Know Dealer Cost
What the dealer paid for the car is called the dealer invoice. By simply using an online site, you can look up the invoiced price in just a few minutes, according to the website Negotiation Dynamics. Many car buyers do not know about holdbacks. The holdback is simply a rebate the auto manufacturer gives to the dealer for each car he sells. Holdback amounts are also available on line.
You must know about two other components — advertising rebates and special dealer incentives — according to Negotiation Dynamics. A rebate example would include a cash-back offer that the dealer must pay you when you buy a car. Dealer incentives are another hidden component. Often, the auto manufacturer will get a special manufacturer incentive when he sells a car. If you do not know about dealer incentives, the dealer will pocket the incentive without you getting any part of it.
Negotiate and Win
You may think negotiating is a complicated process, even though it is quite simple. Know that the lowest profit a dealer will accept is three percent. Car dealers know that smart buyers can figure out what their financial situation is, so dealers use many different negotiating tactics to convince you that their costs are higher than they really are, according to the site Negotiating Dynamics.
Before Your Visit
Get Internet quotes on the car you want from the convenience of your home, and ask dealers to send you a quote. Salespeople will ask you to come speak with them, but refuse to until you get emailed a quote. Insist that each quote include a copy of the sticker pricing for the car so that you can prepare your negotiation strategy.
Call dealers after you are emailed quotes. The phone call will confirm you know what you are doing. It is also an opportunity to confirm the quotes you have received. Respond to the sales price proposal telling the salesperson that you do not think the quote is good enough to meet with him or that the quote is not competitive enough. The salesperson will usually tell you that he can work with you.
Decide on the car you want and then calculate what you are willing to pay based on the invoice, recommends Negotiation Dynamic. Do not be rushed by the salesperson since that is a tactic salespeople use so you will overlook ways to get your price lower.
When the dealer tells you the price, make a lower offer. After your offer, say nothing and wait for the salesperson to respond. Only after you get a quote should you then tell the salesperson you want to trade in your old vehicle. Negotiate the highest trade-in value for your old car to get you the best overall deal.
Good luck with your purchase — and get ready to smile.