Getting the Best Deal on a Car

Have you ever heard horror stories from people who had bad experiences at car dealerships? This happens because most consumers do not do any research before showing up at the dealership. That is like showing up for a test without looking over the material! Here are some more quick tips when negotiating with a dealership.

Start from the Bottom

What I mean is start from the lowest price possible. The dealership is starting from the highest possible price (MSRP). Your first objective is to establish the "real value" of the car. If it is a used car, then you need to look up the NADA trade in value. This is most likely more than what the dealership gave the the individual who traded the car to them. This will make the dealer justify anything higher than that value. Meaning you will get a lower final sale price.

Keep Your Trade in to Your Self

If you plan on trading in your car to the dealership, it is vital that you negotiate the final price before letting them know you have a trade in. This will keep them honest and make them work to give you the best deal. If you tell them upfront that you have a trade in, they will get the keys from you and take it to get appraised. This is a trick dealerships use to keep you on their lot. Until they give you the car back you are stuck there.

Pre-Approve Finance Before Going to The Dealership

Go to your local credit union and get a pre-approval for financing before going to the dealership. This gives you the flexibility to negotiate the best deal without worrying about if the dealership will finance you or not. Larger dealerships get extra money to charge customers higher interest rates. This is called participation. What happens is a lending institution will tell a dealership that they will finance the customer at X%, but for every 1% above that rate the dealership gets you to accept, they get paid X dollars. If you see a deal claiming 0% interest for 60 months, most of the time you have to buy a brand new vehicle at MSRP. Which means you will end up paying more for the vehicle than if you financed it at a moderate interest rate.

I hope these and my other tips when buying a car find a way to help you get a better deal!