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Don’t Pay More Than $500 Over Invoice
You can offer a car dealer anywhere from $100 to $500 over a new car invoice price and still walk away with a great deal, according to InsiderCarSecrets, a consumer advice website for car buyers. The site recommended offering $100 over invoice price on lower-priced vehicles, or $500 on a more expensive model.
Note that the invoice price is the dealer cost, according to automotive resource Edmunds, and is different from the manufacturer’s suggested retail price, or the sticker price. You can find out the invoice price on your preferred car ahead of time using NADA Guides.
Shop the Manufacturer’s Website
If you’re in the market for a new car, this car-buying tip could save you money and hours. One way to get multiple quotes from dealers is to go directly to the car manufacturer’s website, choose the car you want — including model, color and features — and request quotes from dealers in your area, according to Investopedia.
Since dealerships compete with one another, you likely will get the best price they offer without going through a painful negotiation process. Collect as many quotes as possible before heading to a dealership, and don’t be afraid to let them know what other dealers offered. If they can’t beat the sticker price, see if you can get any other freebies like an extended warranty, free all-weather mats or coupons for detailing.
Pay With Cash
If you want to get a great deal on a used car, cash is king, said Doug Nordman, author of “The Military Guide to Financial Independence and Retirement.”
“If you’re bottom-fishing at prices under $6,000, you can negotiate a huge discount from a private seller by paying cash,” he said. “Our daughter saved $500 off a $4,700 purchase, and over four years later that vehicle is still going strong.”
It might be tough to fork over a big chunk of change but paying cash for a new or used car will also keep you from wasting money on interest payments and give you more equity in your car.
Beware of the Add-Ons
Once you make a deal on the price of your car, you could receive an invoice that tacks on charges for several extras — such as an extended service warranty, security system, paint protection or rust coating. These items are very profitable for the car dealership, but probably won’t add any extra value to your car. If you are interested in one of the offers, just know the prices are negotiable. If you’re not interested, you have the right to tell the dealer you’d like to purchase the car without add-ons.
Keep Your Trade-In a Secret
If your car salesperson asks whether you’re trading in your old vehicle, simply tell him or her you aren’t planning on it. This might not be entirely accurate, but keeping the trade-in value of your car out of the negotiation can help you get a better deal on your car. Once you have a firm price set on your car purchase, you can ask about trading in your car, said InsiderCarSecrets.
You will probably get offered less than the wholesale value of your car, but this forces the salesperson to take the trade-in value right off the top of your set purchase price. This way, the dealership can’t use your trade-in value as a negotiation tool or manipulate the numbers and make you feel like you got a better deal on your new car, according to InsiderCarSecrets.
Credit: Alicia Bodine