Think Of The Dealership Visit As The Closing Act, Not The Opening Scene
Many individuals enter a dealership and simply go with the flow. They come in with an open mind, are directed towards alternatives they never even thought of, and end up with a monthly payment that exceeds their initial budget. The truth is that this is not how you should buy a new car – but all the necessary steps must be taken before you find yourself there.
Build A True Drive-Away Budget
The sticker price doesn’t include additional costs like registration fees, dealer delivery charges, and stamp duty. And, if it’s a luxury car, there’s an extra tax to pay. The same is true of insurance. Before you fall in love with any particular model, whip out the calculator. Subtract all the extra costs and taxes from what you can afford. That gives you the maximum price of the car itself.
A dealership will give you a drive-away price if you demand one, and you don’t want to have worked hard on negotiating the price only to be surprised partway through the process. Get a quote for the insurance the vehicle you’re interested in will attract. Insurance premiums can vary a lot between vehicles, and that difference adds up every month over three or four years.
Do The Research That Manufacturers Won’t Do For You
Brochures present the car in its best light. Owner forums, its most unvarnished. Before shortlisting any model, invest time in an independent community or two in which actual car owners are ranting about transmission glitches, electrical gremlins, or timing chain issues at higher mileages. Then cross-reference that against recall data in the public domain.
The average age of passenger vehicles is just over 10.6 years (ABS), so most people are absolutely keeping them long term. Reliability as well as maintenance and repair costs weigh far too lightly in the purchase equation for most buyers. A cheap car that’s expensive to maintain will always cost you more than the model with the big, shiny, pricey touchscreen you didn’t buy.
You can do this next bit where you check the fuel consumption label on any vehicle you’re seriously considering – yes, the figures are optimised for comparison rather than real-world accuracy, but that doesn’t make them useless. They are a handy relative indicator.
Know What Your Current Car Is Actually Worth
If you plan to trade-in your old car for a new one, it is suggested that you check the wholesale and private-sale values of your old car. Once you know these figures, you can analyze the difference between what a dealer will pay and what you could get if you were to sell it. The difference can be significant.
When you look at carsales perth for example, you can see what similar cars are actually listed for sale locally – real data from the market, not just a theoretical price. This will help you make an informed decision on whether a trade-in is a good offer or not, rather than just hoping they are giving you a fair deal.
Trade-in and purchase discussions should be separate. First, negotiate the best purchase price for the new car and then move to the discussion of your trade-in.
Arrive As A Cash Buyer
Arriving at a dealership with financing already approved by an outside lender makes a significant difference in the way you negotiate. The dealer realizes you don’t require their financing, so they must compete regarding the price of the car itself, rather than putting a deal together where the profit is built into the interest rate.
Obtain written pre-approval from a bank or credit union before you visit the dealership. The interest rate you’re quoted becomes the rate you’ll use. Should the dealer’s financing be able to offer a lower rate, then go with them. If not, you have your financing in place. In any case, you’re in control and the dealer will sense that.
Make the car’s price separate from the financing you discuss with the dealer. They like to combine both as it makes it harder to realize the real cost of the purchase. Make them separate discussions.
Build A Checklist and Don’t Deviate From It
Prepare this well before you head to any dealerships: what you need from a car (safety, seats, space, towing), what would be nice but not essential. Then at the dealership, you want what’s necessary first, within your budget, and if there’s money leftover, you look at what’s nice. 9 out of 10 people do this the other way around and it gives management no incentive to reduce the price or offer a better finance deal.