Car Shopping can be daunting. There are five things you need to know at a minimum when you journey for a new or pre-owned car purchase. These are the basics for negotiating a car deal.
1. Know your Credit
What’s your budget? This is important. You need to consider how long you plan on owning the car, how much you plan to use the car, and your credit score. Most credit cards these days report your credit score on their statements. Even easier is tracking your credit on Credit Karma for free. Download the app; log on to the website. Whatever you do, know your credit.
2. Know yourself and your personality
If you’re someone who likes a car to be under warranty or you trade in whenever the car is paid off you probably should be leasing. Remember, however long the auto loan is will determine how much negative equity you will have the next time you go to buy. Don’t roll over negative equity unless you really have to.
A lot of people refuse to lease, but they tend to trade in their vehicles every three years rolling over thousands in negative equity.
If you plan on driving an automobile until it’s ready for the junk yard, it’s simple; you should buy.
3. Be realistic
If you’re asking for a $200 dollar payment with no money down on a brand-spankin’ new Lincoln you might consider getting your head checked.
You have to be realistic. Getting laughed at by a salesperson is embarrassing but more importantly it shows your cards. This tells a sales person you are an uninformed buyer. This information in the hands of a professional salesman can be used against you to maximize profits.
4. Mark your calendar. When do you want to make a purchase?
The end of the month or quarter is typically the best time to buy. Dealerships get bonuses based off of sales quotas. You can often get a great deal at the end of the month sometimes simply because a dealership needs to hit a quota to earn a very big bonus. So although they may lose a few thousand, hitting that quota may have earned them ten times as much. If you make a deal around that right time, you can take advantage of a greater discount.
You don’t want to pass up an exceptional deal but you shouldn’t start the car shopping process until you’re ready to buy.
5. Know what kind of vehicle you want
If you have a couple different makes and models your interested in schedule a test drive to see what you like the best. Find out what options you want. What’s important to you? Do you need leather seats? Will cloth do? What about moon roof or heated seats? Decide what is important to you.
TIP: Be careful not to give too much information to the salesperson. A good car salesman will ask you questions. It’s best to offer as little information as possible when negotiating a deal.
When you can answer these five bullets for yourself, you are ready to negotiate a deal!
Mike is a former high-performing car salesman turned car-buying consumer advocate. Now he spends his days breaking the rules the auto industry has set for the consumer buying process. He’s got a love for God, a love for his wife, and a love for his two boys Elijah & Israel. When he and his wife Corrie are not changing diapers, they like to frequent Lake Erie, try new restaurants, travel and serve in their church.