Through my years in the car industry (and being a top performer), I’ve negotiated thousands of car deals. For many years, I was what’s called a “closer” which means I would come in at the last minute to close the deal.
Given my vast experience, friends and family often seek my advice on how to get the best deal when purchasing a vehicle. Buying a new vehicle is different than buying used, so I am going to focus on new vehicles for this article.
Once you’ve decided which vehicle you want to go with, here is how to get the best deal from a dealership.
First thing to keep in mind. Although car salesman have a bad rap, most are not the sleazy snake oil salesman you see in movies. In fact, the car industry is now heavily regulated, and manufacturers care more about customer satisfaction than anything else. It costs a lot of advertising dollars to bring someone into a dealership, and manufacturers want to make sure you are a lifelong loyal customer.
That being said, car salesman are on commission and their job is to make as much profit for the dealership as possible. You’re goal is to pay as little as possible. The best deal is one where both parties are happy.
You can get a free vehicle cost report from many online providers such as Unhaggle or Carcostcanada. You are able to see what dealerships actually pay the manufacturer. I’ve looked at many reports and compared them to actual vehicle invoices and they are accurate. The only thing not taken into consideration are volume “kickbacks” from manufacturers, but these are typically unknown (even to the dealership as they don’t know how many cars they’re going to sell).
Once you get your report, I recommend trying to negotiate a deal between 2 and 3 percent above invoice.
If the vehicle is 30,000, negotiating a deal that is $600-$900 above invoice would be a great deal.
To be honest, most dealerships are happy to take the deal, but they will always try for more (that’s their job).
I recommend initiating contact through a dealership online. Their internet department typically has salespeople who are trained to offer the best deal right from the start. Most internet shoppers are shopping 2 or 3 different dealers and usually the one who offers the best deal gets the business.
Send an inquiry to 2 or 3 different dealerships (they can even be in other cities) asking for their best price. Explain what model you are looking for, if you are paying cash or financing, and any other requirements you may have.
It’s best to leave out if you have a trade in. This can complicate the process and make it harder for the dealership to give accurate pricing.
Once you get your responses, compare the pricing to your online cost reports and select the dealership that offers the best deal. If you aren’t happy with the numbers presented, let them know you target price. Be reasonable so the dealership takes you seriously. If you offer an outrageous number, the dealership will probably not take you seriously and that can affect the level of service you get for the rest of the process.