Always Negotiate Everything Separately
What most people don't realize is dealerships make most of their profit in areas other than the sale of new cars. The typical dealership may only make between $500 and $1,000 in profit on new vehicles sales (much less if you're an informed buyer). However, they can make thousands more by undervaluing your trade-in, gouging you on finance rates, and charging exorbitant amounts for add-ons such as extended warranties and service contracts.
The way they do this is by packaging everything together under one monthly payment so you don't really know what you're paying when it comes to each individual item.
There is one simple rule you MUST abide by in order to maximize your savings and prevent getting ripped off: ALWAYS NEGOTIATE EVERYTHING SEPERATELY.
Negotiate the price of your new car as if you didn't have a trade-in. Negotiate your trade-in as if you weren't buying a new car. Get financing lined up before going to the dealer, then compare it to what the dealer has to offer. Finally, negotiate your add-ons separately. It's simple, but you'd be surprised how often people get fooled by this.
Most car shoppers only focus on monthly payments without realizing dealers can fudge the numbers, and make things look much better than they really are. Follow this simple rule and you'll be way ahead in the game.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid