How to Negotiate the Best Deal When Buying a Car
There are two types of car buyers in the world -- those who pay the entire price for a car and those who don't. And while we commend the generosity of those who pay for a car’s full price (car dealers really love them), nothing makes us happier than to see huge price digits go down when you pay for your ideal car.
Car of your dreams? Check. Huge savings? Check. Are both possible? Of course. And we're here to help you negotiate the best deal when buying a car.
Before the car deal negotiation
Let's start by saying that negotiation doesn't start when you're already inside the car dealership. It actually starts when you do your research. Preparation is the key here. And we can never emphasize enough how important it is to learn all related information about your chosen model before you negotiate with car dealers.
Not only will this help you determine your exact limits when you pay for the car, but it will also show the salesperson that you know what you’re doing.
How to negotiate the best car deal
Before you do your research, check yourself first. Make sure you're really clear about what kind of car you really want. Ask yourself these questions: Why do you want to buy a car in the first place?
- How do you plan to use it?
- Where are you going to store it?
- When do you plan to use it?
- How are you going to maintain it?
- What's your budget?
- How are you going to pay for it? Cash? Financing? Or both?
- Which car brand do you prefer? Which model?
- What exact trim, style, body structure, and color do you like?
- Which car features and specs are important for you?
These are just some of the questions you need to ask yourself before you start doing your research. Once you've answered that, check out some of the available models of your preferred car brand.
Do a test drive to see if they match up to your choices. Once you determine which car to buy, then you can start doing your research.
The research process
There are many ways to get the information you need, so researching for your car won’t be hard. The most important one you need to know is price, since your goal is to negotiate a deal.
Keep in mind that a car’s price also extends to additional expenses, such as taxes, charges, fees, and levies (and more), so don’t neglect them in your research.
There’s strength in numbers when choosing your options, so we recommend you get price quotes of your chosen car from at least seven dealers. As much as possible, try to get seven different prices for the same car as well. Don’t stop until you reach that number.
You can get your information by calling each and every rival dealerships for their price quotes. However, this can be time-consuming, so it might not work for you if you’re in a hurry to buy a car.
Another easier and more convenient option is to visit sites like Carmudi Philippines, which lists car prices for all new and used car models in the Philippines today.
Other great sites you can visit are car reviews. Not only do they show a list of car prices, but they also offer valuable information that can help you know more about the car of your choice.
Some of the most reliable sites we recommend are Edmunds, Kelly Blue Book, and the NADA guide. And if you want car reviews closer to home, try Carmudi Philippines’ car review section.
Getting the best car deal
Getting the best deal starts with knowing how much you want to pay for a vehicle. You already have an idea about the different prices of the car you want to buy, so it’s time to think which price you’re willing to go for.
Before you start, check out the car’s model. Usually, the new ones have little room for huge price deductions. However, cars that are two years old (or older) are much cheaper and have more leeway for price reductions. This should give you an idea about how low you can get when you make your offer.
Also remember that the invoice price is not the actual dealer cost. Generally, your offer should be 3% to 5% over the actual dealer's cost, and not the invoice price.
You can also use email to get the best deal. In a sense, you’re going to ask car dealers to bid for the lowest price. What you do is send an email to all car dealers that carry your model. Then do the following:
- Write in your email your selected car model. Mention that you've test driven it at your local car dealer.
- Tell them that you are ready to buy this car and want to have it delivered to you by a certain date.
- Include the options you want to have for the car.
- Also include special promotions / discounts you've found during your research.
- Include how you want to pay, and if it's through financing through the seller, write down your preferred payment option.
- Mention that you are aware of all the costs related to the options and invoice of your chosen car model, and that you are also getting price quotes from different dealers to get the best possible deal for the car.
- If you want, tell them that you are willing to do a credit card deposit via phone just to secure the deal.
Make sure to give your car dealers 24 hours to respond to your offer. You can also send this email to all dealerships except your local dealer (better if they're also the ones where you did your test drives). Once you have all your price quotes, then you can choose the lowest price you get.
Other tips to help you snag the best car deal
- You can get the best deal on a new or used car by looking for promotions, car financing deals, free first year insurances or sales events going at certain car dealerships and online car sellers like Carmudi. Often, these promotions involve cash back or a limited 0% financing period when you purchase a certain model.
- Carry yourself with confidence when you want to buy a new car at a dealership. This gives you added leverage once you negotiate over the price.
- Go into the dealership with a mindset that you'll walk out without a car. Now, this may sound negative, but it actually frees you mentally and emotionally from all pre-conceived expectations. Once your mind is free, you're more relaxed and confident, which puts you on top of your game.
- Don't stay too long. Complete the negotiation process in less than 30 minutes, tops.
- Stay firm. Prepare to walk away when they can’t match your offer.
- Oftentimes, a salesperson's first reaction when you give your price is dismissive. They can flatly state that there's no way their manager will approve of your figures. And they can even bombard you with unverifiable facts to change your mind. When this happens, politely show your computation and your research.
- You can mention to car salesmen that you have talked to other car dealers, and they've also given their price offers. However, don't disclose these figures (you never know when they might give you a much lower price).
- Still, they might counter you with a barrage of objections to entice you to raise your offer. Keep calm and just wait.