5 Tips for Getting the Best Deal on a Car
When you think of buying a car, you might get the visual of a sleazy car salesman with slicked-back hair and winning sales pitch in mind. This Hollywood stereotype is often based in reality, and it’s true that buying a car can be a stressful, confusing experience. You know you want to get the best deal on a car, but you don’t want to deal with the pushy, overbearing salesman that comes with it.
Luckily, you don’t have to put up with this stressful encounter. Buying a car is a normal part of life. As much as we’d like to avoid it, we all will likely need to face that dreaded car salesman at one point or another. At the same time, car prices are on the rise. Even used cars averaged a cost of $20,000 in 2018. If you want to get the best deal on your next car, read these tips.
1. Do Your Research
Your first step is to simply do research before you ever step onto a car sales lot. Going in blind will just open you to influencing from salesmen. Knowledge really is power in this case. Start by searching for Kelly Blue Book pricing to determine the range you should be looking in for the types of cars you want, especially if you’re buying a used vehicle.
If you’re planning to buy a new car, you’ll also want to do some research. Dealerships often share the MSRP of the car, but not the invoice price. The invoice price is what the dealer paid the manufacturer, so that’s what you need to know for your negotiations.
2. Avoid Dealership Financing
Most dealerships offer a variety of financing options. They like to say that this makes it easier to afford a car, but the reality is much different. Dealerships offer notoriously poor financing options, and you’ll see much higher interest rates if you aren’t careful.
Instead, look for an outside financing option like a bank or credit union. For instance, if you need a truck loan, look for truck title loans that are reputable and not associated with the dealership. This extra step is worth the big savings.
3. Negotiate Your Terms
The more knowledgable you are about sales terms, the better off you’ll be. Buying a car is a big investment. In fact, it’s probably one of the biggest investments you’ll ever make. You can negotiate your loan with your lender, whether you’re using a bank or other professional lending institution.
In addition, negotiate the price of your car. It’s okay to start with a low price and work backward until you reach a point of agreement with the salesman. Negotiation is expected, so don’t be afraid to act with confidence.
4. Be Quite About Your Trade-In
If you plan to trade-in your current car, don’t mention this until the end of the buying process. Many dealers will use this against you. For example, if you’re looking at a car listed at $15,000, and the dealer’s lowest price is $13,000, they might give it to you for $15,000 by encouraging you to trade-in your car for that additional $2,000 off. If you hadn’t mentioned your own car, you might have secured a lower purchase price.
5. Skip the Add-ons
Finally, avoid buying all of the add-ons the dealership promotes. These can sound really tempting at the moment, but you probably don’t need many of these extra features. You can buy many of these upgrades yourself for significantly cheaper. The same goes for dealership maintenance plans which are generally much more expensive than going to your own mechanic or auto shop in your local area.
Get a Great Deal
Though a large investment, buying a car isn’t the same as other types of investments. Unlike a house, your car loses value as soon as you drive it off the lot. To be specific, it loses more than 10% of it’s value within your first month of driving it.
The more attention you can pay to the purchase process, the more confident you’ll feel about making a purchase. You’ll be using your car a lot, so make sure it’s a purchase you’re proud of.