Three Tips on Getting the Best Deals for Your New Car
Buying a new car can be a stressful experience. To ensure you get the best deal, research beforehand to find invoice prices and incentives, make dealers compete with each other, and get a pre-approved loan from a third party.
Research Beforehand
Before you step into a car dealership, go online to do your homework. Go to the manufacturer's website to build your car by selecting all the options and packages you want and calculating the sticker price. Third-party websites such as Edmunds and Kelley Blue Book can tell you each vehicle's invoice price and applicable dealer incentives. The invoice price is the price dealers pay the manufacturer for the car and may include a destination charge and delivery fee. Dealer incentives are the discounts and rebates the manufacturers give dealers for making a sale, and could amount to thousands of dollars per vehicle. A car's invoice price minus applicable dealer incentives offers a good picture of the dealer's true cost and gives you leverage in negotiations.
Make Dealers Compete With Each Other
If you just walk into a dealership and try to buy a car, the chance is you won't get their best price. It's okay to go to a dealership to test drive or close an already agreed-upon deal, but don't go there to negotiate. Instead, negotiate remotely until you reach an agreement. First, search online for dealerships in your local area and make a list. Contact them through the contact form on their websites, email, or phone. Tell them the make, model, and exact options and packages you want. Use the dealer's true cost as a point of reference to determine if you're getting a good offer. Show the dealers the invoice price and dealer incentives you've found in your research to let them know you're an informed buyer. Pit them against each other by saying, "I've received an offer of $X from Dealer A. Can you beat it?" Repeat this process until you get an offer you're happy with.
Get a Pre-approved Loan
Often, dealers make more on car loans than on the vehicle itself. If you need financing, you could save a lot by getting a pre-approved auto loan from a third party. Contact your bank to see what rates they can offer. Check out online-only banks and lenders. They tend to have lower rates because they don't have to maintain expensive branches. Another good place to look for cheap auto loans is credit unions, which are nonprofit cooperatives. You must be a member to get loans there, but your employer or field of work may qualify you for memberships. Some credit unions even let you join after paying a nominal fee.