Main menu:
BUYING A NEW CAR FROM DEALERSHIP
If you need some tips on buying a new car from dealership, then go through the following article. This will provide you with some valuable if not the best advice/tips. Buying a car is a daunting task for some people. Many people want to avoid the trouble of negotiating with the sales agents at the dealerships. Luckily technology has developed so much that you can completely avoid going to dealership locations when negotiating the prices on the car. Just by sending/recieving emails and phone calls (only if necessary) you can finalize everything starting from the color of your car to the final out the door (OTD) price you will be paying for your car at the dealership.
Let's go through the car buying process in a step by step manner, so that it is easier for everyone to follow
Step 1: Get Your Dedicated Email Id & Phone Number
The first step you need to do is to create a dedicated email Id just for the car buying process. The reasons being that once you provide the email Id to the dealership, you are sure to recieve a flood of emails continuously, even after you complete buying your car. So do yourself a favor by creating a dedicated email Id. Creating email Id from google is highly recommended since google emails have the ability to stack up emails on the same subject in folder like arrangement. This proves to be very advantageous especially when you want to keep track of quotations from different dealers. Also try to get a dedicated home phone number like magic jack or google voice. You should be able to check the messages left by the salesmen from the dealership, but at the same time remain not too much disturbed by the continuous calls from the dealership.
Step 2: Find The Car You Want to Buy
You need to first decide on what type of car you would like to buy. If you don't know this, then you will have a hard time with the car buying process. Every dealership has dedicated salesman to explain about the advantages and disadvantages of different types of car. Eventhough everyone has their own ways of doing things, the following guidelines should give some tips in general on how this can be achieved.
a...First drive down to your nearby dealer location and approach one of the sales man. Tell him you are unsure about which model you want to buy, and you would like to check out different available models and their features today. You dont have to test drive on this day, but just check out the internal features of different cars available at the dealership, like the interior space, trunk space, comfortability, etc.. Once you are done with one model, ask the salesman to take you to another car model. In this way you get a chance to check out different models and also make a wise decision on the type of car you want to buy.
An example scenario will be like this...you approach a toyota dealership and check out different models like camry, Rav4, Highlander, venza, 4 runner and prius. The reason for suggesting this visit is based on the fact that many people have changed their opinion after checking out the cars. As an example... Mr. X always wanted to buy a Rav4 based on the good reviews and recommendations from his friends, but the moment he checked out the Highlander, He changed his mind completely, since the internal space on the highlander is far better than the Rav4 and Mr.X knew that this is one of the important feature he needed for his family.
After checking all the cars, politely let the salesman know that you need to go home and discuss with your family and decide on which model you would like to buy. Since the salesman also knew that you checked out different models, you will need time to decide. Some salesmen are well trained to convince you into a particular model and pull you into contract immediately, but don't hurry up on your decisions. Remember, you are just checking out cars, you are not ready for any negotiations yet.
b...After a couple of visits to different dealers (from different manufacturers) and comparison between different models, you need to arrive at the final list of models with the right price tag you would consider buying. Once you narrow down your selections, you will need to test drive the cars for a better decision.
c...After shortlisting your car selections, call up your nearby dealership and fix an appointment to test drive the car on your list. This may sometimes become a little tiring, but considering the next few years you will be spending on your car, you should decide on whether this test drive trips are worth it or not.
d...After test driving your list of cars, it is highly recommended to narrow down your result to one final model that offers you what you need at the price you can afford.
e...Now that you know what you want to buy, go to the cars manufacturer website and compare different available options for the model you selected. Try to educate yourself on as much details as possible on what features you wanted on your car. If you don't understand some features on the car, then you can call up the nearby dealership and ask for an explanation. Decide on major features like the engine type (4-cylinder or 6-cylinder), drive train (front wheel drive FWD or all wheel drive AWD), etc...
