Negotiating a car sale.

If you don’t negotiate you are going pay too much!

If you don’t like to negotiate you can accept the dealers first offer. Do this and you are going to pay too much!

Never buy a car based on payments or you will pay too much!

Never buy a car based on the trade in amount you get for your old car or you will pay too much!

A car salesman negotiates multiple car sales every day. You, as a buyer, only negotiate one every 2 to 3 years. Who do you think has the advantage?

Fortunately the internet has made negotiating the price for a car much easier for consumers. You can compare offers from multiple dealers online, and leverage competing price quotes to obtain the lowest price possible

The easiest way to win the car price negotiation game is to make several dealers compete for the right to sell you a car.

• Be specific in requesting a price

• Get prices online

• Find out what the dealer paid

• Find out if there are any rebates or incentives

• Find out about dealer holdback

• If trading your old car keep that separate

• Contact dealers in your area by e mail & request a price quote

• Select the lowest bid

• Re-contact all dealers except lowest

• Repeat as necessary

Whenever you request a price quote you should always be very specific. For example, don’t ask for a price on a 2006 Accord EX in black. Instead, ask for a price on 2006 EX V6 with Navigation, and automatic transmission in Nighthawk Black Pearl. If there are any accessories you want added to your car, such as a rear wing or DVD player be sure and specify that as well.

This serves to put everyone on notice that you are an educated consumer who knows exactly what you want. Your request is more likely to be taken seriously, and you may get a lower initial quote. By requesting a quote upfront for all the optional equipment and accessories you want it prevents the dealer from trying to bait and switch you by quoting you for a cheaper, entry level car, then trying to up sell you to a more expensive model.

This allows you to compare the total package. If dealer A is $200 cheaper, but they are charging you $400 more for the accessories you want, then that is not a good deal.

When comparing quotes be sure to ask about any added fees that may be tacked on to your final price.

Never negotiate or ask for a price while you are physically at a car dealership. Always conduct your price comparisons over the web, by e mail, or on the phone. Why? Because at the dealership you are on the salesperson’s turf. He or she is in control of the situation, and has a support staff of colleagues and management standing by to try to pressure you into making a decision today. By talking price over the phone and by e mail you remain in control of the purchase process.

Your first step in negotiating should be to research online price information at automotive web sites like Edmunds and Yahoo Autos. You can find the MSRP, or Window Sticker price, for any car, plus you can find the dealer invoice price, the price the dealer paid the manufacturer. You can also find out about any rebates or incentives available on the car.

You should also find out how much holdback the dealer receives on the car. Holdback is a hidden payment that car dealers receive from the manufacturers that add to their profits.

Remember, this is only the first step, but it should give you an insight into what the going market price is on the car you want to buy. I recommend that you get an online price quote from both Edmunds and Yahoo Autos.

Next, e mail all dealers in your area that carry the car you want and request a price quote. Be sure to keep your contact limited to e mail for now. It gives you more control over the negotiating process, and it will give added weight to your subsequent telephone or in-person contacts.

The more quotes you get the better. Don’t just get prices from one or two local dealers. Go as far out geographically as you are willing to travel. Would you drive 200 miles to save $1,000? If so contact every dealer within 200 miles. Even if you intend to buy locally you may be able to use the quote from 200 miles away to gain a price concession from your local dealer. Try for a minimum of 5 quotes, but 10 is better.

Compare your quotes and select the lowest. But you’re not ready to buy yet. Actually, you are only about halfway there. Re-contact all the dealers, still by e mail for now, except the lowest bidder. Share your lowest price with them, and ask them how much they are willing to beat it by. Make sure they all know you are also getting bids from other dealers.

Once this round of bids comes in repeat this step again. How many times can you do this? Keep it up as long as it is working. That is, as long as you continue to get lower and lower prices keep asking for quotes.

Once you reach the point that your e mails are not producing lower prices it's time to contact the dealer by phone. Call each person you have made contact with and inform them you are very close to a buying decision. Restate the best price you have been offered, and ask them to do better. You may have already attained the rock bottom price by e mail, but it doesn’t hurt to ask once more by phone.

You’ll have to weigh the prices for yourself to decide where you want to buy. The lowest quote may not always be the best deal. If your local dealer is $100 to $200 higher than someone who is 100 miles away, then I would buy it from the local dealer. Your time is worth that much, not to mention the cost of gas to drive there and back. But, if you can save $500 by driving I’d go for it.

If you are trading in your old car then at some point you will have to go to the dealership and negotiate this part of the transaction. However, you should treat this as a separate transaction from your purchase. Request a price on the new car first, and then request a price on your trade in. I suggest that you do not reveal the fact that you even have a car to trade until you arrive at a satisfactory price on the new car.

You must know what your old car is really worth on the open market. Many people overestimate the value of their car, but just as many underestimate it. At Edmunds you can check the value of your old car online. It even has adjustments for low or high mileage and optional equipment. This is a great way to make sure you are getting a fair price on your trade. Edmunds will give you trade in value, which is what you can expect from a dealer.

You can also get a private party value, which is what you could expect if you sold the car yourself to another individual. Private party values are a little higher, but if you are going to sell the car yourself you should plan on spending some money on the car to spiff it up. Have any needed repairs done, especially things like, brakes, windshield wipers, headlights, any safety items. Clean the car thoroughly inside & out, or pay to have it professionally detailed. Don’t spend more than you can reasonably gain by trading.

Always get trade in bids from more than 1 dealership. If dealer A is $300 cheaper on the new car, but dealer B offers you $500 more for your old car, then go with dealer B.

Be careful not to negotiate a great price on a new car, only to give back all the savings by accepting less than market value for your old car. Always know how much your car is worth.

Many dealers will try to play games with you by trying to focus the negotiations on how much they are giving you for your trade. In reality, they are just jacking up the price of the new car so that it appears you are getting more for your old car. Never make a decision based on a trade in figure. Look at the big picture.

Never negotiate based on payments. Unscrupulous car dealers may say “will you buy today if I can get your payments at $600 per month,” knowing full well there is no way you are buying at $600 per month. They will play games with you, chiseling your payment to $550, $500, $450, until they reach your comfort zone. What happens is that $600 per month was based on 36 month financing. They just extend the loan term to find a payment you are happy with. They never drop the price. If you make a decision to buy a car based on payment alone you are going to pay too much.

Instead keep your financing separate from the sale. I would avoid dealer financing altogether. You can get reproved for a car loan through Capital One or E Loan, and they will send you a check to pay for your new car. This way you know how much your payments are up front, and the interest rates are extremely low.

Don’t give back all the money you saved in negotiating a great price by paying too much for financing.