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Step 5) Negotiation and Delivery of the Vehicle
Alright, you have made your choice and you are ready to buy. Before you negotiate, get financing lined up by having yourself pre-approved for the approximate retail amount of the car, minus any cash down payment you have. Do not treat your potential trade in as cash, that part needs to be a separate transaction. It is better to over estimate the amount of loan you need than to come up short because you did not get as much back on your trade in as you thought. The dealer may offer you special financing or lease options but you need to make sure than none of that comes up until you have worked out a price first.
Make your appointment; take a pad with you and a calculator. The dealer’s goal is going to be to start from sticker price and work down by small increments and wearing you out through attrition. Do not play that game. Instead go to Edmonds, get the invoice price of the exact trim and model. Make sure you add all the appropriate options, and then check for something called “Hold Back” for that car. Hold Back is additional subsidy from the manufacturer for moving certain cars quickly; the hold back can be as much as $1000.00.
Once you have the info, then you can take control of the process. If the car has hold back the dealer can go below invoice for you (with this recession almost every volume car has at least some hold back money) I would take the invoice minus ½ of the hold back money, then multiply by the percentage of state tax.
Allow them 30-40 dollars to process the title work (any more than that and you are actually being ripped off) Pay for NOTHING ELSE. If there is not holdback offer invoice plus $250.00 dollars then factor in taxes and tags. Once you add everything up that will be your offer. Write it down on a piece of paper and underneath the number in large letters write the words “TURN KEY!”
Hand it to the sales person and say,
“I am not going to negotiate with you.”
“I have already been approved for a loan and I have the ability to bring you a check in full for this car later today or tomorrow morning. On this paper I have written what I am willing to pay for this car including fees for taxes and documentation. I will not pay for undercoating, seat protectant or paint sealant. These things were done at the factory where the car was built and are unnecessary to repeat here. If you can not sell me the car with out charging me for these things, then I want to order a car that does not have them. This figure will allow based on my research will allow your dealership profit. Now ALL I want to hear is either nay or yay on my offer. If you are not authorized to approve this offer, go to your manager and ask him. Do not try a counter-offer, if you do, I am going to walk out of here and you will have lost my business. If you tell me no, thank you for your time, and I will find someone who wants my money more than you do. Again anything other than yes or no and I am leaving. If you go to your manger I will give you ten minutes.”
The trick is to be serious without sounding pensive. No need for a display of anger, just say the above with a firm business type demeanor. Be prepared to leave if he does not comply with the request. Odds are that if that happens they will call you the next day and concede, if not find another dealer who will come to your terms. This method saves a lot of time and prevents an unnecessary back and forth negotiations at which you may lose.
***There are a couple of caveats, if you are negotiating on a car with a very high demand to supply ratio (The new Chevy Camaro is a good example) You will not be able to do what I have described above and you are at the dealer's mercy.if that is the case, It would be best to wait until demand for the car cools down before trying to buy. Also Saturn dealers are company-owned and will not negotiate at all. If you buy a Saturn car, you will have to pay sitcker price. It has been a long running element of their customer service to give everyone equal treatment.***
IF you are trading in a car, do not discuss the allowance for your trade until you have secured in writing an okay to your offer above. Then talk about your trade. You can look up the value of your trade on line at Kelly Blue Book and NADA.com. At there very least you should get average wholesale or above for your car. If it is part of the C4C Federal program you could be given an automatic allowance of up to $4500 for it depending on its qualifications.
Once the salesperson has come to terms with you he will have you speak with the F&I person (finance and Insurance) be VERY careful, this is usually the best salesperson in the dealership and they make a lot of money persuading you to buy things you do not need. Extended warranties are almost always a bad idea. Unless you are buying a car with a low reliability record and plan to keep it a long time. Usually most new cars over the long run will cost you less to repair out of pocket than to pay a lot for a warranty you may never use. It is same way with A&D insurance and life insurance. Do not buy either from him/her, it is not worth it.
Once you have made an agreement, honor it. Do not shop any further. Be prepared to take delivery. Congratulations you have a new car!
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