Car Buying Tips: 4 Secrets to Effective Haggling
Filipinos love to haggle, it's practically a way of life. Accompanying your lola to the local wet market as a child, you've probably seen her relish every centavo she can save when she goes there to buy food over the weekend. But while haggling with your favorite butcher or fruit vendor can be easy, bargaining with a trained and experienced car salesman is another story.
If you're like most people, your salary probably stays the same every time you replace that calendar posted at the back of your door. But car prices increase every year, and so when it comes to buying a car, you need to channel your lola and be a savvy consumer. Of course, you're not going to transform into a super-negotiator overnight, but by being effective at haggling, you can potentially shave off up to five digits on your next car purchase.
Know what to pay
Remember that you are dealing with someone equipped with a wide array of tools and tricks to ensure maximum profits, and unless you have the experience to match, you are already at a disadvantage before you even take you seat on the negotiating table. Thus, it's imperative that you know the current market value of the car you want to buy. Also look outside of the price tag, such as the incentives you might qualify for--customer cash back from your credit card provider, low-interest car financing from your bank, etc.--or if the dealer accepts trade-in, it also helps if you know the trade-in value of your current car.
Researching the key numbers empowers you in negotiations. If you keep an acceptable price in mind on how much you're willing to spend, you'll be less likely to succumb to pressure, because you'll be relying on actual numbers than opinion or emotion to establish car value.
Negotiation can only work for you when you have leverage, and the best way to get that, is to convince the car salesperson that you have the money to buy the car then and there. Show him a copy of your pre-approved loan agreement. Let him have a peek at your extensive collection of credit cards as you fumble for an ID. Or be brash and just put down an envelope full of cash on the table while talking to him. Either way, he'll recognize you as a serious buyer, and that opens the door for negotiations to happen.
You can also use previous buyers as a negotiating tool. Tell him about your neighbor who got a great deal on the car you're looking at two months ago (it helps if this is actually true, but bluffing your way through it can also work, although bluffing is another talent you'll need to master altogether).
Time your visit
Like most people in sales, car salespeople have targets that they need to hit. This means that if you buy a car at the end of their sales period (end of month, quarter, or year), you might get a great deal if they're desperate to hit their goals. Keep in mind that this tactic will only work if they haven't already hit their goals though.
Visit more than one dealership
You might think that all dealerships are the same, and you'd be wrong. If you really want to find the best deal out there, you need to visit more than one dealership. Why should you do this? First of all, some dealerships sell only specific models, which limits your choices. Second, it allows you to do comparison shopping. Sure, you can do everything practically online these days, but that robs you of real-time salesperson decisions that sway the negotiations to your favor. So make a list of dealerships, and make sure to pay each one a visit.
Always remember that you work hard for your money, which you gives you the responsibility--nay, the right--to negotiate the price a new or used car. Use the tips above to harness that power skillfully.