for a vehicle or spend beyond your means and get stuck in unsustainable monthly payments. Test-driving financing with your bank will make sure you know how much to spend and how much that money should cost you. This information will help make you immune to the tricks of a salesperson (see Chapter 8). You'll also be able to see if your dealer's offer is better than what the bank will provide.
4. Focus on Needs vs. Wants
Just because you can afford a car with all the bells and whistles doesn’t mean you need a vehicle that is “fully loaded.” It also doesn’t mean that you’ll understand or even use all the technology in a car you buy. For example, most cars today come with cruise control, but studies show almost nobody uses it.
Keep that in mind and be honest with yourself about how tech savvy you are. Sure a touch screen navigation system is nice, but are you really going to use it? Car dealers say they often see people demand fully loaded vehicles with all the current technology only to watch them struggle to open the sunroof. More basic model cars are not only more affordable; they are also easier to manage. Exception: safety technology (see Chapter 4).
5. Be Prepared to Walk Away
The most powerful thing a person has in any negotiation is their legs. Use them to walk away if you find that you are not getting what you want, or if you feel that you are being taken advantage of at a dealership. Never feel pressure to agree to something that makes you feel uncomfortable. Leave and take your money with you.
If you want, tell the staff at the dealership that you need some time to consider their offer. You can also leave a contact phone number behind with the salespeople. Chances are that they`ll get in touch with you and make a better offer. After all, the last thing any salesperson wants to see is a commission walk out the door. Be patient and stand firm. A good deal is out there if you take the time to make it happen.
The Bottom Line
You don’t need to be a professional negotiator to get a great deal on a new car. Understanding how car dealerships work and being honest with yourself about what you need and can afford will go a long way to helping you get a decent vehicle at a decent price.
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