Step 3: Considering Financing Options
There are different ways to finance while getting a new car. You can finance with a bank or with the car dealer. The other option is to consider the financing offers advertised by the car manufacturers. As an example, toyota sometimes advertises 1.99% APR for three years on some cars or 0% APR for other types of cars. If you see offers like this, then go to your nearby bank, and see what APR they offer for the car loan. Most of the time the APR offers from the manufacturer will supercede the APR offers from many banks. If you know what your credit score looks like, then you can easily count on getting the manufacturer advertised financing offers from the dealer directly. But if you want to go with financing with other sources like a bank, then you need to aproach different banks to get the best APR.
Useful Tip: If you are hunting for the best financing options from banks or with dealers, approach your nearby bank first and pull your credit score once and ask for the best APR they are willing to offer. Make sure you get a copy of the credit score. From then when you approach other banks or dealers, use the same credit score to know what they can offer. Tell them they can run their own credit report when you decide to get the loan from them. Any loan officer from the bank should be able to tell you the APR you can be approved based on the credit report you already have. Once you finalize which source you are going to finance, then you can run your credit score with them for the last time. In this way you will end up pulling your credit report only once or twice.
Step 4: Finding the list of dealers for price negotiation.
Now you must select the list of dealers with whom you want to start the price negotiation. The dealers you select in the negotiation process should have the car you are looking for in their inventory to begin with. If they don't have your car type, then there is no point in negotiating. To find out if your nearby dealer has the car type in stock do one of the following.
For example..lets assume you want to find out about highlander 2011 model with v6 engine, black color.
1...Call up the dealership and ask them if they have any highlander 2011 model with v6 engine and what colors they have in stock. Sometimes you may end up finding a different color in stock with the dealer, if you are open to colors then you can shortlist that dealer on the list. Most of the times you may find dealers having different colors than the ones you would like to buy.
2...Another easier method to select dealers is to go through their website. Most of the dealership's inventory shown on their website is maintained directly by the car manufacturer, for example...toyota maintains the inventory of the cars available in each dealership. So it is highly likely for a dealer to have the car listed on their website available on the lot, unless it sells out before you arrive at the dealership.
Now that you know about the dealers near your location and the inventory from each dealer, you should have a list of dealers who are worth approaching for price negotiation.
Step 5: Understanding The Price Difference.
Once you start your negotiation process, you will end up recieving different prices for the same car from different dealers. Before making a decision on the best price from the dealership, you should know consider both the features and the price of the car at any instant. Two different dealers may have the same kind of car but the features installed on each car might be different resulting in slightly higher prices from one dealer to another. For example, dealer A might offer you $23000 for the car, where as dealer B offered you the same car for $23500, but the car from this dealer B has crossbars and alloy wheels installed on the car. This takes logical decision making from your part in deciding which dealer price is best.
Most of the cars on the dealership will have factory installed options, which the dealer wants to sell them as is. So prices from dealers may vary based on the features installed on the car. So it is always a good practice to compare the options on each car and the price at the same time.
Step 6: Price Negotiation with multiple dealers at the same time.
Before starting an effective price negotiation you should be knowing on which type/color/year/enginetype/drivetrain car to buy. Knowing these basic things will make your life easier and will help the salesmen to give you a better answer on your queries. You can expect dealers to quote you with higher prices to begin with so that there is room for price negotiation if deemed necessary.
To start the price negotiation process, go to the dealers website and get hold of their internet fleet manager's email Id. Lets assume a scenario where there exists four dealers A/B/C/D. When you first contact the dealer, you should try to specify what you wan't clearly and ask him what is the best price he can offer. An example of the communication is given below.
Note: If you have an old car to trade in, then tell the dealer that you have not decided whether to trade in your old car or not, since you may or may not need an extra car at home. Tell the dealer that you will make that decision later. The important point here is that you do not want the old car trade in price to decide your best offer for the new car. Our aim here is to compare prices between dealers with minimal variations.
When you are contacting a dealer for the first time, try something like this.
Dear Sir/Madam,
I went through your website and found that you have the following car available on your inventory. Can you give me the best price for the following car
Car: Highlander with 6 cylinder engine. Model Year 2011.
Color: Black
Installed Options: Carpet mats, cross bars, alloy wheels, ...
Financing: I am willing to put 10K down payment. The remaining I would like to get 1.99% APR financing for 2 years from toyota.
Drive Train: Front wheel drive
with regards.
