Dealers (2024)

FAQs

What not to say to dealers? ›

Explain that you're looking for the lowest markup over your bottom price. As an alternative, ask if the salesperson is willing to beat a price you got from a legitimate buying service. If so, tell her what it is, or better yet, show her a printout. Try not to be argumentative.

Counter the monthly payment conversation: Your dealer may ask what you're hoping to pay for your car each month. Instead, tell your salesperson that you'd prefer discussing the car's out-the-door price and fair market value. If need be, you can always discuss refinancing your car loan down the road.

Paying for a car with cash can sometimes give you the upper hand in a negotiation, but it isn't always the case. If a dealer knows you're paying in cash, they might decide to charge you more. Some dealers would rather have you finance the car so they can make commission profits on the loan.

Paying cash may hinder your chances of getting the best deal

"When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains. "So if you tell them up front you're paying cash, the dealer knows he has no opportunity to make money off you from financing.

Despite the MSRP sticker price of a car, you can make any offer, and a good salesperson should be willing to consider a reasonable price based on the car's condition. If the car you want has been on the lot for several weeks, use the fact that it isn't moving to bring the price down.

The main difference will be how much you can negotiate off the retail price: New cars. It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.

Point that out, and be clear and direct. This is not the time to beat around the bush. It might even have a declination box where you can sign that you reject the product offered. Remember, you can get most dealer add-ons for hundreds of dollars less elsewhere.

Significance of Understanding Dealership Margins

How much do dealerships make on new cars? Car dealerships average a net profit margin of 1-2% per car. That means that for every $20,000 in sales, the average dealership makes $200-$400 in profit.

Say this: “I'm willing to pay a fair price for the car I want.” Not that: “I know how much I can afford to pay per month.” If you've researched average prices in your market, and you understand dealers and salespeople need to make some profit, you should be able to negotiate quickly.

How to be taken seriously at a car dealership? ›

Just be sure to stick to your guns. Always have a top price in mind that you are willing to pay and never go above it. And use the fact that you're willing to act quickly on a purchase as leverage with the sales staff. This is one of the best ways to get the deal you want on a vehicle—new or used.

When negotiating, it helps to be able to justify what you're asking for, he adds: "Instead of saying, 'I want to pay this,' try something like: 'I've looked at five or six different cars that are similar to yours in the market. The price range goes from $19,500 to $20,700. I'm comfortable making an offer of $19,100. '"

What Are the Disadvantages of a Large Down Payment? Providing more money down doesn't guarantee a lower interest rate, and it can cut into your savings.

You'll have less cash on hand: After purchasing a vehicle, you might not have enough to cover emergencies. You may have a limited selection: If you stick to your cash budget, some models will likely be out of your price range.

Dealerships don't want you to pay cash because they don't earn a commission on arranging financing.

First, it lets them know you have to buy a car soon, so they don't have to worry about you taking extra time to shop around and visit other dealerships. Second, it leaves room for the dealer to lowball you on the value of your trade. They can justify their price with the information you just gave them.

If you want to beat car dealerships at their own game, you need to first understand the true market value of what you're buying and trading in. You should also get quotes via phone or email before you physically go into the dealership, and then skip all the extras they'll push you to buy.