Are you in the market for a vehicle? Whether you decide to go the new or used route, buying a car can be a stressful endeavor if you don’t do your homework. It’s worth it to decide on your strategies for negotiation ahead of time and to know what you’re getting into with certain types of cars and loans.
Read on to learn about a few ways to make the car buying process go more smoothly while getting the best possible deal on your new car.
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Tips for Negotiating a New Car Price You Can Afford
The secret to getting a good deal is to shop around. Reaching out to multiple dealerships allows you to see who is offering the best price and perks to give you leverage to negotiate. If you’re able to provide proof of better offers elsewhere, you may see the price come down.
You should go into negotiations with two numbers in mind: the price you can pay and the price you’d prefer to pay. If the dealership can’t hit either one, it’s time to move on. The following list gives you other tips to consider.
- Move on if a salesperson makes you feel uncomfortable.
- Take your time at the dealership, and don’t let the staff rush you into making a decision.
- Prepare ahead of time by knowing how much a vehicle is really worth, and don’t be afraid to ask for dealer perks or add-ons in return for your business.
Remember, negotiating goes both ways. You may also need to adjust your own mentality to get the best deal. Many car buyers play by the 20/4/10 rule. This advises you to put down 20% on the car, get no more than a four-year loan term, and ensure your total car costs (including payments, gas, maintenance, and insurance) are no more than 10% of your monthly income.
You can consider making the loan fit more comfortably into your budget by increasing that four-year loan to a five-year term, which is a common option. This will lower your monthly payments and give you more wiggle room for emergencies. Keep in mind, though, that by extending the term, you’ll be paying additional interest. If you want to pay the loan off in less time, you can always pay more toward the loan principal if you have extra money and your lender allows it. PSECU does allow prepayments without penalty.
When are the Best Times and Seasons to Shop?
Going to the dealership during daytime hours on a weekday can sometimes help you secure a better deal because fewer people will be there, giving you the undivided attention of your salesperson. You’ll also find the best deals at the end of the sales year, when the dealerships want to clear their lots to make room for new inventory.
How Much Off MSRP Can I Negotiate?
The answer to this question depends on the cost of the car you’re looking at, as well as the individual dealership’s policies. The MSRP (Manufacturer’s Suggested Retail Price) is what the dealer wants you to pay, but you should be able to negotiate to lower the price. Be sure to look at the car’s true market value for a better idea of what it’s worth.
Can You Negotiate the Price of a Used Car at a Dealership?
Yes, you can negotiate price on both used and new cars. Do your research ahead of time so you know what the cars you’re interested in are worth. Look at the vehicle’s history, too, and remember that more expensive cars will often cost more to fuel and repair. This applies to both new and used cars and should play into your decision on what to buy.
Finally, keep in mind that even if you’re preapproved for a loan, you can still change to the dealer’s loan if it’s a better deal. Sometimes, you can find 0% financing or other flexibility that makes this a smart move.