Who doesn’t want to save money? This applies to any major purchase, particularly when it involves something as substantial (and expensive) as a house or a vehicle purchase. You wouldn’t just buy the first car you see, would you, or whatever the dealer is trying to sell you?
With this in mind, here are some tips to save money at the dealer on your next new (or used) car.
Dealers have the most inventory – Your chances of being able to negotiate a better deal, saving you money, are better when you buy from a dealer than a private individual. That’s because the dealer has inventory on the lot that he needs to move. Every day a vehicle sits there, the dealer is losing money on it. And the dealer will be more likely to pare the price when new models are arriving. Clearing out old inventory is a big incentive for the dealer to offer you a better deal – on the new or certified pre-owned (CPO) vehicle.
Buy at the end of the month – One little-known tip is to arrange your new car purchase at the end of the month – if you’re buying from a dealer, that is. The reason for this is simple: Dealers have monthly sales goals and in order to meet their goals and have a profit, they need to meet their targets. What this means for you is that the salesperson is more likely to be willing to deal, or ask the manager for a deal, when it’s at the end of the month rather than any other time. Timing your purchase means you can save money, so take advantage of this tip. Best time to shop is four or five days prior to month’s end.
Do research and price comparisons – ahead of time – There’s just no getting around the fact that you’re going to get a better deal on your next new (or used) car you buy at a dealership if you do all your research and obtain price comparisons – before you step foot on a dealer’s lot. Use the Internet to start your search. Check out auto comparison sites and enthusiast sites. Go to the manufacturer’s website of the vehicles you’re interested in. Learn about any applicable special incentives, rebates or financing deals.
Visit at least two dealers – You want to have leverage, so it’s a good idea to visit at least two dealers when you’re honing in on the new (or used) car that you’re about to buy. Get a written price quote – and negotiate the price before anything else. With that piece of paper in hand you’ve got a leverage tool to help drive a better price at a competing dealership.
Know what the dealer paid – Always know what the dealer paid for the vehicle and negotiate from that cost, not the manufacturer’s suggested retail price or even the invoice price. Dealers typically get money from the manufacturer, called holdbacks, so that their bottom line is less than invoice.
How can you find this information? ConsumerReports.org provides these numbers, part of their New Car Price Report. It’ll cost you $14 per report, but it’s worth it if you are armed with the dealer cost on the model you’re interested in. Savings of hundreds, even up to $1,000 are possible, when you make an offer based on that number. Expect some pushback from the salesperson, but negotiate from the position of strength and you’ll be in a better position to save money on your new car purchase.