Kelley Blue Book Reports that the average 2019 new car price is over $36,500. CNBC.com places the average monthly car payment at $530. These numbers are why consumers need to know how to save money when buying a new car.
Look Beyond The Dealership For Financing
Buying a car is a process. First, you figure out what you can pay for a car. Edmunds and other websites offer online tools to help you make that determination. Before even talking to a car dealer get rate quotes from banks and credit unions.
Holding the note on cars equals more money in the dealership’s pocket. Financing through a dealership may mean less money in your pocket. When you visit the dealer have the loan quotes with you. Seeing that you can do better on financing elsewhere may motivate the dealer to give you a better deal on a loan.
Do Not Reveal What You Can Pay Monthly
Never tell a salesperson or sales manager what you can spend on car payments. “He who speaks first loses.” This aphorism applies when negotiating car financing. Remaining silent about your car payment budget may get you a lower monthly payment and better terms.
For example, don’t forget to ask about 0 interest cars. As the name implies these are vehicles that can be financed interest-free. Not everyone qualifies for 0{9aec2f3753136e72632b4743edb3bd445b461a73e7aee1730978bb7c413976bd} financing. The higher your credit rating the better your chances are of getting an interest free loan.
Don’t Be Afraid To Negotiate Price
There is a secret to making an opening offer on a car that is fair to both buyer and dealer. To keep the lights on a dealer needs to make a 3{9aec2f3753136e72632b4743edb3bd445b461a73e7aee1730978bb7c413976bd}-5{9aec2f3753136e72632b4743edb3bd445b461a73e7aee1730978bb7c413976bd} profit on a car. Start by offering 3{9aec2f3753136e72632b4743edb3bd445b461a73e7aee1730978bb7c413976bd} over actual dealer cost, not the price on the dealer invoice, and be willing to give a little. What a car actually costs a dealer is lower than the invoice price.
Variables like the percentage the manufacturer takes off the invoice (holdback) and factory-to-dealer-incentives determine actual dealer cost. There are websites that offer Dealer Cost Calculators. The buyer pays the price for not haggling and that price may amount to over $1,000.
If you prefer to do business with a dealer that didn’t offer the lowest price take copies of the quotes with you. This way when you claim you can get a better price elsewhere the salesperson will know you are not bluffing.
Avoid The Add-Ons Trap
You bought a new car so of course, you want to dress it up. Selling add-ons is where a dealership can really make up for any savings on the cost of the car. There is a story of one car buyer who bought $6,000 worth of add-ons. The fact is many add-ons can be purchased cheaper from other sources. Buying add-ons that you won’t use or serve no practical purpose is a waste of your car buying dollar.
Comparison Shop For A Better Price Price
There was a time when a car buyer would visit five dealers before purchasing a car. Today the average car shopper visits two dealerships. This potentially hurts the buyer. Today comparison shopping for a car is easier than ever.
After you determine what car and what trim package you want you can get price quotes online without setting foot in a dealership. Like other retailers, car dealers use the internet to gain customers. Via live chat or email, a dealership will give you a quote.