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NEGOTIATING THE BEST PRICE ON YOUR NEXT VEHICLE
Shopping for a new or used car can be really frustrating and stressful for most people. I know it is for me!
How do you negotiate the best deal on your new or used car without pulling your hair out?
The good news is that car buying is a lot easier than it used to be. I have had a few cars over the years and the last one I bought only had me at the dealership twice and it was quick and easy for the most part compared to past experiences.
You don’t have to spend the whole day at the dealership only to end up leaving with nothing or paying too much. A lot of prices are now “no haggle” so you know what you will pay upfront.
This doesn’t mean you don’t try to negotiate a no-haggle pric but usually, they hold firm on price but can add in some “extra incentives” or remove other fees associated with buying the vehicle.
Today, with just a few clicks you can pretty much have more than enough information at your fingertips and tons of cars to look at before stepping foot in a car lot.
Don’t get me wrong car dealerships will still use some tricks to get you to their car lot but if you’re prepared than it won’t be an issue.
FRUGAL TIP: There are many car dealerships that now offer free gift cards or incentives for test drives so make sure you take advantage of those. I was able to get a $25 gift card for one car I test drove. Do your research ahead of time.
But where do you start and how do you get the best deal on a new or used car?
Here are some tips!
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GETTING THE BEST VEHICLE PRICE
1. Do your Research First!
Start your vehicle shopping online. With websites like CarGurus.com, you can pretty much do all your research ahead of time.
There are many more sites out there so you can look around but I like CarGurus because they rate the price of the car and its price history, they show you a vehicle history report (you want to see if the car was ever in an accident) and the site allows you to search for cars at many dealerships all in one place.
Consumer Reports is also a great place to get information about how inexpensively you can get a vehicle and what price to shoot for when negotiating.
Use these sites as a guide when starting your shopping. Save yourself time, frustration, and gas by doing most of your browsing online.
2. Don’t be Afraid to Walk Away
Don’t be afraid to walk away and go someplace else if the car dealer or private seller won’t meet the price that you’ve researched.
I’ve walked away a few times after getting to a dealership only to find out the car they listed online was suddenly “sold” and now they want me to buy another vehicle that is thousands more. Or that the internet price was “after down payment”.
Often times if they have your contact info they may call you with a deal if the car doesn’t sell or they need to move inventory.
You want to beware of shady practices and take your time. If researching a car online, contact the dealership before arriving to verify the car is there and that it’s the price it was marked online.
This will save you from wasting your time driving to the dealership and not getting what you want.
3. Know Your Credit Score and Negotiate the Best Rates
If you’re going to finance a car make sure you know ahead of time what your credit score is. You can get a free credit score from Credit Karma or Credit Sesame and most credit cards and banks now offer free credit scores to their customers.
When I financed one of my cars in the past I was given a not so nice interest rate. I knew my credit score was really good so I mentioned it to the loan officer and all of a sudden he was able to give me a lower rate.
Strange how that happens just by asking!
You can also check your local credit union or bank for financing. You want to get the lowest rate possible and put as much down as you can.
Getting the best interest rate is really important! What’t the point of getting a good deal if you’re paying a ton of interest?
My advice would be to shop around for the best interest rate and save up as much as you can to put down.
4. Beware of Extended Warranties
Car dealerships make a lot of money off of extended warranties and will push them hard.
According to a study from Consumer Reports a few years ago, “55 percent of owners who purchased an extended warranty hadn’t used it for repairs during the lifetime of the policy, even though the median price paid for the coverage was just over $1,200. And, on average, those who did use it spent hundreds more for the coverage than they saved in repair costs.”
I am in the 55%.
I personally would have been better off putting that money away in a high-interest savings account and saving it for a car emergency. The benefit of this is if nothing ever happens you can use that money toward your next car versus having rolled the cost of a warranty into a loan and never having used it.
If you really want the peace of mind of a warranty, research buying it directly from the manufacturer and not a third party. It’s usually cheaper and a much better warranty.
Also when you’re researching cars look at their track records. Some cars are really reliable and some cars are not. While it isn’t full proof and there are always exceptions, it’s a good way to decide on a whether to buy or not.
Ok, Let’s recap!
- Always do your research first and be knowledgeable before you step into the dealership.
- Don’t be afraid to walk away!
- Know your credit score and get the best interest rate you can because that’s extra money you’re spending on interest!
- Decide whether you want a warranty and research it from the manufacturer instead of a third party.
Not so bad right? I hope this makes your next car buying experience a little easier! If you have tips you want to share, leave them in the comments I would love to read them!