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Negotiation - New Car Buying Tips

Dealer negotiation strategy - The car dealer wants to distract you and wear you out. They want to have you negotiate seven different things at once:

  1. New car discount
  2. Option & accessory choices
  3. Lease vs purchase decision
  4. Financing rate
  5. Monthly payment & loan term
  6. Rebates
  7. Trade-in value

Nobody does a good job of negotiating seven things at once! Plus, the car dealer stacks the deck against you with multiple people to negotiate with, isolation techniques, pressurized environment, playing with your emotional decision-making, and more.


Your negotiation strategy
Negotiate only one thing at a time. Focus on getting the maximum discount on your new car.

You do that by having all the answers for the six other items. Your decisions have been researched, are already made, and have been well handled.

And, you’ll be handling your negotiations on your own turf, not sitting in the dealership for hour after hour trying to get seven different things decided.

You can’t possibly win negotiating the dealer’s way, so don’t even go there!

Run your Fax Buying Campaign from the comfort of your home or office. Send out your quote forms to the dealer contacts you’ve already acquired.

They want to compete for you business based on dealer invoice pricing, not on a discount from MSRP.

Remember, always negotiate from strength, and in manageable stages.


Don’t tip your hand
Keep all other discussions separate from negotiating your best deal. Don’t disclose any details.

You want to keep them on the hook. Let them believe there will be other profit opportunities on your financing, trade-in, etc.

Don’t disclose that you already have your financing. Say “We’ll talk financing after we finish talking price.”

Don’t disclose your trade-in plans. Say “I haven’t decided yet. We’ll talk trade-in after we finish talking price.”

Don’t discuss your monthly payment range, how many miles are on your trade-in or anything else that’s not directly related to the purchase price of your new car.

Everything else just weakens your negotiating position.


Negotiating Tips
The best way to control negotiations is to have some firm rules to follow. Keep these tips in mind:

1. Negotiate up, not down
2. Make an offer and shut up
3. Never increase your offer before receiving their counteroffer
4. Raise your offer in very small increments
5. Don’t be anxious or display any nervousness
6. Remind them you’re ready to buy now
7. Threaten to leave (repeatedly)
8. Don’t exceed your preset limit
9. If you can’t get the deal you want, then leave

Best tip: Focus negotiation on one aspect at a time and keep it there until you get what you want. Don’t allow the discussion to move to another topic until you get what you want.

Your opponent will want to move the negotiation to other topics where agreement can be easily reached. Don’t move off the topic at hand. Keep the focus there until your opponent concedes.

If they don’t concede, threaten to leave. If they still don’t concede, then leave.


Negotiating Fees
Fees have become an important profit center for the car dealer. You have to be prepared to negotiate these fees BEFORE you begin.

You need to know which fees are legit and exactly how much you’re willing to pay for each one. If you haven’t negotiated your fees in advance through our Fax Buying Campaign, then you need to bring a detailed purchase list that itemizes each fee and states the maximum you’re willing to pay.

Without sufficient documentation and an aggressive bargaining stance, your fees will easily exceed $1,000.

BE PREPARED to negotiate fees!


What Not To Do
Don’t stroll into a car dealership and demand a below invoice price from a salesman. You’ll never get it.

The best prices always come from the fleet department or the Internet sales team.

Don’t expect to get top dollar for your trade-in from a dealer who doesn’t sell that brand. That dealer is going to be wholesaling you used car to another dealer. That means the dealer will only offer $500 below wholesale, tops.

Don’t badmouth your adversary, their business, or car dealers in general. That will only mean one thing.

They will find a way to make you pay!


When to Walk
Never be afraid to call off negotiations that aren’t going well. If you can’t achieve your target price, take your business elsewhere.

If your opponent gets personal, uses derogatory language, and generally belittles your negotiating approach, take your business elsewhere.

If you find obvious attempts to cheat you with vastly overstated fees and paperwork “errors,” take your business elsewhere.

If the dealer refuses to put any promised corrections in writing, then take your business elsewhere.

And lastly, if the dealer encourages you to drive off in your new car before the paperwork is finalized, take your business elsewhere.


Talk the Talk, Walk the Walk
You have to know the new car game vernacular. Read the glossary and become familiar with all the important terms.

You can’t win any type of negotiation if you don’t understand what your opponent is saying.

Throw dealer terms into the conversation (as needed). Show them that you’ve done your homework and you know the financing game inside and out.

Nothing impresses a dealer more than a person who uses an itemized checklist to go over the mechanical condition and appearance of their new car.

Most people just jump in and drive away. If you do, then any cosmetic defects or obvious mechanical problems now belong to you.

Mechanical complaints can be handled under warranty, but that gets your new car experience off to a bad start. Even worse, any cosmetic problems, dents, or scratches are all yours to fix once you pull out of the lot.

Always be prepared to talk the talk and walk the walk.


What They Don’t Want You to Know
1. The dealer needs you more than you need them.
2. They desperately want you to buy today
3. They want you to buy what’s in stock


Best time to buy
1. Weekend - Good
2. End of month - Better
3. Last weekend of the month - Best


Multiple Negotiating Sessions
Car dealers love to tag team you with various additional personnel telling you that they just can’t agree to what the first guy already agreed to with you.

You’ll see other salesmen pretending to be “managers.” They’ll tell you why you can’t get exactly what you want when you want it because it’s bad business for the dealership. Cut them off by asking for their card.

You’ll meet business managers who are on commission themselves. They have a vested interest in bumping up your price.

You’ll meet finance managers who’ll insist that they have to collect each and every one of those exorbitant fees. That’s why the finance department is the biggest profit center in the dealership.

You’ll meet administrators who slide papers in front of you to sign and expect an immediate signature. Tell them you never sign anything without reading it thoroughly and checking all the numbers.

They’ll try to fool you, wear you out, trick you, and sometimes outright cheat you. Don’t ever let your guard down during any negotiation session.

Never forget that you are on hostile ground and serious psychological warfare is underway.

Expect multiple negotiation sessions and be prepared.


If It Isn’t in Writing, It Means Nothing
If and when you uncover a problem, either with the documents or with the car itself, you absolutely MUST get it in writing.

Any document corrections must be made on entirely new forms or initialed by both parties. Make sure the changes are being acknowledged by an official of the dealership and not by a sales person.

If there is any damage to the car or any promised corrections, you MUST get it in writing. Otherwise, you’re out of luck.

Verbal promises mean absolutely nothing!