Car salesmen: they have quite the reputation as shady characters who will take any opportunity to squeeze a little extra money out of you, force you over budget, or try to haggle you into a car you outright can’t afford. While that might not be totally accurate 100% of the time, that doesn’t mean you should naively walk into the dealership without first making sure that you have a negotiation plan.
After all, you want to make sure that you get the best car you can for the best price you can. In this post, we’ll cover 5 simple tips that will make negotiating with a car salesman much easier.
Set a budget and stick to it
One of the first things you should do when you’re preparing to head to the dealership is make a budget. There are plenty of online calculators you can use to estimate the likely monthly payments you’ll be responsible for depending on the price of the car and your financing options. Be sure you know both what your total all-in budget is and how much you’re comfortable with paying monthly, as well as what you’re willing to pay in car insurance.
If the salesman tries to push you past your budget, tell him that you can’t afford to spend more and that’s that. If you’re clear and assertive about what features you want from a car, what make and model you want, and how much you’re willing to pay, it’s much harder for a salesman to persuade you. The key is sticking to your guns.
Do your research
Before you head down to the dealership, make sure that you’ve researched everything you’ll need to know. Are you heading to a Mercedes Benz dealership near you or one that sells Toyotas and Mazdas? Do you know which model you’re most interested in particular? Luckily, you can look online and find out everything you need to know about a car before even heading over. Some items that you should research include:
- What the average dealership price is for the cars you’re interested in
- The features that come with the car and what versions of that make and model exist
- Reviews on the dealership you’re buying from that clue you into their reputation
- What the average closing costs are
- How much it costs to finance the car you’re interested in
That last item is especially important, and brings us to our next tip.
Secure external financing
Many dealerships offer in-house financing. They lure customers into the door with exaggerated claims that no money is due at signing and you get a low first-year APR on your loan. However, if you look into the fine print, many of these in-house financing options are a racket. Interest rates might be much higher than what’s normal, they might be hiked up after a year, or you may owe double in closing costs (spread out over your payments).
One of the easiest ways that you can secure a good price for your car is by providing your own financing method. Before you’re ready to drive to the dealership, make a trip to your bank or local credit union. A loan issued by a bank like Ally often has much lower interest rates, much better terms, and offer more consistent interest so you know what you’re getting yourself into. Plus, walking into the dealership saying you’ve already been approved for a loan for X amount is a great way to show that you know what you’re doing. It will give you more confidence in making your decision – and may even improve your credit score, too.
Know how to say no
Speaking of confidence, knowing how to say no is critical for those shopping for a new car. Car salesmen can be charismatic and charming, and may make you feel like you want to spend more than you actually do.
It’s important to remember your limits, know your budget, and assertively tell the salesman that you are not interested if he starts pushing you toward a vehicle that you can’t afford. It may appear rude, but that’s nothing compared to being saddled with massive monthly payments that you struggle to make for years.
Be prepared to leave
If things aren’t going your way and you don’t feel comfortable, you can always just leave. There’s no shame in it. There are other dealerships, other salespeople, and other days that you can buy your car. You should feel confident and happy on the day you get your new wheels; don’t let a bad car-buying experience ruin your new ride. Take it slow and find the dealership that works best for you!