negotiating car price

negotiating car price

Negotiating Car Price

When bargaining a vehicle’s price, you’ve got two arrows in your quiver: Your opening bid, based on what the dealer paid for the vehicle, and Competing bids from other local dealerships or car-buying websites. The price you finally end up with will likely be somewhere between the two. However, before you go to the dealership, it’s important to do your homework. Check the Consumer Reports car model pages to learn the latest pricing. Dig deeper by using the Consumer Reports Build & Buy Car Buying Service to get competitive prices from local dealers who are held accountable for high customer satisfaction. Build & Buy will also show what a good price is on that specific car in your area. Once you get to the dealership ready to make the transaction, the salesperson will probably begin the discussion about price by focusing on the vehicle’s MSRP or on your monthly payment. He or she may even try to hook you on a “special” price that’s several hundred dollars below the sticker price. But don’t fall for that ploy. Once you allow the conversation to move in that direction, you start playing the dealership’s game. Don’t bite on the question of a monthly payment, either. It’s the first step down a slippery slope of being manipulated with numbers and overpaying for your vehicle. Using the monthly payment as the focus, the salesperson can lump the whole process together, including the price for the new vehicle, the trade-in, and financing, if appropriate. This gives him or her too much latitude to give you a tempting price in one area while more than making up for it in another. Instead, insist on negotiating one thing at a time. Your first priority is to settle on the lowest price you can get on the new vehicle. Only after you’ve locked that in should you begin to discuss a trade-in or financing, if necessary.
negotiating car price 1

Negotiating Car Price

Use TMV pricing to create your negotiating strategy. Pay attention to the trim level and options on the car to make sure you’re making an accurate comparison. If you’re shopping for a new car, look at the TMV price and see where it lies relative to the manufacturer’s suggested retail price (MSRP) and the invoice price. If you’re shopping for a used car, look at the “dealer retail” TMV price. Keep in mind that TMV is an average. Your goal is to get a price below it, but if it is a little higher, that’s OK too.
negotiating car price 2

Negotiating Car Price

Hold Your Ground A salesperson’s initial reaction might be dismissive, stating flatly that there is no way the sales manager will let him sell you the vehicle at your price. He may even try to tell you that your numbers are wrong. If so, simply show him that your figures for the retail price of the car match those on the window sticker—a sure indication that the underlying invoice figures will also match. You should mention that you have talked to other dealerships and gathered prices. But don’t disclose what they are. If you hold your cards close to the vest, you may see how low he will go. Even if he can’t find fault with your numbers, the sales manager may counter your bid with a barrage of objections, pleas, and ploys to get you to raise your offer. Stay calm and wait patiently. You may be asked to wait while the sales­person goes off to make your case to the sales manager. Since the manager wields the real power to approve deals, you can expect this. But make it clear that you don’t have a lot of time to sit around and wait. You also have some wiggle room. After all, the target price you calculated allowed for a dealer profit of about 4 percent over what the dealer paid for the vehicle. If necessary, you can allow your target price to inch up in small increments, but don’t go over the lowest competing bid you’ve gathered. If you do raise your bid, you don’t want to give the impression that you’re simply giving in to pressure. It helps to state a rationale for your flexibility on price by saying, for instance, that you value the fact that his dealership happens to be the one most conveniently located for you, or that you especially like the color of the car he has to sell. Remind the salesperson that you’re ready to complete the purchase on the spot if he can meet your price. Otherwise, you’ll have to “think it over.” They’ll recognize this as a sure sign that if you leave the showroom, you will be on your way to a competitor, and they are more likely to relent. If you see that the salesperson is try­ing to string you along without real progress, you can excuse yourself at any time and get up to leave. What happens next will give you a clue to how low he will go. Often, a salesperson will try to stop you by saying he thinks he or she can “work something out to make you happy.” If they simply let you go, then the last price offered may be close to the dealer’s limit. If the negotiation has stalled at a higher figure than the competitive prices you’ve gathered from dealerships or on the Internet, it may be time to disclose this. Let the salesperson know he or she is not even in the ballpark. This could motivate another visit to the sales manager for a lower price. If you are offered a price that’s in your target range, you could accept it on the spot and save yourself more legwork or get it in writing and move on to another dealership in hopes of getting an even lower figure. Keep in mind that if the price is really close to your target, it’s not likely to go that much lower somewhere else.
negotiating car price 3

Negotiating Car Price

A salesperson’s initial reaction might be dismissive, stating flatly that there is no way the sales manager will let him sell you the vehicle at your price. He may even try to tell you that your numbers are wrong. If so, simply show him that your figures for the retail price of the car match those on the window sticker—a sure indication that the underlying invoice figures will also match. You should mention that you have talked to other dealerships and gathered prices. But don’t disclose what they are. If you hold your cards close to the vest, you may see how low he will go. Even if he can’t find fault with your numbers, the sales manager may counter your bid with a barrage of objections, pleas, and ploys to get you to raise your offer. Stay calm and wait patiently. You may be asked to wait while the sales­person goes off to make your case to the sales manager. Since the manager wields the real power to approve deals, you can expect this. But make it clear that you don’t have a lot of time to sit around and wait. You also have some wiggle room. After all, the target price you calculated allowed for a dealer profit of about 4 percent over what the dealer paid for the vehicle. If necessary, you can allow your target price to inch up in small increments, but don’t go over the lowest competing bid you’ve gathered. If you do raise your bid, you don’t want to give the impression that you’re simply giving in to pressure. It helps to state a rationale for your flexibility on price by saying, for instance, that you value the fact that his dealership happens to be the one most conveniently located for you, or that you especially like the color of the car he has to sell. Remind the salesperson that you’re ready to complete the purchase on the spot if he can meet your price. Otherwise, you’ll have to “think it over.” They’ll recognize this as a sure sign that if you leave the showroom, you will be on your way to a competitor, and they are more likely to relent. If you see that the salesperson is try­ing to string you along without real progress, you can excuse yourself at any time and get up to leave. What happens next will give you a clue to how low he will go. Often, a salesperson will try to stop you by saying he thinks he or she can “work something out to make you happy.” If they simply let you go, then the last price offered may be close to the dealer’s limit. If the negotiation has stalled at a higher figure than the competitive prices you’ve gathered from dealerships or on the Internet, it may be time to disclose this. Let the salesperson know he or she is not even in the ballpark. This could motivate another visit to the sales manager for a lower price. If you are offered a price that’s in your target range, you could accept it on the spot and save yourself more legwork or get it in writing and move on to another dealership in hopes of getting an even lower figure. Keep in mind that if the price is really close to your target, it’s not likely to go that much lower somewhere else.

Negotiating Car Price

Negotiating Car Price
Negotiating Car Price
Negotiating Car Price

Published on May 27, 2017 | Under Car | By michael ellis
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