I have a long list of things I do at car dealerships to (1) not get taken, and (2) **** with them when they **** with me. The most useful one is knowing what *their* invoice price is (what they pay) *and* all about the current Rebates and Incentives from (*and to*) the dealer. (Sometimes the dealer gets a bonus from the manufacturer for selling certain vehicles.) Here are a few off the top of my head.
Oh, and I should state that I am an unusual car buyer. I got this from my dad, who grew up at the tail end of the recession (1930s). I save money. I have a "car fund" that I put money in to every month, and when I have enough, I know I can buy a car. If I have to finance 25%, so be it, but my down-payment is always more than half the price. Also, for the past 30 years I have often (but not always) bought used cars (3-5 years old) - often from dealers - which has allowed me to pay cash for my cars as they are less than half the price of new and most modern cars last over 10 years and 100k miles. EVs are even *less* than half price after 3 years. (My Spark EV, bought used, was about 25% of the new price after 4 years - with only 12k miles.)
OK, dealership car buying tips :
- negotiate UP from invoice price, not down from MSRP. KNOW what the invoice price is, print it out, and bring it with you. You should also bring an invoice price list for a car tricked out with every option so that you know what the DEALER (supposedly) pays for each option package.
- get approved for a car loan from your bank or credit union before going in (if you are going to get a loan). If you are buying a car, that is a great reason to open an account at a credit union - generally much better rates on car loans. And if you already have a loan lined up, less time wasted at the dealership and you *can* compare if the loans to see if theirs is better. (If you got it from a credit union, it won't be.) LOOK AT the total amount you paid by the end of the loan - for loans of the exact same duration - that is what you should be comparing. Ask at your credit union for loans of 36, 48, 60, and 72 months, and get pre-approved. Sometimes the % changes, and that way you can compare *whatever* loan the dealer is pushing. I went to negotiate a new car for my daughter 5 years ago. She *wanted* a loan to help establish credit history. She financed 20% of the price over 3 years, with a 1.65% loan from her credit union. At the end of the loan she had paid a total of $382 for the loan (she paid $382 more than she borrowed).
- always talk about total cash price, not monthly payments (talk about trade-in later). "Just get me in the car for the right price and well talk about trade-in or loans later". Or, "'We'll talk about that later, let's just focus on the price of the new car for now" . It is very easy to compare full cash price. The dealer will try to confuse you with "up-front" and "monthly" payments, and anything else they can to get an extra buck or two out of you.
- When dealers are negotiating they hope to make money via financing. So *don't* tell them up front you're paying cash, or not trading in a car, because then the dealer knows he has no opportunity to make money off you from financing or screwing you on the trade-in. So, he might not be as moveable on purchase price if he already knows he isn't going to make any money off you on "the back end". You say "let's deal with the price first, THEN talk about financing an/or trade-in. Price first, details later."
- Dealer holdback. This is a percentage of either the MSRP or invoice price of a new vehicle that the manufacturer repays to the dealer. (The dealer, not the salesman.) So the dealer will get a check for 2% or 3%, or whatever of the amount of the car from the manufacturer, generally at the end of each quarter. Holdbacks enable dealerships to advertise invoice-price sales and sell their vehicles at or near invoice and still make hundreds of dollars on the transaction. The holdback amount is "invisible" to you because it does not appear as an itemized fee on the window sticker. You bring this up at the end of negotiating when it starts to get difficult, especially when they bring in the "closer": "Hey, the dealership is getting the dealer holdback, don't forget that."
- don't be afraid to say "well, you apparently don't want to sell me a car today, I'll go look elsewhere" and walk away. (well, first you pretend to walk away, but you should feel comfortable walking away). If they are the ONLY dealer in the area, you can say "I guess I'll just order the car on the internet and have it delivered". Watch them go completely white in the face. (You should have already looked on-line to see what deals are available, so that you can drop the name of on-line sellers, or other dealerships, at this time).
In fact, I should have started with :
- look online at their inventory. Start with the cheap cars and then look at what features you really want. Print out a few the day you go to the dealer - make sure it lists the VIN ("car ID number"). Also (in the days before) send an email to all the dealerships within 100-200 miles (within the range of your EV). Tell them what you want and ask for a price. START from there, because with an email you can go to your closest dealer and pull the printed email out at the right time and use it to negotiate, if needed.
- don't get sucked into buying a different model, or extra options. Dealership will advertise the lowest possible price, with every discount, on a "stripped" model. They may not even have it on-site when they advertise. When I bought my Corolla (yeah, over 20 years ago) I walked in with the ad and said I wanted that car. They told me it had been sold, the day before, that the ads were set up days or even a week or two in advance. I said "funny, when I called an hour ago I was told you still had the car still on the lot". He hemmed and hawed. I said that was the car I wanted, no frills, and I guess I'd just go to {named his biggest competitor}. I got the car I wanted with ONE extra option package (power steering and A/C, which I wanted anyhow) for $75 over the advertised price.
- When the salesman balks try this phrase : "I want a car, I'm trying to give you money - TODAY - but not at that price" and/or (maybe later repeat the mantra) "I am trying to give you money, why won't you take it, what is wrong ?"
- don't accept any "dealer extras" (such as car alarms, or undercoating). Duh.
- sell your own car as an individual, don't trade it in. Frankly, you will get a better price. Often a MUCH better price.
- Since salesmen and dealerships get bonuses for amount of product moved on a monthly and/or quarterly basis, it is best to go buy a car on a "slow day" (not many other customers) AND when the sale means a lot to them. So, during the week, when the weather sucks and near the end of the month. Even better, near the end of the QUARTER when the dealership's quarterly bonus is going to be calculated.
Don't believe “the deal is only good today”. Or, the proper response is "if the deal is good enough, then we can do it today. If it isn't, I'll just go somewhere else."
Summary of useful phrases :
"No, I won't pay that fee"
"I want to give you money today, you don't want it?"
"You are going to be paying the finance costs as long as that car is on your lot, whether its's a week or a month or three months. You don't want to sell it today?" (Dealers generally borrow money to pay for cars. Sometimes, not often, dealers get the cars 'fronted' to them by the manufacturer for a VERY short period of time.)
