Buying a car is all about negotiation and information. It used to be that car dealers held all the cards when it came to information, but with the internet, that’s changed. If you’re in the market for a new car, you’ve got some serious homework to do if you want to get the best deal. It’s all about arming yourself with information.
First Things First: Finances
Most people need to get a loan when buying a new car, so the first step is to get online and do some research into your finances. First, check your credit score, which will have a big impact on the rate you get for your loan – and how much you’ll pay in interest. If you’re flexible, it’s worth taking the time to improve your credit before you buy a new car.
The worse credit you have, the higher your rate is, and that can translate to several thousands of dollars more in interest over the life of the loan. If you know your FICO score, you can find out what the interest will likely be (if not, use this general auto loan calculator). Factor this money in when you decided your price point for a car. You may decide not to get the top-of-the-line model after all.
Finally, get some quotes from different car insurance companies. Happy with your current car insurance company? That’s great, but know that insurance rates for the same model can vary significantly from company to company, and switching companies might end up saving you hundreds of dollars a year.
Now Research the Cars
Average cost of a particular model will vary somewhat by zip code. It’s worth looking at prices of the model you’re after in the next town or two over, as they can be cheaper. Websites like CarsDirect and AutoTrader are a good place to start. If you hate haggling, then TrueCar might be for you. Not only do you sidestep the haggling process, but customers pay 9.7% less than sticker price when they use this site. Also look for rebates, cash-back programs, and low-interest deals on the model you’re after.
Salesman make their money on commission, so it’s common practice for them to try to sell you on the extras. Again, the best solution is to arm yourself with information. Many car manufacturer sites let you “build” your own car online, showing how much each option costs as you go. The best idea is to know beforehand exactly what options you want, but at the least you should know what everything costs. That way you won’t be blindsided during the negotiation process.
If you’re thinking of trading in your old car, find out how much it’s worth. Both Kelley Blue Book and Edmunds can give you an idea of how much you can get for your older model.
Then Get to Know the People
Building a relationship with a salesman is a great way to give yourself an edge, but it takes time. You might have luck emailing the salesperson, like this woman did.
You can also pit salespeople against each other. Look around and find the lowest price for the model you can. Then contact other dealers (via phone or email) and ask if they can beat it. See how far they will go to win your business.
Finally, Get the Right Mindset
Research general tips on buying a car and how to become a better negotiator. The internet is a fantastic resource for information, but it can’t change your mindset. If you don’t get a deal you’re happy with, walk away. There will always be more cars for sale. Remember that you are in the driver’s seat.
