6 Things You Didn't Know About Negotiating With Car Salespeople

Posted by: Dan on 3/08/2016

Category: General

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When it comes to buying a new car, it can feel like you need to become fast friends with every salesperson you meet in order to get a good deal.

Salespeople see thousands of customers a year, they have their sales pitch memorised, and – while they’d like a sale from you – they know they can’t win them all.

It may seem like the advantage is in their favour, but actually, with some little known facts and top tips, you can ensure you’re on a level playing field.

Read on to learn 6 ways you can gain an advantage and get a great deal when looking to buy a new car.

1. Get your own financing

Not unlike getting a good deal on a movie ticket only to find that a bucket of popcorn is the price of a small country’s GDP, car dealerships make a lot of extra money on customers by selling vehicles at a lower cost while making their money back on expensive financing.

By securing your own financing, you can avoid this pitfall while gaining a good bargaining chip.

Even if you have financing already in hand, be prepared to leave it as an option for discussion in the deal. If you find the car is still a bit out of your budget, but the dealership could give you a reasonable financing package, be open to asking if you can strike a deal for the car and financing all in one. If not, though? Not to worry: you’ve still got financing arranged, and other ways to negotiate.

2. Offer a trade-in

While a salesperson is always happy to make a sale, once you’ve bought the new car, they need to fill the empty space on their lot. If you can help them out with this, there’s a good chance they can help you out with a better deal. So, unless you're buying a new Mercedes – and only have an old bomb to offer back – be ready to put your current ride on the table as part of the deal.

At the same time, don’t make it an absolute that you want to trade in your old car, otherwise the salesperson knows the game is in their favour. Instead, make it an option – and an attractive one at that, by getting it washed and cleaned before you drive it to the dealership – and then be ready to cut a deal with it if they can offer you a good value on your trade-in to bring down the purchase price of your new ride.

3. There’s a difference between an independent dealer and a franchise

If you car shop via a small business dealership, they’ll have more leeway in dealing with you, but they’ll also be less obliged to give you a discount due to having total discretion over ‘house rules.’ If you’re buying from a franchise dealership, they’ll have less discretion, but they’ll also have official sales targets to meet (and most likely ‘allowable discounts’ from the head office they can work with).

If buying from a small dealership, ask to speak directly with the manager, and be sure they see that your potential trade-in car is also on offer. If buying from a franchise, indicate that while you do want to buy with them, there are many other dealerships around and you’re not set on anyone in particular. Then, ask up front, “What can you offer me here?”

4. Timing is everything

If your budget is still a little short for the car you have your eye on, visit the dealership around closing time at the end of the month, versus 9 a.m. on the first business day of the new month. You’ll be much more likely to find the dealer ready to sell and be OK with knocking some money off the sticker price as it gets their monthly quota filled.

Speaking of timing, be sure to ask up front about the repair process, should you buy a car that has a mechanical problem, and ask about any extra warranty that is available.

With a 2016 survey finding average repair costs in the range of $2,000-$3000 out-of-pocket if you buy a “lemon,” it needs be clear (whether you’re buying a car new or used) how repair issues would be handled by the dealership. If buying from a franchise, generally this information is easy to find online, but if you’re buying from an independent, be sure you’ve got something in writing.

5. Play nice to get a better deal

Salespeople will likely try to sell you some extras – that may or may not be beneficial to you – and they may make it a really important goal for some customer who is rude to them. So your mum was right when she told you good manners go a long way.

This means if you’re polite, courteous, and respectful to the salesperson, your odds of getting a good discount or some extras thrown in for free go up big time. Of course there are some bad apples out there, but many dealers have built a large client base from good and fair dealing. When you find such a dealer, make sure you start off on the right foot and build a good working relationship for the long term.

6. It’s a buyer’s market – so be willing to walk away

With the Australian car market as competitive as it is right now, you have many choices of where to buy – and there’s no sign that the quantity of those choices won’t continue to increase going forward. On the other hand, while the good times may be rolling for car sellers right now, it’s never certain how long a spike in demand will last – so the ball is in your court for a sale now.

If you’ve done your homework, been polite, sought a reasonable discount, and then still find your salesperson won’t budge an inch? Be willing to walk away. Countless good deals have been made by a customer doing this, ready to walk out the door only to then hear, “OK...wait a minute!”

If they don’t stop you? It may be for the best. If they won’t budge on price, imagine what a pain they could be if you buy a car from them and then need some repairs done or have other issues.

What other tips do you have for negotiating with salespeople? Do you have any great car buying stories to share? Let us know in the comments below:

Image: Pixabay