5 Ways To Get The Best Deal On A New Car
Dealers are more motivated to sell a vehicle that they actually have on ground as opposed to one they have to order from the factory or get from another dealer.
The reason? Well, just like you, dealers have bought their cars on credit, and every vehicle on their lot is accumulating interest every single day it sits unsold. Since the vehicle that is in stock at the dealership is costing the dealer more money, you can often negotiate a better deal. To maximize this strategy, its best to negotiate with a dealer that has the largest inventory of the make and model you are interested in purchasing. Most sophisticated dealers will have a website that shows exactly the number of in stock units they have on ground for each make and model they sell.
This is basic supply and demand economics.
When a manufacturer introduces a hot selling new model vehicle, the units are in short supply and the buyers get on a waiting list. There is no incentive for a dealer to provide steep discounts when they have a line-up of eager buyers who will pay anything to have the newest vehicle on the road. Choose a similar vehicle, preferably one that the dealer has in abundance in stock. (See number one!)
There is a popular theory that it’s best to buy a vehicle at month end because salespeople and dealers are desperate to meet their “quotas.”
Sometimes the factory incentivises the dealers, and the dealers incentivize the salespeople with special contests based on a number of performance metrics, including volume targets otherwise known as “quotas.” Most of the time, there are no special contests in place and its business as usual. Therefore gross profit per vehicles sold at the beginning of the month are the same as gross profits for vehicles sold at the end of the month. A better question to ask is when does the commissioned salesperson get paid? Commissioned sales staff are not paid until the vehicles are delivered …if a salesperson has not sold many cars leading up to pay day, they may be inclined to present more favorable pricing so they sell and deliver a vehicle in time for it to be included in the regular payroll cycle.
The price of the vehicle you buy should have nothing to do with how much your trade is worth.
Every customer believes that the vehicle they already have is worth more than it is, and the vehicle they are buying is worth less than it is. Knowing this, dealers will often show you an inflated offer for your trade, only to make up the difference buy tinkering with the price of the new vehicle. Avoid this by separating the transactions. Negotiate the terms for the new vehicle. When you are happy with the new vehicle deal, focus your energy on getting the most for your trade in. If you don’t like the dealers offer for the trade in, sell your vehicle privately.
You have an idea of how much you want to spend.
Stick to your guns. It can be tempting to go for the added options or upgraded features. If you can afford it, great. But if not, it’s best to keep to your established budget.
Following these steps will help you get the best price on a new vehicle. However, the fact is that dealers generally average about the same amount of profit on vehicles they sell. The average difference between deals at competing dealerships that sell the same brands is just a few dollars. So while you should educate yourself and do your online research about the vehicle, dealership, and even the individual salespeople, the best advice is buy from someone you like, trust, and feel comfortable with.