The Car Buying Process

There are common auto sales tactics that consumers may want to be aware of in order to negotiate the best price when buying a new car.  The higher the purchase price that you pay, the more the dealership makes on the sales commission.

The primary goal of a salesman is to get you to buy a car as soon as possible for the highest price that you will agree to.

When you purchase a new car, these are the four topics you will be discussing at the negotiations table.

• The new vehicle sticker price
• The trade in value of your car
• The amount of your down payment
• The monthly payment
• The Interest rate (if you have dealership financing)

The car industry is currently a market that is in favor of buyers, but don’t let that take you off guard, even with all the incentives and guaranteed financing programs, you still need to be aware of common sales tactics that may be utilized which are not in your favor.  For example most people are not aware that when they finance on the lot, the dealership, (and sometimes the salesman) makes a percentage of the interest rate that you are charged.  The higher the interest you pay, the more the dealership makes.  That is one reason it is advisable to get your financing arranged beforehand.  It takes one element out of the negotiations.

Here is an example of how the total price conciliation may be negotiated from the dealers’ perspective.    If you are intent on getting a certain amount for a monthly payment, the salesman may focus on inflating your down payment or offering less for your trade in so that the bottom line numbers are more in the dealerships’ favor.

Even though the dealer gives you an offer that he says is the bottom price, stick to your guns, you should have a budget in advance and be firm, if you cannot negotiate your price with a specific dealer, go to the competition and see if they will deal with you to give you the price you need

Make sure that you do extended online research to find all dealer rebates and discounts available. Dealerships will NOT automatically place this information on the negotiating table, it’s up to you to find out, factory incentives can be up to $6,000 so it’s well worth the time it takes to do the research.

There are many internet sites like Edmunds.com  and USAA’s Car Buying Service where you can educate yourself online so that you are able to walk into a dealership armed with information that will give you the upper hand to get the best deal possible.