Negotiating with a dealer on car trade-in value and other charges could be tricky, especially when you rely on someone who wants to sell you a car and guides you throughout the process. Here are few points that will help you negotiate for the best price.
Shop for your own financing
For most of us, financing a car is more convenient way than making a big down payment. Most dealers offer loans, but it’s important to check your credit union or bank, before finalizing the new car deals. There might be other dealers or organizations offering you a low interest rate on easy terms. By visiting some dealers, you will get an idea of rates and make a better decision.
Never be afraid to walk away
Don’t feel uncomfortable to walk away, if you don’t satisfy with deal or feel unfairly treated, while purchasing a new car. This will possibly make the dealer to stop you and negotiate for the price.
Know the invoice price
Invoice price refers to the money that a dealer has to pay to the car manufacturer. Everything above that is dealer’s profit. Dealer makes profit, even if a buyer pays the invoice amount, since most carmakers reimburse some percentage of their vehicles’ MSRP on quarterly basis. There are several websites that provide invoice prices and cash rebates of the vehicles. This will help you negotiate with the dealer.
Watch all areas of the foursquare
Car salesmen, usually, maintain a worksheet – foursquare - to record major deal factors such as down payment, purchase price, monthly payment and trade-in value. You can try to negotiate on the sheet’s facts. Dealer might reduce your down payment, but it will increase your monthly payments and also inflate car price. The foursquare provides two important figures - interest rate and loan term - that decide your monthly payments and the total sum to be paid.
Never negotiate monthly payments
Don’t negotiate for low monthly payments, while negotiating for the vehicle’s price. Monthly payment is directly proportional to the down payment, loan term, and interest rate. If you get a fair purchase price, car trade-in value and a competitive interest rate, your monthly payment will be as low as possible.
Don’t let your trade-in be used against you
Don’t talk about trade-in until the purchase price is finalized. After settling the price, you can ask for a good deal on the trade-in, too.
Just when you thought it was over
Your deal isn’t closed until you don’t negotiate on fees and extra charges. All extra charges, usually, are overpriced and unnecessarily imposed by the finance manager. However, some fees are unavoidable, but you can bargain for that too.
