Mastering the Art of Negotiating With a Car Dealer

Buying a car, whether it’s your first or your fifth, is an exhilarating time filled with anticipation and personal pride. However, the complex world of car buying can also prove to be intimidating. The heart of this journey is the negotiation with the car dealer – a process that many fear.

So, how can you troubleshoot the negotiation process, achieve the best deal, and walk out of the dealership fulfilled? Here’s your detailed guide on mastering the art of negotiating with a car dealer.

Understand the Basics

The first step in your car-buying journey involves doing your homework. Investigate the possible options and learn about their market prices. Websites like Edmunds and Kelley Blue Book offer comprehensive, objective, and up-to-date information about vehicles and their pricing.

You should also familiarize yourself with terms such as MSRP (Manufacturer’s Suggested Retail Price), dealer invoice (the cost the dealer paid to own the vehicle), and incentives (manufacturer-to-dealer offers). These elements make up the negotiation baseline.

Pre Determine your Budget

Ensure you’ve calculated the amount you’re prepared to spend purchasing a new car before stepping foot in the dealership. Include additional costs like taxes, registration, insurance, and any extras like extended warranties or accessories.

Having a predetermined budget helps steer negotiations toward your preferred outcome and also deters you from overspending.

Secure Financing

Dealers make a significant percentage of their profits from financing deals. As such, getting a pre-approved car loan in Nova Scotia from a bank or credit union places you in a stronger negotiating position and may afford you lower interest rates compared to dealer financing.

Timing is Everything

While this may surprise you, the day or time of year you choose to buy your car can vastly affect the price. The end of the year, the month, or even the day, are prime times to negotiate as dealerships rush to meet their volume targets.

Don’t be Afraid to Walk Away

Any effective negotiation carries an underlying power of walking away. If the dealer isn’t willing to meet your terms, don’t feel compelled to make a deal. There are plenty of other car dealerships out there, and walking away can sometimes lead to the dealer changing their tune.

Negotiate Each Part of the Deal Separately

Beware of the dealer’s classic ‘four-square method.’ The dealer will often try to amalgamate the trade-in, purchase price, down payment, and the monthly payment into one transaction – making it challenging to identify if you’re getting a good deal.

Therefore, break down the negotiation into these four parts. Negotiate the price of the new car first, then the trade-in value, followed by the down payment and finally, the monthly payment.

Be Prepared to Play the Long Game

Patience is key. Dealers are seasoned negotiators, and they expect customers to be in a hurry to finalize the deal. The longer you’re willing to sit and negotiate, the more likely the dealer will be to lower their prices to close the sale. Don’t forget to use any negative features of the car like warning lights to your advantage during negotiation.

Be Professional

Maintaining a professional and polite demeanour throughout the negotiation can play a part in the outcome. Dealers will be more willing to negotiate with individuals who display respect and understanding during the process.

Be Resolute

Stay focused on your goal and be ready to ask for what you want multiple times. Dealers can be skilled at deflecting negotiation attempts and instead, drawing your attention to car features and benefits. Stick to your talking points, and don’t move to finalize the deal until you’ve successfully negotiated all points.

In conclusion, negotiating with a car dealer may seem daunting initially, but with the right preparation, understanding, and mindset, it can be a very rewarding experience. Remember to remain patient, walk away if needed, and above all, enjoy the journey of buying your new vehicle. Extreme preparation today might reward you with a dealer waving the white flag tomorrow, surrendering to your well-played negotiation. Happy car shopping!