How to Handle Car Dealers
Most people have a love-hate relationship with car shopping. You love getting new wheels, but you hate that nagging feeling that you may be playing a game you can’t win. And despite industry reports that car buyers are increasingly satisfied with their experience in the showroom, nearly one buyer in five still walks out of a dealership because of poor treatment.
You might think the deck is stacked against you, but simply knowing how the game works can help you sidestep potential pitfalls, command better treatment and get a fair price.
Be prepared. Before you set foot in a dealership, find out what the car really cost the dealer and what other buyers are paying. You can find invoice prices, cash incentives, financing deals and average transaction prices at TrueCar.com. Call several dealers in advance and ask for an Internet salesperson or manager to negotiate prices over the phone and get firm offers via e-mail. When you go to the showroom, take printouts of the pricing details, especially if dealerships are touting special offers. We've heard of salespeople who claim not to know of any deals until they're presented with the ad.
Not up for haggling, period? Try a car buying service, such as CarBargains or TrueCar (formerly known as Zag). The best time to shop is at the end of the month, when dealers try to meet sales goals and qualify for month-end bonuses.
Got a trade-in? Used cars are in short supply, so you're in a great position to get a prime price. Bill Adkins, academy instructor at NADA (National Automobile Dealers Association) University, suggests selling your old car yourself.
If you don't, consider getting a couple of quotes before you get to the dealer. Dealers often try to lower the price of the trade-in if they’ve given ground on the new-car price. Check prices on AutoTrader.com, and stop by CarMax to gauge the market.
Take charge. When you hit the lot, wear your poker face so you don’t tip your hand that you really, really want a particular car -- and don't forget that there are many exactly like it at other dealers. A dealership will often gang up on a customer by sending two salespeople or a salesperson and a manager to make the deal, so it can help to have someone with you who's got your back. It rarely helps to be confrontational during negotiations. "If your negotiation is numbers-based, not personality-based, dealers are going to respond to the numbers," says Philip Reed, senior consumer advice editor for Edmunds.com.
If a salesperson asks you what your target monthly payment is, don't take the bait. There are many ways to lower the monthly payment that will cost more over the long haul -- extending the loan term or switching to a lease, for example. Keep the discussions focused on the total price.
Be sure to ask for a "loyalty" discount if you're buying another vehicle of the same brand as your last. If you're new to the brand, ask for the "conquest" discount. Both of these come from the manufacturer and range from $500 to $2,000. The money goes straight into the dealer's pocket if you don't ask for it. And don't be fooled when the salesperson steps into another room to "get approval from the manager" for the price you’ve offered and comes back saying "we can't do it." Stay firm on a fair price and be ready to walk.
A good chunk of dealer profit comes from the finance-and-insurance office, so bring financing from your bank or credit union to compare with whatever you're offered. Unless there's a manufacturer's special finance rate, the rate is negotiable.
And don't forget to mention the customer satisfaction survey -- every buyer gets one, and high scores mean bonuses for dealers. Make sure they know you will give them good ratings if they treat you well.