Car Guide: Getting the best deal
While much has been made in recent years about buying cars and trucks via the Internet, for the most part automotive transactions are still and will likely continue to be conducted the old-fashioned way. And we're talking really old fashioned here, with the sort of brazen huckstering that would make horse traders back in the Old West blush. Even if you consider yourself to be an expert haggler, there's a good chance you might wind up being a dealership's most profitable customer that day, yet drive off blissfully convinced you've gotten a great deal.
Unfortunately for the large majority of car buyers who approach the process with the same degree of dread usually reserved for having a root canal performed, you'll have to take the time to sit down and negotiate with a salesperson in order to obtain the dealership's "best" price on a given vehicle. While you might be offered a pretty good deal right off the bat or obtain a decent price bid via an Internet car-buying site, you can almost always do better if you roll up your sleeves and do some old-fashioned horse trading. Take these hints when you head to the dealership:
Don't curl up your fists. Keep in mind that your goal here is not to "beat the dealer." No matter how hard-nosed a haggler you may be, you'll rarely, if ever, find a new-car dealer who's willing to lose money on a sale, and you shouldn't feel insulted if a salesperson or his or her manager isn't willing to give away the store on your behalf. (And realize that some high-demand/low-volume cars will command full sticker price or above in some cases.) Rather, the idea is to determine through careful negotiations what is the dealer's absolute lowest price for a specific vehicle on that particular day. Understand that this is a peculiarly and almost constantly moving target that's subject to a wide range of economic, internal and external factors ranging from sheer supply and demand, to an automaker's retail incentives and promotions, and sales quotas that allow the dealer to obtain additional shipments of its most-profitable vehicles.
Set a target price. Before you set foot in a showroom you'll need to establish a "target price" for the car or truck you wish to purchase. Consult an Internet car-buying site or a printed new-vehicle price guide and base this figure on the stated invoice prices for the specific model and trim level you have in mind, plus any options or option packages you'll select, along with the vehicle's delivery charge. A dealer's true cost is actually a bit less than a vehicle's invoice price thanks to something called a holdback allowance. Typically, this is a percentage (usually two or three percent) of either the list or invoice price of a car or truck that a manufacturer pays to a dealer when a vehicle is sold to help assist with the cost of financing his or her inventory.
If a manufacturer's rebate is being advertised for a vehicle, be sure to deduct it from your target price. If you have a trade-in, research your present vehicle's fair-market trade-in value (its so-called "wholesale" price) ahead of time by checking with published or Internet guides, or–better yet–by shopping the trade-in to the dealer's own used car manager. Keep in mind, however, that you might get very little (if anything) for it in trade if it's several years old and/or is damaged or otherwise mechanically unsound.
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