Buying a new car is one of the most significant financial moves we’ll make. And yet research is showing that a huge amount of drivers go into the process totally unprepared, and therefore are not getting the best deals and wasting huge amounts of cash in the process – especially when it’s their first car. The study from a car insurance comparison site showed over 1.6 million drivers making mistakes when applying for new car financing by agreeing to a deal without using their negotiation skills to claim a better price. The sales environment when you buy a car is deliberately designed to provide a subtle pressure to agree to what’s first presented to you. The process can be difficult, hard to understand and cause anxiety in the buyer – and car dealerships are well aware of this when they design their processes and their showrooms. Most buyers don’t feel confident in questioning the information they are given or asking for a better financial deal – and that is a major mistake. So, how do you make sure you’re getting the best deal you can?
Plan Your Purchase Ahead Of Time
One of the worst things you can do is go into a sales showroom without pre-arming yourself with facts and figures. There is so much information out there now that there’s simply no excuse to go in and accept what they tell you at face value. Do your research on the make and model you’re interested in ahead of time – download the guide at Fighting Chance, or visit sites like Parker’s that will give you a rough valuation guide price or either new or used models, and you can find plenty of forums where owners talk about the reality of the fuel consumption or cost of replacement parts as well.
Understand Your Car Financing
Also get familiar with how car financing works. Many dealers will use this to their advantage by offering a fair price on the vehicle, but making a big profit through the APR on a financing deal, so be aware that this is a way they try to make money. Search for some financing options ahead of time. Generally a bank loan or one from a loans company may allow you to access a much better deal, especially if you have a good credit rating. Work out exactly how much you’ll be paying each year with the financing options available, so that you can see if what the salesperson is offering you is really a good deal.
Use Your Negotiation Skills
Once you understand what a fair price looks like, set a budget in your head for what you’re prepared to pay. Never accept the first price offered. Start by asking for a price which is much lower than the one you’re really prepared to pay. Dealers all have wiggle room built into car prices and depending on factors such as the time of year, this can be stretched even further (right before a plate change is generally a good time to get a deal). Keep your options a little open on the exact model – this allows you to focus on the financing and getting the best deal overall sooner than being tied to negotiating on that exact model.