This post originally appeared on simplewheels.co
Buying a new car isn’t an easy thing to do, especially if it’s something you’ve never done before. Unscrupulous dealers have decades of experience in squeezing every last penny out of buyers. In this post, I’ll outline 5 critical things you should do before buying a new car.
1. Build Your Own Car Online
Before you even set foot in a dealer lot, you should head over to the manufacturers website and use the “build & price” tool to customize your perfect car from scratch. This will give you a better idea of what features and colors are available in the car of your choice. Additionally, you’ll know how much those features cost ahead of time, so you won’t get suckered into a higher-priced option at the dealer lot that has features you don’t need or want. Here are some “build & price” sample links:
Remember, if you head to the manufacturer’s website, you can find the “build & price” tool for every make and model on the market.
2. Research Local Inventory
Once you have a good idea of the type of car you’re looking for and the options / colors you’d like, head over to Autotrader to see what inventory dealers have around you. Autotrader consolidates availability across dealer lots so that you can view all the cars around you from the comfort of your couch. Simply enter the make & model you’re looking for, along with your zip code, and Autotrader will do the rest.
From there, you’ll be able to narrow down your search using a variety of other filters, such as distance, year, price, and color.
Start by filtering by the features & characteristics that matter most to you. Typically, these include year, transmission, and color. Soon enough, you’ll be left with a few options that meet all of your criteria.
Pro Tip: Can’t find the perfect car near you? Expand your search radius — most dealers will deliver right to your door!
Be sure to save and/or bookmark the cars that meet your needs; hopefully, these should come from a few different dealerships in order to increase your leverage & negotiating power (more on this later).
3. Go for a Test Drive
Armed with knowledge about the car you like, head on into your closest dealership to test drive the car — be sure to call in advance to book an appointment in case it’s a busy day. The purpose of the test drive is to see how you feel in the car and get a better sense of how it drives. Don’t be afraid to ask the salesperson at the dealership questions about the car either, this is the time to get answers to the questions you have.
After your test drive, do not sit down with the salesperson to talk numbers and purchase price. Tell them you’re still early in your buying process and not ready to discuss a purchase. They will do everything they can to get you to buy a car on-the-spot, but do not give in. The deals and offers they may make to you are likely nowhere near what you could negotiate. Once you’ve determined that you like the car and still want to purchase it, the next step is to research how much of a discount you can get on it.
4. Research Pricing Trends
The MSRP of the car doesn’t necessarily represent what you should be paying for it. Research that shows what people are actually paying for certain cars is available online through TrueCar. What people actually pay is a factor of supply, demand, and timing. If a certain car is high in demand and short in supply, then getting a discount will likely be more difficult. However, if a specific model is in low demand and has high supply, chances are dealers will offer huge incentives to start moving it off their lots. TrueCar builds pricing curves to show what other people are paying around you.
Note that the “TruePrice Average” is not necessarily a great deal for your car either. In fact, TrueCar has partnered with dealers to sell you cars at that price. Not only do dealers make money in this scenario, but TrueCar receives a portion of the profits as well. What you should be looking at is the left side of the curve — the invoice price. This chart shows that a small percentage of buyers are able to buy this car at or below invoice. This should be your target price heading into negotiations.
5. Call Dealers and Start Negotiating
Remember those cars you saved in Step 2? Now it’s time to start calling up those dealerships. The strategy here is to first find out how low dealerships are willing to go, then pit them against each other in a bidding war. Remember to start negotiating below your target price (typically 5-10% lower), and let the dealer come closer to you on price. Don’t budge on your offer price until you feel as though the dealer has come as low as they possibly can. Then, take that number and try to get other dealers to beat it. When you’ve finally aligned on a price, make sure you get it in writing before heading into the dealership to finalize the paperwork, and be sure to watch out for last-minute add-ons, such as extended warranties and premium maintenance plans.
Pro Tip: To get the most out of the negotiation process and the best possible deal on your new car, check out our all-inclusive vehicle identification and negotiation service for just $95.