A little research can save you money when you buy a new car.
Buying a new car can be challenging, especially if you lack negotiating skills. The goal of every car dealer is to sell a car at the manufacturer's suggested retail price, or MSRP, which is always higher than the invoice price, the actual price the dealer pays the car maker for the vehicle. According to CarsDirect.com, the MSRP at most dealerships is 10 to 15 percent higher than invoice price. But with a little preparation, you can buy that prized new vehicle below MSRP.
Instructions
1. Obtain the invoice price of the new car you want to buy. Visit the Internet and type "Vehicle invoice prices" to access sites such as Edmunds.com, which provide invoice price information on hundreds of cars, and tell you what other car buyers are paying for the same vehicle you want to buy.
2. Price the new vehicle with your desired options, but know that the more options you choose, the less chance you will have to buy the car below MSRP. Limit your options to only those that are necessary.
3. Determine a "ceiling" price that is below MSRP. Establish the highest amount you are willing to pay, while still keeping that figure below MSRP. For example, if the new vehicle you want has an invoice price of $17,000 and an MSRP of $20,000, your "ceiling price" should fall between those two figures with your options included.
4. Look through newspaper ads to see what dealerships are offering the best prices on the car you want. Obtain online quotes as well and print out the best offers you receive.
5. Visit the car dealer, armed with all your information. Tell the sales person what car you want to buy and explain to him that you know the invoice price, and you want to buy the car for close to that amount. Because you know your "ceiling" figure is between MSRP and invoice, you're already below MSRP when you state your opening price.
6. Stay calm and resolute during the negotiation. The salesperson will likely tell you she's losing money if she meets your price, but because of your research you know that's not true. Even vehicles sold at invoice typically generate a 10 percent profit, according to CarsDirect.com. (see reference 1 for source)
7. Show the salesperson competing Internet offers and prices from other dealerships if negotiations begin to stall. In many cases, once a salesperson knows you've done your homework, he will be more willing to negotiate in good faith to arrive at a compromise.
