Many people dread negotiating with a car dealer when they are trying a buy a car. Some people would rather face a dentist than deal with the anxiety of negotiating with a car dealership. You can take heart in the fact that the car market is flooded with used cars sold and purchased by private parties each year. Used vehicles are often in high demand, meaning if you have a well-maintained latest model car that you are considering trading, it will be easier to sell it to a private party. This could save you thousands of dollars. Several tips can help you sell your car smoothly without the pressure and tricks by car dealerships to rip you off the profit. Here are a few suggestions that might help.
1. Knowledge is power
Consumers are today enlightened about cars and the buying process than ever before. The internet is rich in information about car features, prices, and financing. You can learn this information through your mobile devices to help you understand all obscure questions you could have about the car buying process.
If you are looking for financing options, you do not need to visit a bank to learn this; you can apply for financing from several financial institutions and credit unions online without walking to the bank. Additionally, you need to understand your credit score before starting a car leasing or buying process; otherwise, you could be ambushed in the negotiation process if you learn about your credit condition at the dealer’s office. Credit Bureau Singapore or Singapore Commercial Credit Bureau can help you know your credit score before initiating a car buying deal.
As a used car shopper, you need to separate cars worth your consideration and the ones you should pass. You can learn about the car’s history through websites like OTOFACTS Singapore and Oneshift.com to help you know any problem with the car you are considering. This way, you do not waste time searching through the hay of all used cars for a perfect one. You do well also to consider the insurance cost of the used car before committing; otherwise, you could meet with a sticker shock of overwhelming insurance cost.
2. Remember, it is a business transaction.
Car salespeople could make you form an emotional bond with the car you want to buy and cloud your judgment. The car buying process is often loaded with anxiety and emotions since the negation process is sometimes marred with arguments. Therefore, you should remember that buying a car is a business transaction, and uncontrolled emotions can usurp your negotiation power. The salesperson is not your best friend; they simply want the car off the yard and your money in their pockets.
Do not go into the negotiation process with arrogance trying to bully your way to a great deal. This could intimidate the salesperson, but the manager and the salesperson often find a way to stick to an obnoxious customer. If they don’t like you, you may end up with a lousy deal.
On the other hand, some salespersons could intimidate you or confuse you into taking an unfavorable deal for your wallet. It is advisable to carry a friend along who can help you see things clearly. Remember that you can always walk away if a deal does not make sense to you.
The car buying process requires that you be polite and level-headed. You do well to keep the business transaction before you rather than get distracted by mundane things along the way. Furthermore, when heading for a test drive, take the opportunity to be familiar with the car and not demonstrate your driving prowess.
3. Do not focus on the payment.
Most buyers often ignore this critical piece in the car buying process. While it is essential to get a car that fits into your planned monthly payment, putting it as a sole motivator is a recipe for a horrible deal. Most car dealers know that if they keep you focused on the monthly payment, they can manipulate transaction numbers to arrive at their desired profit. If you focus on the monthly payments, you will fall for a lousy deal and pay more in the long run.
Therefore, instead of focusing on monthly payments, consider the car’s total cost. Some dealers can trick you with extending your loan period by several years, which reduces your monthly payment but inflates the payable interest. Furthermore, you could face high repair costs as your car ages while still paying for the car.
4. Understand the Deals
Sometimes automakers want to get rid of the old stock to create room for a new model, and they could offer money-saving discounts. As a buyer, you could get favorable financing deals like reduced or elimination of interest costs.
However, a salesperson may not divulge this information to you, and you could end up paying more than intended. Therefore, you should conduct research and be acquainted with the available offers. The best place to start could be sgcarmart.com or CARRO.sg to compare automakers’ prices and car deals. Remember that most car deals are available for buyers with an excellent credit score, though the value may vary depending on the dealership.
5. Consider Financing Early on
If you allow the car dealerships to arrange for financing, you will gain an advantage at the negotiation. Though it may look like a favor from the car dealer, they will be selling you one of their profitable products- car financing. Adding financing in the negotiation process gives the dealers something to adjust to recover any ground they may have lost in the car price negotiation.
Lenders often authorize dealerships to sell loans and put a markup on the interest rate. They will not tell you they have hiked the interest rates as they are interested in the deals that make them more money. Do not agree to pre-approved financing; negotiate this with a financial institution, state, or credit union before you head for negotiation with a car dealership.
Ensure you understand the loan terms, including interest rate, loan length, prepayment penalties, and the accompanying fees. An early search will help you know if there are any hick-ups with your credit score record so that you can correct them. Any dings on your credit could complicate the purchase process or even make it more expensive.
6. Separate Your Trade-ins
Most salespeople would want to maximize the trade-ins into the stew of car dealers to put you in a fix. This could add more confusion to the negotiation process. If you are not careful, the trade-ins could be used to push the car price higher.
