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Tips for Getting a Great Deal at a Car Dealership

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Car DealershipI have been working with a car dealership software company for 6 years.  In that time, I have seen thousands of deals from a dealership’s point of view.  The only difference between making a good deal and a bad deal is what you know before you step onto a car lot.  Here are a few tricks I have figured out to get a great deal on a car if you will be buying from a dealership.

Research

The key to getting the best possible deal is doing the proper research up front.  I’d highly suggest looking into the value of the cars you are interested in, your credit score or report, and what interest rates you can get pre-approved. It sounds obvious but this up front work will help you be prepared whenever you get to the dealership, which can sometimes be an overwhelming experience.

Vehicle Value

If you go to a dealership without knowing what the car you want is actually worth, you have handed the pricing power over to the sales team.  Remember to look up the true values of every kind of car you may be looking at.  I personally use Kelley Blue Book and then search Craigslist to figure out what I’d be willing to pay.  Make sure to bring this price list with you when looking since it is very easy to forget one big number when you are surrounded by a ton of others too.

Credit

No one should be surprised by a negative credit report at a dealership.  You can use Annual Credit Report to check your overall reports and even check your Transunion credit score for free at Credit Karma.  If you know about your credit, it can’t be used as a bad surprise during negotiations.

Loan Pre-Approval

Once you know about your credit, you can go to a local credit union or bank to get pre-approved for a car loan if you will need funding.  Getting pre-approved doesn’t lock you into anything but gives you a place to negotiate from at the dealership.  Dealership usually have access to ten or more lienholders when they work deals, but they will only go out of their way to get you the absolute best deals if they know that you have other options.

The Deal Itself

Once you are in a dealership and have found the car that you want to buy, the trick from that point on is to hold firm with the salesman and the finance and insurance department.  Since you will hopefully know what the car is worth, simply make sure the deal is for that price or less.  Don’t fall for lower payments over longer terms – stick with overall sales total numbers. 

Once that is worked out, you will be handed over to the finance and insurance department to discuss loans and final details.  With the loan rates, explain what you have already been pre-approved for so that the dealership can try to beat that rate.  With the extras, make sure not to buy any extended warranties or dealer add-ons unless you researched them in advance and know you can’t get a better deal elsewhere. 

One thing to keep in mind is that absolutely everything is negotiable.  Extended warranties, interest rates, and add-ons all have a built-in profit margin that you can eat into if you explain what you are willing to pay.  If they can’t beat the rates you found elsewhere, then simply close the deal without any of the extras and buy them cheaper after the fact.

Overall, getting a fair deal on a car isn’t about luck.  Knowledge truly is power and with the internet, you have all the knowledge you need right at your fingertips.  Good luck!

What other tips can you think of for getting a great car deal from a dealership?

(Photo: dhilowitz)

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10 Responses to “Tips for Getting a Great Deal at a Car Dealership”

  1. STRONGside says:

    I have read a really interesting article from Edmunds.com about how you can correspond through email with your car dealership to agree on the best price. You can do all of your research online, email multiple dealers to see which one will give you the best price, then simply walk into the store with your email verification and walk out with a new car. I’ve not tried this, but it sounds painless and stress free!

    • Clare says:

      I’ve recently done this – worked great! Also it gives you the flexibility to go to another dealership with a written offer and ask them to match or beat it.

      truecar.com is a great starting point.

      • David says:

        Myself as well. I would add: be wary of any extras they try to sell you during financing, and double check the paperwork you sign. What you sign is what you get, no matter what else they tell you.

      • David says:

        One more thing: research/Google the car dealership. Even if they offer you a good price or to match one, it may not be worth the few extra dollars.

    • skylog says:

      wow, that is something i never heard of, but it seems like a great idea. one, you can be much more dilligent and you have more time to tackle anything that may come up. i am really going to have to look into this.

  2. jrr says:

    email!

    The best part about buying new is that every dealer has the exact same product. Email several dealers and make them fight each other.

    Other misc tips:
    - Get your financing figured out ahead of time – go to a bank or ideally pay cash. This will deprive the salesman of one of his negotiation tools
    - Spend a lot of time on edmunds and consumer reports to learn about value, reliability, etc

  3. Andrew says:

    Don’t be in a rush to buy a car. research, test drive and research again. Knowledge is power. Knowing how the auto business makes money before you go to the dealership gives you the advantage. Research the price of the car you want using Consumerreports.com car buying service. For $14 you can get a report on what the dealer paid for the car. You can also use TrueCar.com for free.

    Buy this book: Don’t Get Taken Every Time: The Ultimate Guide to Buying or Leasing a Car, in the Showroom or on the Internet by Remar Sutton from an online bookstore. With this book I probably saved $4000 compared to not reading it when I purchased a new car 2 weeks ago.

    Don’t be afraid to walk out of a dealership if they can’t meet your price. I also had to do this when I didn’t call their bluff. It is your money after all and you can use your feet to show them you didn’t want to give them your business.

    Get advance financing from your bank before you go to the dealership. The dealer was practically begging me to get their financing at a lower rate after they yanked the extended warranty requirement for the low interest rate when I wasn’t interested and seemed determined to use my bank.

    Check their figures on the purchase/buyer’s order! Walk with a calculator. They added $100 to the final price and pretended it was a mistake when it was pointed out.

  4. jj says:

    I did the emailing thing (emailed 2 dealers with the car I wanted — it was used so we had narrowed it to the top 2 choices). Both emailed me back and we got the price we wanted. I asked for their best offer to see how low they could go without naming a price myself.

  5. govenar says:

    I used Edmunds to get the invoice price of the car and various options, and also used them to submit a quote request to several dealers. One of them quoted me a reasonable price via email, and when I got there I negotiated a little bit to get the price down to the invoice price.

    One thing that I regret though is not inspecting the car thoroughly enough before signing everything and leaving the dealer. The next day I noticed several scratches/chips in a few places, that I probably could’ve gotten them to fix if I had pointed it out earlier.


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