A car is a big investment, which suggests you should invest a lot of time into seeking the best price. After all, the cost of a given model will vary from dealership to dealership, and most sales associates are going to try to upsell you. So, you should never walk onto a car lot without doing your research beforehand — and these tips for getting the best price on a new car can help.
Choose Your Model
The quickest way to get pulled into overpaying is by allowing a salesperson to choose your vehicle for you. Instead, take time to search online for the exact make and model that fits your lifestyle and budget. You can also look into the relative demand for any particular car. If demand is low, you’re more likely to find a good deal.
Once you know which exact car you want, look for the going cost. A good place to find the average price a particular model is selling for is by going to the automaker’s own website. You can also rely on Kelley Blue Book to find the fair market value of any given car.
Shop Around (and Work the Phones)
All of the car dealerships in your region are in competition with one another. Lean into that. Take some time to contact multiple dealers in your area to learn which one offers the best price and how low each dealership is willing to go.
Additionally, it’s best to take this step over the phone, as opposed to showing up to several dealerships in person. Not only will you save time, you also retain more negotiating leverage. It is much easier for a suave salesperson to cajole you into a sub-par deal if you’re sitting in his/her office. All those free donuts and complimentary bottled water aren’t just there for fun—they’re meant to manipulate you into letting your down guard. By initiating the phone call yourself, you can keep the ball in your court and keep the conversation brief.
Secure Financing Before Showing Up
Most dealerships will try to assist you on the financing — but car dealers will often offer you an auto loan that makes them the most money, not one that helps you save. Instead, secure a loan through a bank or credit union, and do it before you arrive at the dealership. That way, you’ll only have to negotiate the price of the car, not the financing plan as well.
Furthermore, by already know the best financing deal, you can use that knowledge when negotiating with the car dealer. He or she might feel tempted to offer you an even better auto loan than the one you’ve already secured.
Alternatively, Pay in Cash
Unless you can find a zero-interest loan (and they do exist), you’ll probably end up paying interest on your auto loan, which will inflate the cost of your already expensive purchase. But if you have the patience and discipline, you can save by buying a car outright. Additionally, some dealerships offer discounts for cash payments, which means you could save money at signing.
Don’t Underestimate a Used Vehicle
We’re focusing on new cars here, but if you’ve done the research and it doesn’t look like you can swing it, then one way to save big is by opting for a pre-owned car. You should still follow all the steps suggested above to get a fair price on a particular used model, but many pre-owned cars are almost as good as new, with little mileage or visible wear. Just prepare to be patient as you seek your perfect match.
On the flip side, if you already own a car and are looking to replace it, ask about trade-in options. That’s another negotiation. At the same time, you’re establishing the best deal for the new car, you’re trying to establish the best deal for your old vehicle. It’s a balancing act for both sides of the negotiation.