I do not advocate for buying new cars all the time when the goal is to retire by 40. The goal is to purchase 1 reliable car that you’ll pay off as soon as possible and use for at least 15 years. Ideally, you should have a sufficient down payment and be able to pay off the car in less than 5 years.
I bought my first car when I was 23. With 2 years out of college, I was about to start my MBA and needed a car to get to class. Through this, I want to share my experience and things that I did to get the best price and some additional perks that people didn’t know they could negotiate for when buying a new car.
Let’s get started! You’ve done some research; you know what car you want; and you know what others have paid for this car. Time to head into your local car dealer and work your confidence with the salesman.
Steps on negotiating the price
1. The Pre-Work in Surrounding Areas
Part of your research should have been calling every dealer in not just your area, but in other accessible cities. For example, there are many flights from San Francisco to Los Angeles, San Diego, Reno, and Las Vegas. You can talk to those dealerships and find out of how they’re selling for just to see if buying that plane ticket and driving back is cheaper than buying from your area.
2. Get Friendly
Time to put your friendliest face on! No one likes an asshole regardless if you’re buy or he’s selling. Just be nice and smile a lot. It’ll get you further with negotiations.
This sucks the most, but you should never purchase your car the first time you walk into the dealership. You should be learning about their cars, test driving, and talking prices. You should also be talking about what else the dealership can offer. Remember, you can negotiate ANYTHING.
4. Know When to Walk Out
You’ve been at the dealership for a few hours now and the sales guy has talked to you about everything he could possibly talk about. Time to walk out with appreciation. This is very critical, because you’ve established a bond with this guy. He knows where you stand, but you should go home and think about all the different options. Also, make sure you have his contact info as this will be critical to your success. It is highly recommended to bring someone you trust and isn’t invested in the car. Therefore, they know to give you a sign to leave.
5. Research your Options
I’m not talking about other dealerships per se; however, you can talk to other dealerships and tell them what your current dealership is offering to see if they’re willing to not only match, but also offer more. That’s right. They can either bring down the price even more or offer additional services such as free oil changes for X amount of times or free maintenance up to certain years. While some car manufactures do offer standard maintenance package such as BMW, you can also ask for additional years.
Here are some options you can negotiate are:
- Free rental cars every time you get service
- Discounts for parts
- Interest rate (thought it’s better to go through a credit union for the best rates on financing unless the dealership can do a 0% interest rate)
- Additional set of keys for free
- Any upgrades for free (stereo, screen, car seat warmers, GPS, etc…)
- Additional discount for paying in cash
- Extended warranty
- Accessories (windshield wipers, car washes, lifetime supply of fresheners, and etc…)
- Oil changes
- Weather mats
- Window tint
Remember everything you can think of is negotiable. This is the time to do your homework, because your sales guy will email, call, and/or text you. You want to know exactly what you need and see if he can work with you.
6. Time to Make the Kill–Gracefully
A few weeks have gone by. You’re armed with offers from other dealerships and you know what price you’re willing to pay with the items that you need. You should also have a few different alternatives (i.e. a slightly higher prices but with x upgrades/# of oil changes) in case your original plan doesn’t work.
Now, you’re at the dealership ready to finally make this purchase. This is the time to achieve a win-win situation. Wait, what? Win-win? But you’re only there for a car. Well, yes, but you also have to remember that every negotiation needs to result in a win-win situation. This means that you’ll flatter him as much as you truthfully can. You should thank him for being patient with you and that he’s been doing such an amazing job educating you. Afterwards, you drop the “win-win” situation–you will tell him that you’ll recommend him to all your friends, family, co-workers, and/or whoever possible. Grab a couple of business cards and store it in a safe place.
Why? He wants to make a sale, but you want a cheap car with perks. Well, negotiation also involves building a relationships in some way, so make sure he’s getting what he needs. For him, that is word of mouth on your behalf. So offering him to “sell” on his behalf will make sure he’ll do his absolute best to get you everything you need.
As you Leave…
Remember to thank the guy and reassure him that you’ll be back either for a new car or with other potential clients. Now, whether you truly mean this or not, you at least got what you wanted and he sales guy feels good about all that’s he done for you.
Lastly, even if you don’t plan to recommend him, the least you should do is take his survey if he requests it.
Bottom Line: Buying a car takes a lot of time, but with the right research and patience, you’ll learn a lot in this experience that will carry you through life and not in just car buying.