Update: more recently, I have since purchased a new vehicle, and highlighted my new car negotiation strategy.
I found a great video, which was taken at an Ignite Conference, on how to purchase a new vehicle at a good price. I’ve never heard of the presenter, Rob Gruhl, but he has some pretty sound strategic advice on how to buy a new car for a good price. Here’s a summary of Rob’s advice mixed in with some of my thoughts:
1. Plan on taking two full weekends
In other words, there’s no need to rush to a purchase, and rushing can result in making choices based on emotion.
2. Get financing from your bank
This way, you don’t need to rely on the dealership for financing, which gives them the upper hand.
3. Sell your car on your own (no trade-in)
Dealers have no incentive to give you a good deal on your trade-in. They want to turn around and make a decent profit in selling it to someone else. Having sold a car on my own through Craigslist at the same price I bought it for two years earlier, I definitely concur.
4. Choose 3 cars
Focusing in on one car limits your options and flexibility, and gives the dealer all of the power.
5. Test drive the car
But never buy it on the spot. Go home. This puts you in the negotiation ‘drivers seat’.
6. Make a list of the options you need, and the options you want
This way you’re not paying for options that you don’t need.
7. Never start with invoice price
Dealers get around pricing at invoice by piling on additional fees. This is not the pricing model that you want to chase.
8. Competitive bid, and ask for the ‘drive it off the lot price’
Find 8-10 local dealerships and tell them that you are competitive bidding. If they say they ‘don’t do competitive bidding’, tell them that ‘if they give you the price and it’s the best, I would come down there to buy it today’. Getting the ‘out the door’ price is important in comparing apples to apples when buying a new vehicle. I think that this part of the buying process is the absolute most important in getting a good price on a new car.
9. During the first visit, just leave
Rob’s point here is that something always goes wrong on the first visit. They don’t have the car, the car is slightly different than what they said they had, there are fees added on, etc.
10. When they call you back, stick to your guns
They will try to wear you down. Stick to your guns. If you feel like an ass, don’t worry about it. You will. That’s only normal.
11. Don’t sign anything until you’ve got the deal that you want
12. Don’t buy any of the ‘back room’ offers
Extended warranties, rust protection, waxjobs, etc. Rob’s argument is that all of this stuff can be bought elsewhere for much cheaper.
New Car Negotiation Discussion:
- What car buying tips can you share?
- Have you tried any of the above car buying strategies? How did they work?