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10 Secrets to Getting the Best Deal on a New Car

March 27th, 2008 admin

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It has been a little over two years since I wrote a check for my first car payment–I bought it the summer before my junior year of college, and because of some hard work (and the help of a trade-in) I was able to keep the payment low enough that I could afford it even on a college student’s miniscule budget.

To celebrate my 50th post here at Surviving College Life, I’m going to let you in on the ten car-shopping tips that helped me really drop the price of my car!

  1. Know What You Want. If you’re on a budget, you probably aren’t buying your dream car, but it is still important to know what you want. Know the exact specs of your future car–not just the make and model, but the details, too–how many airbags and cup holders, power steering, manual or automatic transmission, manual or power windows, alarm or not, everything. Choosing exactly what you want beforehand will give you the confidence to tell a dealer NO when they try to sell you something “bigger and better.” (And they WILL try to do that!)
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  2. Know What It’s Worth. Too many people walk on to a car lot with only a vague idea of what the car they want is worth, making impossible for them to spot a good (or bad!) deal. Whether you’re buying new or used, you should find out the current value of the car you want to purchase. The Kelley Blue Book‘s list of car values is a great place to start.
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  3. Pre-Set Your Monthly Payments. Before you even set foot in a dealership, you need to figure out your ideal numbers, especially if you will be financing your purchase. Pencil out how much you can afford to put down, and how much you can afford to pay each month. Find your “upper limit” number for a monthly payment, but don’t tell the dealer a number that high! Don’t forget to figure it tax, license, and registration. When you’re sitting down with your sales rep, make him figure out your total monthly payments and give it to you in writing.
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  4. Shop Around (and Don’t Be Shy About It). I’d recommend going to at least 3 dealerships when you’re looking for a good deal. Make sure you get the exact same car so you can compare prices accurately, and if you can, get the number in writing before you move on to the next. Also, don’t be shy about letting salesmen know that you’re shopping around–it can sometimes get them to give you a better deal if they feel a little insecure.
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  5. Ask for a LOW, LOW Price. For some reason, a lot of people don’t do this. In fact, a lot of people walk in to a dealership ready to pay the retail price. But to get the best price, you need to start low. Lower than you think they’re willing to go. Then you work up from there, negotiating until you get a price you like. Salesmen will NOT offer you a price unless it works out well for them, so you just need to worry about getting a price that works out for you.
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  6. Be Ready to Walk Away. Nothing makes the point that you are serious about your price requests more than your readiness to walk away. I continually repeated to my sales rep that if we couldn’t get the price I was looking for, I didn’t want to spend any more time there–and I meant it. I could just have easily bought a car somewhere else, some other day. No rush. He responded by getting the price down to where I wanted it, and even figured out how to include a car alarm without raising my price by more than a couple dollars a month.
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  7. Bring in Backup. Bring someone along when you go shopping–or at least during final negotiations. (Preferably someone who knows about cars!) Having someone to back you up will give you a confidence boost, and give you someone to talk to if you’re tempted to make an impulse buy. Salesmen can be intimidating, so it can really help to have someone on your side.
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  8. Get a Co-Signer With Great Credit. You’ve probably seen car commercials offering something like “a 4.5% APR on approved credit.” That means if you have a high enough credit score, you can get a really low interest rate if you finance your car. If you’re in college or even your early twenties, you probably don’t have a perfectly stellar credit score yet. Instead of forfeiting those savings, try to get a parent or grandparent with a good score to co-sign for you so you can get their low interest rate.
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  9. Shop Summer for the “Clearance” Advantage. The new year model cars usually appear on the lot around the end of summer, and that means that dealerships want to get rid of their current year’s stock ASAP! Shopping towards the middle of June through the middle of July can garner you great deals on current year stock, because they basically go “on clearance.” Plus, it’s still a brand new car!
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  10. Shop Sunsets. Timing is everything when it comes to car shopping–not just the time of year, either, but also the time of day. If you want to up your odds of getting a good deal, go in to make your final purchase towards the end of the day. Salesmen work on commission, and they’ll want to get their last sales of the day wrapped up–that means they’ll be more likely to work through a deal quickly and maybe even negotiate down more. (Shopping on the last day of the month can also result in a lower price out the door since dealerships want to meet quotas for dealer discounts given to them by car manufacturers if they sell a certain volume of cars for the month!)

Happy car shopping!

photo: Keys 1 by tap78

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Entry Filed under: budget & finances,travel & transportation

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