Getting a car from a dealership
Yesterday, I talked about how much it costs to buy a car, and the difference between buying new and buying used. Today, I want to talk a bit about how to get the best price you can on a car from a dealership. These tactics don’t work as well on a private seller, because there is no commission structure to encourage a sale, but I’ll cover that in another post.
The most important thing to remember about buying a car at a dealership is timing. Nothing substitutes for good timing – both when you go in and a willingness to be patient. Also, it’s important to be flexible – if you want a very popular model of car, don’t expect to get a good deal, because that’s where dealerships really make their money.
My tips for getting a great deal on a car -
- Shop near the end of the month – salesmen need to make their numbers to get to a higher commission tier, and might be willing to take less commission on an individual car if it will get their sales number up.
- Shop the week AFTER a big sale – these are slow times for the dealership, you’re much more likely to get a deal then than when they are very busy
- Be flexible and consider less popular models – a less popular model will sell at a significant discount. Sometimes, there will be less popular options on a specific car that will make it less desirable, thus making it less expensive.
- Buy off-season – shopping for an ‘09 car after the ‘10 cars have come out is a great way to get a discount
- Consider the insurance – some cars are dramatically more expensive to insure than others
- Figure out the TCO, and don’t let the salesman fool you into thinking whatever special offer they are giving you will expire if you walk out the door. It won’t.
- Find something you don’t like about the car, and mention it during the test drive. Even if it’s something nit-picky, like the glove compartment. Make them think they have to sell you.
- Arrange for financing before you go car shopping.
When I was buying my current car, I was looking for a late model (slightly used) coupe. Something that would get me where I needed to go, and was fun to drive. I went into the Toyota dealership with that in mind, but they had a brand new ‘03 Celica for sale (it was April ‘04, the car had been on the lot for almost 8 months). I took it out for a ride and liked it, but didn’t do anything other than make sure I scared the crap out of the saleswoman during the test drive (i.e. make sure you know how the car really drives).
I convinced the saleswoman I was also interested in a few other vehicles, and told her while I liked it, it was more than I wanted to spend. I then told her what the other cars I was looking at were selling for (about 10k less than the Celica sticker). They really wanted to get rid of this car – it was loaded with the sports package, and several deals had fallen through because no one could afford the insurance, so I was in a very strong negotiating position. Long story short, I ended up getting the car for $9000 below sticker (this was $500 below the blue-book value), and they gave me a $1000 for my old clunker, that was probably only worth $500. Not a bad deal.
Before you think I am some sort of brilliant negotiator, I screwed up and accepted their financing, rather than shopping around – that got me a bit, so my total cost for the car ended up being about 5k higher than that. I could have probably saved myself $2000 over the course of the loan had I been a bit more savvy about the financing. Oh well.
The same tactics will work for used cars, but I wouldn’t buy one at a dealership unless it came with some sort of certified pre-owned warranty. If it’s as-is, you’re better off buying from a private party.
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