Updated: Jul 13, 2021
No this is not a mistake that you are seeing Walt Disney and Mickey. This should be a joyful time and in this next part you will be joyed and excited to buy your next car.
Doing your homework is where money can be saved. There are many free resources to help with your decision. I’ll give you a 4-step process to follow. 1: Decide on one or two cars 2: Look at repair/safety/pricing for each and compare on multiple websites. These are a few which will help you with a starting point.
(https://www.kbb.com) ( https://www.edmunds.com/ ) (https://www.truecar.com)( https://www.autotrader.com) ( https://www.cars.com) Keep this in mind I looked at 2020 Chevrolet Malibu LT and received the following prices, KBB gives you a MSRP $27,495 an invoice price $26,536 and the range is $25,070 - $27,295. All other sites get paid from dealerships and don’t go right to car pricing; they want your information to load up your email. Go to your local sites first and check out the pricing use the guide from KBB to see where they fall. You will see discounts anywhere from 8-10%. The information above is simplistic but good to know. Now we get into the fun part.
The keys to your new car lie ahead.
Never tell them what your budget is. Salespeople will try to lock you in with a price that fits their needs. If you say $400, you will be at $400. After you did your homework on where the manufacturers, dealerships, and so-called best car pricing websites, now is the time to get into the juicy stuff. Please don’t give in to the marketing hype because much of it is smoke and mirrors or switch and bait. The best time to buy a car is when (drum roll) when the dealership has to make a quota. Most times, this happens in the last 3-4 days of the month, when a new model is out or the end of the year. If the dealership has met its goal, there might be another incentive for them. The best negotiation tactic is don’t sit face to face with a salesperson. As we all know you will sit there for a long time and then when you are not happy with the price, they go to their manager. Quite frankly, the salesperson, in my option, is a wasted step; if they can make a decision, send me to the person that can.
Negotiate from the comfort of your home, either by phone or email.
You will always get the right person because if they can’t decide, they will get one for you. It is a phone call, not a waiting game, and wasting your time. Let me give you an example of why this works so well. If you go to 3-4 dealerships and spend 4 hours at each dealership, that is 16 hours, first how much is time worth, and second, that is two full working days. I prefer to make phone calls, and I want that one-on-one because I can hear in their voice enthusiasm and willingness to help. If they are rude and not helpful, hang up and move on. The wonderful thing about this you won’t feel pressured to stay; you don’t have to walk out; just hang up if they are pressuring you. A lot less stress! Just because most people go into a showroom, it does not make it right. Don’t be a sheep and do what the rest of the herd does. Before we make the calls or emails, there are a few things you need to know about pricing; the dealers don’t pay for their cars; they finance them through the manufacture. This is known as floorplan financing. Floorplan financing is a revolving credit line for the dealerships. Every month they pay a finance charge for the amount of inventory they have on the lot. The amount might add up to $300 per car, but if they get a holdback of 3% on $30,000, they will receive $900 when the car is sold. This is why they want to move cars as fast as possible. In this example, if the car was sold after being on the lot for one month, they would receive $900, but then they had to pay a finance fee and left with $600. I’m telling you this not to try and get this money but to show you that it could cost the dealership money the longer a car is sitting on the lot. Some manufactures do not have a holdback, so all the money is made on the car, or the add-ons or dealer cash is used more often by foreign manufacturers and luxury brands because they don’t want to “cheapen” their vehicles by offering discounts to the customer. Dealer cash is one way to discount slower selling cars without the perception that it is on sale. The next point is to lean towards a previous model year. There is always an incentive to get rid of last year's model. This could mean 2-4% off of the lowest price. If we use Malibu as the example and the bottom line on the new model is $19,000, the year-old model might be 3% lower $18,430, a savings of $570; I’ll take that; thank you; very much! Look for incentives from the manufacture’s website. The dealer might not tell you about all of the offers. You have to ask! Do you have a military or first responders discount, a recent college grad or first-time buyer discount, brand loyalty discount, e-price discount, excellent credit discount, bonus cash, rebates? Most people go to dealerships only in their local area. If you go onto the websites that say they will save you money, either they want all of your information and send you to local dealers or give you a list of local dealers. The site will state, “We’ll show you the price you should pay” This is not always the best option. If you fall into this trap, you will pay thousands more than you should. I look at dealers in a 125-mile radius of my home. In google, search “largest Chevrolet inventory 125 miles of me “could be any manufacture. What you see is a map of all the largest dealerships. Now you can do your research and find the best pricing on the net. This is an example of looking for a 2020 Chevrolet Malibu LS. 1: Go to KBB to find pricing MSRP $24,095 Invoice $23,259 Fair Market Range $21,725-$23,672 2: According to a truecar website, the range is $23,300-$24,200 what others are paying. 3: go to local websites; this is what I found in my area MSRP $24,395 sale price $22,645 Most people say wow, $1750 off. 4: Now, I search within a 125-mile radius. This is an example, Koons Chevrolet, White Marsh, MD, is 120 miles from my home. MSRP $24,095 Web price $17,718 $ 6,377 savings off of list. IF you took the best-listed price, you are still saving $4,927. I would drive 120 miles to save $4,927. Better yet, how about they deliver the car to you, so you don’t have to drive at all. This dealer has done this for me twice. When dealing online, you see the real window sticker to ensure you receive what is listed on the site; this will also give you the VIN number. Don’t worry about buying a car in a different state; you will pay the tax on the car where you live, and the dealership will do the paperwork for you. You will be notified when to get your plates.When the car is sold in a different state, there will be that state's license plate on the vehicle; you will have to get a plate for your state. You can take the car to any dealership of the brand you bought it from; you never have to go back to where you bought it. You may ask, how do these dealerships make money? It is simple volume; when selling thousands of vehicles, they are on the A list of the manufacturers and receive many dealer incentives and bonuses for selling so many. Let me clarify this is just a sample. Type of car, equipment, year, how popular are all factors that go into pricing the car. It is all about supply and demand.