How To Negotiate The Best Car Price
Everyone wants a great deal when they are out searching for a new car. However, it can be very intimidating and downright frightening for the newbie. By doing your homework and taking the time to learn how to negotiate, anyone can handle negotiating a great deal on their next car. Here’s how it’s done.
Know The Dealer Price
This price is what the dealer pays before they mark the cost of the car up on their car lot. It’s called the manufacturer suggested retail price or MSRP. You can readily find this price online at Edmunds.com. Select the make and model and any features or options that you want and it will give you the dealer price. Once you know this number you’re more able to negotiate a good deal on the car. You can tell the salesperson that you know what they paid for it and you can make sure that they still get something off of the sale as a profit without having to give them a larger sum of money.
Know Your Credit Number
While it may not seem fair, the better your credit, the better your negotiating ability. If you have a good credit score you’re going to have a great interest rate. Everyone has an interest rate and you want to ensure that you’re getting the best possible deal when you go for a car loan. If your score is low, be sure that you get it up there before you go car shopping. It may mean that you have to wait a bit but having a better interest rate will greatly improve your options when it comes to car loans and which type of car you can get. Monitor your credit at credit.com or another credit company to ensure that you’re maintaining a decent credit score at all times. If at any time your credit score drops, find out why and work toward improving it.
It can add hundreds to your car price over the course of the loan if you have poor credit. A typical credit score will range anywhere from 350 to 850 and everything in between. You’ll want yours to be at least 640 in order to get a decent interest rate. Should you have anything below this, you’ll require a specialized loan and pay a lot more interest than others.
Pre-Arrange The Financing
Dealers know that if they do the financing, they are going to make more money on the sale. By pre-arranging the financing you keep that money out of their pockets and in yours. Go to another lender and do your homework before you ever set foot in the car lot. The smartest way to do this is to read up on your options and join a credit union. Credit unions offer great rates and will often work with their customers to ensure that they are giving them the best rates. Cut the profit margin at the beginning and get a better deal. The dealer wants that sale to turn a profit so ensure that you’re making the best possible loan choices when it comes to options.
Know The Value Of Your Trade In
In addition to the financing, you need to know the value of your trade-in. This can also lower your overall cost. A dealer may tell you that they are giving you a great rate but remember to know the value of your trade-in before you go to the dealer. This can save you hundreds of dollars. Keep in mind that more than one dealer has increased the overall cost of a vehicle to compensate for a lesser valued trade-in. Know the blue book price before you shop, it could also save you a lot of money in the long run.
Don’t Focus So Hard On The Payment
It’s really easy to focus only on the monthly payment, however, keep in mind that the longevity of the loan and the additional options will all affect the price. Dealers want to focus your attention on the payment so that they can roll other things into the overall cost. Always watch what those few extra dollars add up to in the longevity of the loan as opposed to the monthly payment. Dealers additions can add on several months worth of payments if you’re not careful. In many cases, this can add up to six more months on the overall length of the loan.