How to Get the Best Deal From a Car Dealership

How to get the best deal from a car dealer

Before you buy your next vehicle, learn how to get the best deal on a new car at a dealership. It isn’t especially hard to get a great price when you know your budget, do your research, and go into the purchase with an exact idea of what you want.

Preparing for the purchase will help you when you’re working with the dealership, and there are several ways you can approach saving money on a new car. Here are some of the best ways you can make your budget stretch further next time you buy a new car in Phoenix or anywhere else.

Consider the Timing

The best time to buy a new car is whenever you need it. Sometimes you just can’t wait. Otherwise, though, it’s possible to save money when you wait until the dealership or manufacturer is offering great deals and incentives.

The dealership may be willing to work with you more at the end of a month or the end of a year, especially if they’re running a little bit behind when it comes to their sales quotas.

Some might say the end of a model year is even more important than the end of a calendar year if you’re trying to find out how to buy a new car for the lowest price.

When a new model year comes out and the vehicles become available, a dealership has to make room. That may mean that they’re willing to sell cars from the previous model year for less. As soon as a new model of the car you like comes out, see what you can do to get one of last year’s vehicles off the lot.

Finally, some dealerships have awesome deals around the holidays. Dealerships often have multiple sales events throughout the year, and you can normally get a great deal on a new car at one of these times.

Offers may include generous new car financing, reduced prices, and more. These deals aren’t always centered around specific national holidays, but they often are.

 

Negotiate With the Dealership

How to negotiate a car dealUnless you have a lot of business experience, negotiating can seem stressful. It doesn’t have to be that way, though, especially if you work with a reputable car dealership that doesn’t use high-pressure sales techniques.

If you do your research in advance and have a clear understanding of what you want, it will come naturally. Remember that a good car salesman should be working with you, not against you.

If the idea of negotiating makes you feel stressed, you might want to start by getting quotes or offers from multiple different dealerships. Once you do that, it will start to feel like the dealers are negotiating with each other instead of with you.

You’ll feel like there’s a bidding war for your business, which will help you relax and feel like you’re in a position of power. You can get multiple offers as the counter offers come in, and you may even be able to do this step online or on the phone to save time driving between dealerships.

It’s also important to focus on your total, “out the door” price. In other words, make sure the number you’re discussing with the car dealer includes things like taxes, registration fees, and dealer fees.

You don’t want to get a deal just within your budget only to find out that you now have to pay more to get the keys and go home. If a dealer is talking about “money off MSRP,” be aware that MSRP doesn’t include all of the fees. Simply put, always be explicit that you want the “out the door” price.

Discuss Financing After Finding a Price

Car specialsWhile you do want to lump every aspect of the price together to get the total dollar amount, it’s not a good idea to discuss the APR at the same time. Only start discussing financing after you agree on a price. Once you’re discussing financing, it’s also critical to keep in mind that a lower monthly payment isn’t always good. A shorter loan with higher monthly payments will reduce the amount of interest you pay in the long run.

Know When to Walk Away

If you want to know how to get the best deal on a new car, this is one of the biggest tricks. It can also be hard for some people because they fear missing out on the deal that was already offered.

Simply put, we recommend going into the negotiation with your absolute top price in mind. If the dealership won’t get to that price, leave. 

You may be able to find a better deal or a better price at another time. Maybe you’ll decide later that you’re willing to pay a little bit more for the exact car you want but don’t let yourself feel any pressure to change your maximum price on the spot.

If it comes to this, you have to actually walk away. That is, don’t try to bluff with this technique. The salesperson will get back in touch with you if they decide to lower their price further and meet your budget.

Come Prepared

Come prepared to buy a carIt’s hard to get a great deal on a new car if you don’t know what qualifies as a good deal. Go to the dealership with an idea of what a car should cost. What’s a high price for the car you want?

What’s the lowest price you can find that anyone has ever paid for this car? Keep in mind that people’s personal accounts of buying a car may be slightly exaggerated one way or another, but it can’t hurt to read a few anecdotes.

Even more importantly, look for defined figures about the price of your vehicle. One thing to look for is the invoice price. This is how much the dealership paid for the vehicle. From there, the dealership’s profit depends on multiple things:

  • The amount you pay over the invoice price
  • Rebates or discounts from the manufacturer
  • Other incentives from the manufacturer, especially for hitting sales quotas

Also consider the MSRP, which stands for the manufacturer’s suggested retail price. This is the sticker price on the car, or how much the manufacturer thinks you would pay in an ideal world.

The dealer is obligated to display the MSRP, but they can choose to sell the vehicle for less. Unless there is an incredibly high demand for a specific vehicle, it’s unlikely that you’ll have to pay the full MSRP.

Finally, look to credible online resources to learn more about the fair market price of a vehicle. Resources like Edmunds and Kelly Blue Book can tell you just about everything you need to know as you learn about the price you should pay for a new vehicle. You can find information about all of the core things discussed above:

  • The vehicle’s invoice price
  • The vehicle’s MSRP
  • The vehicle’s fair market value is based on what others have paid

Keep in mind that you must be looking at vehicles with the exact same trim level and features for the information you find to be accurate. 

Get Pre-Approved for a Loan

Assuming you need to take out a loan to get your new car, it may be best to get pre-approved for an auto loan. If you do this, you’re getting tentative approval from a lender based on estimated terms. You’ll have to make estimates about the specific amount of money you borrow before considering things like the loan term and the interest rate. There are a few things to keep in mind before you apply for pre-approval on a loan:

  • This may lead to a hard inquiry against your credit, which can temporarily drop your credit score. That isn’t the end of the world, but we don’t recommend applying for pre-approval unless you’re serious.
  • Pre-approval doesn’t necessarily guarantee actual approval. There are still conditions you’ll have to meet. To give yourself the best chance of converting your pre-approval into full approval, answer all questions as accurately as possible throughout the process.

The benefit of applying for pre-approval on a loan is that you don’t have to worry about financing while you’re at the dealership. You can also shop around to find more favorable terms. Better yet, you don’t actually have to take the loan you’re pre-approved for. The dealership may make you a better offer.

Buy the Car With Cash

If you don’t need a loan, you may be able to save money by buying the car outright. If you can get a loan with a very low or no APR, some people say that’s even better than buying a car in cash.

For most loans, though, you just end up paying hundreds or thousands of dollars in interest throughout the loan. Even if you can’t buy the whole car in cash, consider how a larger down payment can limit your exposure to payments on interest.

The other nice thing about buying in cash, though, is that you definitely won’t be tempted to go over your budget. Some people underestimate how significantly their monthly car payments will affect their financial lifestyle. If you can afford to pay for your card all upfront, there’s no need to worry about the monthly payments going forward. 

Watch out for “Feature Creep”

Research the different trim levels and option packages before you go to the dealership. Think about what each of them is worth to you. To help with that, we normally recommend breaking them into three categories:

Must-Have Features

These features are so important to you that you won’t buy the car without them. Maybe you absolutely must have the new car in red, or you know that your job requires you to get a truck with a certain level of towing capacity.

Make it clear to the dealership that you won’t accept a vehicle without these features so they don’t waste time showing you anything that doesn’t meet your requirements.

Nice to Have Features

These features may be worth it to you if you can get them for the right price. This is the hardest category because you have to stick with your assessed values on the fly. Don’t be afraid to take some notes with you to the dealership.

For example, how much would you be willing to pay for an extended warranty, prepaid maintenance plan, or fancy wheels? If you can get a big enough discount on these features, go ahead and treat yourself, but don’t pay full price for anything that isn’t a requirement.

Unimportant Features

You don’t care at all about these features. If you’re only driving this car for summer road trips through the deserts of Arizona, heated seats really aren’t worth any amount of money to you. If the car salesperson starts discussing these features or option packages, just let them know you aren’t interested.

Think About the Cost of Ownership

cost of owning a carThis won’t necessarily help you get a better deal, but it will help you set a more reasonable budget. Your new car won’t just work forever with no extra money.

Factor in things like how much you’ll spend on gas based on how much you drive. Think about how expensive to get this type of car insured with your driving history, how expensive repairs are, and how much you’ll spend on regular maintenance. 

If you can’t afford to keep up with all of these extra expenses, you can’t afford the car. You’ll end up falling behind on payments or skipping maintenance and repairs you need.

Once you start missing important maintenance to save money, you’re shortening the lifespan of your vehicle and making it depreciate prematurely. You can find tools from sites like Edmunds that will help you estimate the true cost of ownership.

Discuss the Trade-in Separately

Car Trade InIt may not feel like it, but your trade-in and the purchase of your new car are actually two separate deals.

Sure, you’re using the money from your trade-in to help pay for the new car, but the amount of money you get for your old vehicle should be completely independent of the amount of money you spend on the new one.

There’s really no reason to discuss them at the same time unless one party is trying to confuse the other party for their own gain. 

It doesn’t really matter whether you discuss the trade-in price or the new car price first. Normally, people discuss the new car price first and then bring up their trade-in after an agreement has been reached.

That doesn’t mean you should tell the salesperson you don’t have a trade-in. If they ask, though, just request that those two discussions remain separate.

Use Your Tools

Some people don’t like to reference anything during a negotiation because they’re afraid of how it makes them look. Don’t worry about that. If a salesperson at the dealership ever needs to look something up in the middle of a negotiation, they won’t hesitate to do so. It’s no big deal.

With that in mind, we recommend that you use all the tools at your disposal to make sure you’re getting the best deal you can. If that means bringing printed or written notes from home, go ahead. We’ve even seen people bring laptops to look at loan amortization tables.

Your smartphone is the most important tool of all. If the salesperson names a price, feel free to look it up online while you’re standing there with them. They shouldn’t get offended by that because you’re only being diligent.

There’s no reason to blindly trust someone you don’t know very well when you can confirm the fairness of a price in a few seconds. If you feel uncomfortable doing this, just explain what you’re doing and tell the salesperson it’s nothing personal.

How to Get the Best Deal on a New Car

Best Car DealShopping at the best Chevy dealership is the best thing you can do once you learn a few things about how to get the best price on a new car. Our team at Valley Chevy has locations all around Phoenix and the surrounding areas. 

People who want to buy a new car for the lowest price come to visit us from all over the state of Arizona, and we’re always happy to help them. Come see us today to get started, or contact us online to schedule a test drive or stop by one of our premier Chevy dealerships in Phoenix.