Driving off the lot in a new car can be an exhilarating adventure. Unfortunately, for many, the process can be a dreaded experience. But it doesn’t have to be. Because most of us aren’t experts in auto buying, we don’t always know how to get the best deal possible. Some of this is due to our discomfort in negotiating. But negotiating is part of the game and can even be fun once you learn how to play. Here are 10 tips for buying a car that will help you feel more comfortable and confident when making your next purchase.
Set a budget
The price range for automobiles veers wildly, even among similar models. Before you even begin your search, figure out what you can afford. Set a price ceiling that you cannot, under any circumstances, exceed. Remember that the vehicle isn’t your only expense. Factor in how much you’ll pay in taxes, dealership costs, delivery fees, and any other hidden costs. You’ll also want to consider the cost of insuring the car. While that Camaro looks nice, your insurance costs dwarf what you would pay for a more practical car.
Search for reputable dealerships using online tools
Since the birth of the internet, car shopping has become much easier. Before you commit to buying a car, based on price alone, research as many dealers as you can. Sure, price is important, but finding a dealer with a solid reputation is equally important. You might also consider trying AutoSMART, Vantage West’s online car shopping tool for easy comparison shopping. After finding a match that best meets your needs, you can get pre-approved for a loan through Vantage West.
Bring along a knowledgeable friend
This one might seem obvious, but we often place too much confidence in our abilities and crack when it comes to negotiation time. As a failsafe, gather a friend (or two) who knows more than you about cars. You can count on them to ask questions that you might overlook and cover your blind spots. Even if you don’t have any car expert friends, you should still bring along a buddy. Having a neutral party on hand ensures that you won’t fall in love with that impractical Mustang you can’t afford.
Take the test drive seriously
You should never commit to buying a car without first trying it out. Sure, the vehicle may be brand new, but that doesn’t mean it meets all your needs or measures up to your preferences. Maybe the car’s handling isn’t what you expected or your knees hug the steering wheel. Whatever the problem might be, you don’t want to find out after you’ve bought the car.
If you do happen to buy a car that ends up having problems, you may be covered under the Arizona Lemon Law. This law specifies that you are covered by the manufacturer’s warranty for two years or 24,000 miles, whichever comes earlier. The Lemon Law period begins on the date of delivery of the vehicle to the consumer. If you do experience problems, be sure to report them to the manufacturer immediately.
Patience is a Virtue
Depending on your needs and wants, you might not always find what you’re looking for on your first try. That’s why you always need to be ready to walk away and try again another day. If the negotiations or general search aren’t going your way, let your salesperson know. If a $200 processing fee puts the deal above your budget, talk to the dealer representative. Chances are they might be able to help you keep the deal in your budget by waiving the charge. But be serious and strong, and remember to stick with your budget and stay true to your needs. It’s hard to walk away, but there are plenty of fish in the sea. Chances are, a different dealer may be able to better meet your budget and minimum requirements.
Don’t get caught up on the sticker price
Each vehicle comes with a Manufacturer’s Suggested Retail Price, or MSRP. Dealerships use the MSRP to set their own prices. But pay close attention to the word “suggested.” This figure doesn’t signify how much the vehicle costs, but rather what the manufacturer suggests it should sell for. That means there’s wiggle room to negotiate. But there’s a better solution…
Dealerships buy or lease vehicles from the manufacturer. Each of these transactions comes with an invoice, stating exactly how much the dealer paid. You can access this price by using Edmunds’ True Market Value tool or other similar online tools. When it comes time to negotiate, try making an offer somewhere between invoice and above the sticker price and see what happens.
Get your own financing (or negotiate the dealer’s)
You may be exhausted by the time you must decide how to finance your car. Normally, the dealer or finance officer proposes a rate and term. But you can try to negotiate. A common misunderstanding is that the dealership can’t negotiate a lower Annual Percentage Rate on your loan, which isn’t true. Dealers work with many financial institutions and will work to find the best rate and term to get you in your vehicle. You can also get pre-approved for a loan through a credit union, such as Vantage West, so you already have an idea of your rate and financing terms before you start shopping.
Carefully select the add-ons you really want
Dealerships offer extras like paint protection, GAP insurance, and extended warranties. Before you agree to or decline the extras, investigate whether you need them. Next, find out if it makes sense to purchase them through the dealer or through a financial institution. For example, you may be able to purchase GAP insurance through Vantage West.
Make educated final negotiations
During the final stages of negotiations, your research serves as your best weapon. First, gather all your pricing quotes and research you’ve done on dealer reputations. Then take the lowest quote to your preferred dealer and ask them to beat it. Sometimes they will and sometimes they won’t. But it is definitely worth a try.
It is also important to keep in mind that different extras and features can impact the price, so don’t forget to take that into consideration when doing your negotiations.
Buying a car can be a bit like poker in that it requires a tremendous amount of strategy and attention to detail.
Remember that you are spending the money, so you’re in charge of what happens. Never hesitate to walk away and try again a different day, if you feel like the deal isn’t right for you.
By going into the process with confidence and a solid plan, you can feel good, knowing you got exactly what you were looking for, at a fair rate and term, and from a dealer who will stand behind their vehicle.Then all you have to do is drive off into the sunset, knowing that you negotiated like a champ.
All loans are subject to approval. Certain restrictions may apply.