When buying a new car, negotiation is important if you want to save money. But you must be prepared. Otherwise, you can be easily swayed into making a poor purchase. Here are some car buying negotiating tips to keep in mind:
Know what you want
Before visiting a dealer, you have to assess exactly what you’re looking for in car. Be as specific as possible when thinking about the features or amenities that you want. You must also have a set budget for the purchase. If you come in a dealership without knowing exactly what you want, you can be lured into buying unnecessary extras that bloat the price of the car.
Estimate the dealer holdback
Typically, the dealer holdback is a percentage of a car sale’s price that automakers return to dealers on a quarterly basis. Dealer holdback is usually two to three percent of either the invoice price or the MSRP. This value is usually non-negotiable. It’s always good to estimate the dealer holdback so you can assess exactly how much room you have to negotiate. If a dealer claims that he won’t make money on the deal you propose, having a rough estimate of the dealer holdback can help you determine if he’s bluffing.
Timing is important
It’s best that you visit the dealer during times when they are pressed to make a sale (usually during mid-week and towards the end of the month). You’ll have more leverage to negotiate during these times.
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