How to Negotiate a Car Deal
I’m going to share some tips on how to shop for and get an amazing deal on a brand new leftover 2020 model car.
Buying a new car from a dealership can definitely be a very overwhelming and stressful process, and can often leave you left wondering, How do I know that I really got a great deal? By following these simple steps, you’ll be able to shop for a car like a pro and be able to secure an amazing deal on your new car purchase.
Flexible with Your Options
The first step when shopping for a brand new leftover model car is to be flexible.
Dealerships typically start to sell out of their leftover models in the late summer to early fall months, which means that whatever is going to be left over at the very end of the year is going to be pretty slim pickings.
That means you’ll need to be flexible in terms of your color choice, options, features, and even the model of car itself.
As long as you’re willing to flexible and compromise in terms of what’s still available in leftover 2020 models, you’ll be able to take advantage of the amazing incentives and deals.
Understand Manufacturer Incentives and Rebates
Once you’ve settled on a particular model car and know that it’s available at the dealership, the next step is to learn about the manufacturer incentives and rebates that are being offered on that model.
Car manufacturers typically offer a wide range of incentives and rebates that are designed to help clear out the remaining leftover model cars.
For example, there can be cash incentives, which are large cash rebates designed for those who intend to buy the car outright in cash.
There can also be financing incentives, which include a reduced interest rate on the financing, sometimes as low as 0% interest, and this may also include an additional cash rebate on top of that as well.
finally, there are lease incentives, which are similar to financing incentives with a reduced interest rate as low as 0%, and occasionally an additional cash rebate on top of that as well.
It’s important to make sure that the dealership includes all of the available rebates that are available on the particular car you’re purchasing based on the method you’ve chosen to buy the car, whether it’s a cash purchase, financing, or a leasing purchase.
You also need to make sure that the dealership includes any additional rebates that you’re entitled to.
For example, manufacturers often include rebates for a variety of things. There could be loyalty incentives, which is a rebate designed for those who are already an owner of the brand of car that they’re purchasing.
There could also be a grad rebate, which is a rebate designed for students who recently graduated from either university or college.
There’s also military rebates and conquest rebates, which is a rebate designed for those who are switching over from a different car brand.
Once you have a good understanding of what manufacturer incentives and rebates are available on the car you’re purchasing, the next step is to negotiate the purchase price of the car with the dealership.
Now, negotiating the price of a car with the dealership can sometimes feel like you’re about to go into battle, but it doesn’t have to be that way.
As long as you’re willing to be reasonable and leave a little bit of room to keep the dealership happy while also saving yourself a good amount of money as well.
The important thing to understand when negotiating pricing is to understand how the price breakdown of the car works.
Negotiate the Purchase Price
New car pricing is based around a manufacturer suggested retail price or an MSRP, which is the retail price of the car, plus a delivery and destination charge, and a few small levies as well.
Dealerships typically have between 7 to 8% profit markup built into the MSRP, which means that you can comfortably negotiate the price of the car down by between 4 to 5%, which gives you a generous discount off the price of the car and still leaves the dealership just enough profit to keep them happy.
The dealer discount that you negotiate, combined with the manufacturer incentives and rebates that are included on the clear-out model, represents your combined discount or total savings on the car you’re buying.
Now, it’s important to watch out for extra fees and charges that the dealership might try to slip into the deal, which is why it is so important to carefully review the price breakdown of the car and make sure that you understand everything that you’re being charged for.
If you see a fee or an item that you’re not familiar with, ask the dealership what it is.
If it’s something that you think you should not be paying for or do not want, ask the dealership to remove it from the price quote.
If the dealership tells you that they can’t remove it, then ask them to give you an additional discount to offset the price of that charge.
Review the Final Deal Carefully
The final step in the process is the F&I or business office, where the dealership may try and sell you a wide range of add-ons and extras.
This can include everything from extended warranty plans to maintenance plans things, exterior and interior protection, rust protection, and various car accessories like dash cams and even small things like wheel locks.
Don’t let the dealership pressure you into buying any of these extras, which is sometimes easier said than done.
If you’re not sure what an extra is for, whether you really need it or not, just take some time to do a bit of research so that you can make an informed decision on whether you want to buy it.
Remember, everything is negotiable. So if there are certain extras that you just have to have, ask the dealership to give you a good discount on them, or better yet, ask them to throw it into the deal.
Anything that the dealership offers you or any promises that they make should be clearly written into the contract to make sure that the dealer fulfills their end of the bargain.
Once you have fully negotiated the deal, the dealership can now calculate your payments for either financing or leasing if you’ve chosen to do so, and you can now review the contract to make sure that you’re happy with the car you’re buying and the price that you’re paying.
Remember, only sign the deal when you’re 100% sure that you want to buy the car. In many areas, once you sign, the deal is final.
There is no cancelation or cooling off period. Buying a car from a dealership is definitely not an easy or stress-free process.
But if you follow all of these steps, you should be able to get an amazing price and land a deal that you can be happy with.