When you bought your last car, do you know if you got the very best deal? Buying a car is an expensive business at the best of times, so you need to do everything you can to get the price down. The problem is that most people go into the dealer, see something they like and then try to negotiate with the dealer to get their bottom-line price. However, this isn’t necessarily the best approach. There are several things that you can do to get the lowest price possible on a car, and to reduce your monthly payments after that.
First of all, timing is everything. If you buy a model when it has just come out, there is going to be lots of demand for it. Therefore, dealers are unlikely to give you as good a price because there are other buyers queuing up for the same vehicle. On the other hand, if you wait until just before next year’s model comes out, dealers will want to get this year’s model off their lots. This can save you a substantial amount of money – particularly if you visit a number of dealers and get several quotes. If you do this, you can use the information to ask dealers to beat the best price that you have already – saving even more.
Another good approach is to find out what other people are paying for the same vehicle that you want to buy. In fact, you can get real data about this online from TrueCar. They have partnerships with lots of different car dealerships that report actual sales prices to the company. TrueCar analyzes this data and comes up with average prices, as well as the best and worst prices that people have paid. They even identify the dealerships that gave the best prices – and can get you a guaranteed quote from one of their partner dealerships. To find out more about this, take a look at this TrueCar BusinessWeek profile.
Another way of keeping the price down is to buy a demonstrator vehicle. Dealers use these to give customers test drives, but the mileage stays very low. In fact, a demonstrator car is pretty well the same as a new car – except that it costs a lot less. If you buy a new car, then it is going to lose quite a bit of value the second that you drive it off the lot, but this isn’t the same with a demonstrator. Because the car is already being driven, the price is already depreciated and therefore the value won’t drop significantly once you take delivery.
Finally, make sure that you find the best financing options. If dealers have special offers – such as 0% financing for the first year – then this can significantly reduce the amount that you actually have to spend on the car. However, make sure that you do the math on this before you make a decision. For example, if you can get 0% financing for a year on a $30,000 car, then this will save you about $1800 compared to taking out a car loan at 6%. Therefore, if the dealer’s price is more than $1800 above the best price that you have from another dealer, then this still isn’t a good deal.