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5 Tips on Bargaining for the Best Price - Haggling
If you are considering buying a new car, you need to know that you do not have to pay the price on the colorful sticker on the car. The dealer wants to make as much money for each car as possible, but that doesn’t mean that it has to be from your wallet. Instead, you can haggle to get the best price on the car that you are interested in buying. Haggling may save you hundreds, or even thousands of dollars, but to do this, there are some things you need to know.
#1 Know the Market Price
It’s important to know the true value of the car that you are buying, the manufacturer’s suggested retail price (MSRP). This is the price that is “fair” to both the dealer and the consumer, but the dealer really buys the car for much less. If you know the MSRP, it will be easier to haggle with the dealer. For example, if the car is worth $15,000 and you offer him $2,000, he’s obviously not going to take it because he would be selling the car at a big loss. On the other hand, if the car is worth $15,000 and he has the car listed at $22,000 and you offer $18,000, he’ll accept and still make a profit, but you will have paid more than you needed to pay. Knowing the MSRP will help you make informed haggling offers that the dealer is more likely to accept and will also keep you from paying too much for a vehicle.
#2 Go In Knowing What You Would Like To Pay
This is a great car-buying tip that can save you money. If you go into the dealership knowing what the car is worth and also knowing what you want to pay, then cut that by 40 to 50 percent and start haggling there. The dealer will likely deny your first offers, but it is good to start as low as possible and then gradually go up. The dealer will feel as though he or she is getting somewhere and the closer he gets to his magic number, the more willing he will be to negotiate. If you start out saying that your bottom line is half of what it really is, you may be able to walk away from the dealership paying even less than what you said you would pay. To make this tip work requires some research; so don’t plan on buying a car without remembering this tip.
#3 Don’t be Threatened
Many times when you try to use car-buying tip #2, you will be told that you don’t know what you’re talking about; basically, you will be insulted. This is a common tactic used by dealers to make you question your own knowledge of cars and even your own finances. Car salesmen are known to talk you out of what you know and into what they want you to believe about their prices and your finances. For instance, you may go in believing that you can only afford to pay $250 a month for a car, but you can walk out sure that you can afford the $330 that the salesman told you that you could. Also, you could go in knowing that the dealership only paid $10,000 for the car you want and walk out paying $15,000, because you’ve been led to believe that is the best deal you’ll get. Don’t be threatened or talked out of what you know to be true. If you go in after researching the car or cars that you are interested in, you’ll feel more confident in buying. Also, don’t let anyone tell you about your finances; only you know what you can truly afford. If your max is $250, tell the dealership you can afford $185 a month to be sure they don’t pressure you into a bigger payment than you can afford.
#4 Use Competitors
It’s always a good idea to shop around when you are buying a new car. It will come in especially handy when you attempt to haggle. If you haggle and one dealership refuses to come down on their prices, throw out the name and price from another dealership. Many times, this will make the dealership take you more seriously and will have them crunching numbers to see if there isn’t “something more” they can do to accommodate you. This buying a new car tip almost always gets the attention of a dealer. If it doesn’t, it either means that they literally cannot afford to drop the price anymore, or they simply are not willing to haggle with you. If that is the case, it’s time to go elsewhere.
#5 Walk Away
If you attempt to haggle and the salespeople don’t take you seriously enough, threaten to take yourself and your wallet out of their dealership. If the dealership really does want to make a sale, they will literally chase you down and beg you to come back in and try to work something out. If you go back in, make a deal with yourself to only go back one time. If you keep getting up to leave and coming back, you lose your leverage. So, go in, haggle, and if you can’t reach a deal, get up to leave. As a matter of fact, get as far as you can with the salespeople still following you, and see if they offer to reconsider their price. If they do, go back in, sit down, and offer them another price. Give them the opportunity to counter offer and let them know they have one chance to do so. When you get serious, they will too, because at the end of the day they want to sell cars.
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