Buying a new car is daunting for the first-time or inexperienced buyer, and a world of opportunistic car dealers are waiting to upsell every customer to a price they can’t afford. Here are a few things to consider before approaching that automobile showroom so you don’t get taken for a ride.
1. Do Market Research
Whether it’s looking into the car dealer or researching the model of the car and what to expect, looking into the particulars will give new buyers the experience they need. Websites such as TrueCar will answer many of your automobile questions instantly. You will spend far more than necessary if you enter a showroom with zero information.
2. Use the Best Online Quotes
Often, you can ask to peg car prices at the manufacturer or dealership’s online quote. By asking a dealer to give you written confirmation of a price quote, you have instant leverage to use with that dealer or other dealers. Things written in black and white can give you far more leverage than you think.
3. Get Second Opinions on Financing
Every used car dealership worth its salt will have a financing package for non-cash buyers. However, before believing their reassurances about what they can offer, ask a few other dealerships for their best financing deals. Furthermore, check whether banks will offer you an automotive loan — their interest rates often eclipse car dealership offers, especially if you are buying a hybrid or electric vehicle (EV).
4. Don’t Buy New (Unless You Can Afford It)
A new car clocking 10,000 miles per annum will depreciate up to 60% within three years, so unless you have just won the lottery (or are rich), buying brand-new is a poor choice. Consider the previous year’s model; it will be close to the same — with just a few miles on the clock and likely only a third of the price.
5. Budget Your Way to Success
Car dealers have a gift for selling the association angle: “Sir, you look great in this car.” They will always push you for add-ons, extras, or luxury upgrades, but having a headstrong mindset and not budging on your budget will give you more negotiating power.
6. Price, Not Payments
When we buy cars, dealers can influence our choice by manipulating the monthly price. If a car is over your budget, spreading payments over a longer period may be easier to manage, but you are still paying for an over-budget car. Negotiating the cost of a car is the only way to save in the long term.
7. Try an Online Buying Platform
Many online buying platforms are available: Vroom, DriveTime, and Carvana are just three examples of used car websites where you can strike online deals instead of hitting the showroom. You can read customer reviews of sellers, see ratings for car models, and find kindred car buyers who can offer insight.
8. Check for Dealer Incentives
Often, car manufacturers give buyers great incentives to bring them on board. For example, Kia offers customers who buy their EV6 model $3,750 in cashback when purchasing a car in cash. You can leverage incentives in your new car journey by scouring the carmaker websites.
9. Time Your Purchase Well
Car dealerships often have quotas for sales targets at the end of each month, quarter, and year. While most dealers will be prepared for buyers who know this, they will still be keen to meet their targets. Finding the right dealership will save you a potential fortune if you can time it right.
10. Walk Away
People who sell cars are masters at bluffing, so they often pretend the threat of a walkaway doesn’t bother them. However, the threat of walking away and going to their nearest rival might give you an edge. Having the strength to walk away is a negotiating superpower, especially when you desperately want that model.
11. Trade Your Old Car Well
There are many resources, such as Autotrader and Kelley Blue Book, that can gauge the value of your used vehicle, making it easier to strike a trade-in deal. Dealerships will invariably offer you less than market value, and knowing your vehicle’s true value will push the overall cost down. It is also an option to sell your old car separately and put it toward a cash deal.
12. Get a Warranty
There are different types of warranties: the manufacturer’s version, which is the most valid one possible, or the dealership’s extended warranty, which adds costs to your total.
While some people will tell you extended warranties are the Devil, it depends on the model of the car you buy. A 10-year-old car would benefit from a dealership’s extended warranty, whereas a newer car might not. Always check with the manufacturer before agreeing to their warranty offer.
13. Buy on a Full Stomach
Car dealerships will push the process out as long as possible, making decisions more difficult. Perhaps you just need to eat! Some salesmen make buyers agree to a higher price just because they are hungry or tired. Negotiating a new car sale can be like pulling teeth if the buyer isn’t settled, full, and rested.
14. Buy New (If You Can Afford It)
While it’s not feasible for everyone, the market right now means used cars are valued much higher than just a few years ago. It might be due to the microchip manufacturing shortage caused by the pandemic, which has also pushed supply down, increasing demand for those who saved money during the lockdowns. This means you can sell a used car for nearly the same price in a few years, which seems more logical than overpaying for a used car.
15. Know Your Fees
Buying a car is a dream scenario for many people who work hard and save for the opportunity. However, this comes with a caveat that it will be stressful because car sales taxes, registration fees, and documentation charges come with each new vehicle, which will add up. The money you have budgeted for this expenditure must include these side costs if you don’t want to have any regrets.