An experienced salesperson can point out a fantastic trade-in as the reason for your car overpricing and add years into your financing. If you have a trade-in, you do well to force the car dealership to structure the deal without considering the trade-in. After seeing the deal without a trade-in, then you can bring it up in the end.
Another way could be to sell your car to a private party or another car dealership. If the car is still in good shape and is of the latest model, you could sell it as a certified used car, increasing its demand. You can use the money you have acquired to buy another desired car from a dealer.
7. First, Negotiate the Price.
As a buyer, your main objective is to get a better deal with the lowest possible price. On the other hand, the salesperson aims at getting the most profit from the dealership. Good negotiation skills are necessary to help both parties get the middle figure. You need to have complete knowledge and keep some components separate to avoid confusion resulting in a costlier deal.
Ensure your car price includes all taxes, fees, and add-ons because you do not want these additional costs to come up after negotiating a good deal.
Keep in mind the common negotiation rule: the first person to speak loses. Though this is an oversimplification, it is advisable not to say how much you are willing to pay because you cannot move any lower. Ensure you have done your research to back up why you are not willing to go any higher, thus forcing the seller to back up their reason for not going any lower. Learn the art of talking when necessary. Do not fill in the gaps from the salesperson, but wait for a question.
You should also know what type of car you are negotiating. The hottest cars in the market will be hard to negotiate than slow-selling cars or mainstream models. It is also wise to know what is negotiable and non-negotiable. Some costs such as destination charges, taxes, and registration costs are non-negotiable, though you could inquire of any additional charges. However, you can negotiate some junk fees, and if the dealer has included some expenses you are uncomfortable with, you should request the removal of these.
8. Timing will Help You Save
Knocking at the dealership door when they are about to close the day’s business will likely give you a bad deal. A late inquiry and trying to force a deal may annoy the dealership, and they could quote a higher price to send you away. The best way is to look at the calendar and time at the end of the month, quarter, or year when the salespeople are concerned about improving their bonuses and commissions. These periods will help you get on better odds of winning a more incredible deal. However, this can only work to your advantage if the dealership has not hit its goals.
9. Remember, there is more than one dealer.
Though moving from one car dealership to another is a huge hassle, it could go a long way in avoiding one of the worst mistakes in car shopping- getting car prices from a single dealership. Having multiple prices from different dealerships will help you compare different prices and make a conclusion.
With the internet, it is easy to make comparisons from the comfort of your house. You only need to visit various dealers’ websites and request offers from sales managers. The corona pandemic has made many dealerships improve their online sales feature, which you can to inquire about prices. Compare multiple prices to help you make a better decision on the car type and their configurations.
10. Say no to Costly Extras.
After you come to an agreed price with the dealership, they could usher you into the financing office. If you do not take care, this place could create unnecessary holes in your pocket. You could also be forced to buy add-ons which salespersons may convince you that you need.
The truth is, these things you can get from third-party companies at a lower price. If you must buy them from a dealership, you do well to do that later after the deal is complete. It is essential to investigate the product you want to purchase and the company behind the product.
11. Thoroughly Go Through the Paperwork
Buying a car can be an involving and time-consuming process. After the deal is done, you will have lots of paperwork to go through and sign. Take time to read and understand the documents you are signing, even if you are tired or anxious to get on the road. Ensure you check if the car price, loan terms, and trade-in values are what you bargained for. Be on the lookout for any unexplained fees that could appear on the contract at the last minute. If the form has inaccuracies or is incomplete, do not sign it. You also want to be certain that the dealership is okay with your financing before leaving with the car; otherwise, you could fall victim to yo-yo financing. If you fall victim to this type of scam, seek funding from another financial institution or credit union. However, if you cannot find alternative financing, you can drop the car at the dealers and walk away.
Be Ready to Walk Away
Though the car dealership may dictate the negotiation and the purchase process, remember it is up to you to make the final decision. You have the key to unlocking the deal and the greatest strength because you can choose to walk away from an unfavorable deal. Choose to exercise this power without any regret.
Unfortunately, some buyers choose to stick to a lousy deal because they like the salesperson or feel embarrassed. If you want to be a good negotiator, you should never forget that buying a car is a business transaction. Some also fear walking away from an unfavorable deal, reasoning that they have to spend a lot of time in the process. However, keep in mind that spending money on a terrible deal with a higher interest rate and the more extended loan period is more painful than your time negotiating the deal. Remember that any other signature apart from the one in the final deal is not binding, so no one should tie you down with offer signatures.
From the above discussion, we have seen that the process of negotiating for the best car price as a buyer does not need to feel overwhelming. You can get the best deal from a car dealership and begin enjoying your ride with the correct information. On the other hand, you can take advantage of several alternatives to car ownership, such as car-sharing services. At Shariot, we offer you the most affordable and comfortable car-sharing platform. Our cars are modern, offering you the greatest convenience of a car-owner. With Chariot, you will forget the hassles of the car buying process.