XXXXX
Many people think that disclosing financing options is not a good idea in the begining, however the reason we recommend to disclose financing options is to avoid future discrepancies on the offer you will be getting from the dealers. Some dealers will give you a very good price assuming you will be paying everything in cash, once you select to go with that dealer and later you will find out that the dealer will increase his price by another $500 once he comes to know that you will be financing instead of paying the complete money in cash. This happens because some dealership will offer their own cashback rebates when you buy your car with full cash. So when you try to finance you are no longer eligible to get this cashback.
So it is always a good idea to keep things clear and free from discrepancies when arriving at the final negotiated price and financing plan with the dealer. Our aim hers is to totally avoid negotiating with the dealer at the dealership.
Once you send the same message to all the dealers, wait for atleast one day till you recieve the offers from different dealers. Lets assume you have offers from dealers A/B/C/D for $23000/$23500/$23400/$24000.
Once you get this information, you should analyze the price along with the included features on the car from all the four different dealers. After making your assesment, lets assume you selected dealer A offers the best price. Now contact dealers B/C/D and tell them that you recieved an offer for ($23000) from another dealer and ask them for the best price offer.
You can wite a reply email to dealers B/C/D like this...
Dear Sir,
I have recieved price offer 23000 from another dealer for the same car. Can you please send me your best offer.
I am interested in the following car:
Car: Highlander with 6 cylinder engine. Model Year 2011.
Color: Black
Installed Options: Carpet mats, cross bars, alloy wheels, ...
Financing: I am willing to put 10K down payment. The remaining I would like to get 1.99% APR financing for 2 years from toyota.
Drive Train: Front Wheel Drive
with regards,
xxxxxxx
Wait for another one day, now gather all the price information from dealers B/C/D. Lets assume you recieved $22,200/$22,800/$22500 from dealers B/C/D. It clearly shows that dealer B is the cheapest.
Now write another email to the dealers A/C/D like the following....
Dear Sir,
I have recieved price offer $22200 from another dealer for the same car. Can you please send me your best offer. I can show you proof if requested.
I am interested in the following car:
Car: Highlander with 6 cylinder engine. Model Year 2011.
Color: Black
Installed Options: Carpet mats, cross bars, alloy wheels, ...
Financing: I am willing to put 10K down payment. The remaining I would like to get 1.99% APR financing for 2 years from toyota.
Drive Train: Front Wheel Drive
with regards,
xxxxxxx
Now wait for replies from the dealers.
Step 7: Determining The Rock Bottom Price Range
Lets assume dealers A/D gives you $22000/$22100 for this car and dealers B/C replies to you by saying that they cannot go down any further and the best price they can offer you is to match 22,200. Now things get more interesting, since this is where the price is starting to get more aggressive, don't be surprised if dealers even say we cannot afford that price. The moment you start to get replies like that, or you see dealers backing off, then you will know that you are very close to reaching the rock bottom price and the price is not gonna get any better than this.
Typical Example:
Car: 2011 Highlander Base Model with V6 Engine, crossbars, tech package and tow prep package installed.
Original Advertised MSRP: $32000
Negotiated Final MSRP1: $28500 with $10K down payment and $18500 on 1.99% APR for 3 years.
Negotiated Final MSRP2:$28000 with full cash payment. $500 dealer cash rebate involved.
This buyer saved $3500 on the original advertised sticker price with financing or he saved $4000 for full cash payment.
Step 8: Adding Trade-in Offers To The Deal.
If you have any car to trade in, now is the time to get it involved. Since you already pulled down each dealer to the rock bottom price, take your car to each dealer with the email print out of their offer and ask them what trade in value they are willing to afford for your car. If you are not satisfied with the trade in price you are recieving, then try to sell your car under a private listing (example: selling in craigslist).
Step 9: Picking The Right Dealer Based On Available Offers
Once you recieve the emails from different dealers, pick up the one that makes the most sense based on the options installed on the car, financing acceptance/agreement, etc....Lets assume car from dealer A is priced at $22000, but the same car with full carpet mats and crossbars is available for $22100 from dealer C. Now the choice is yours. Eventhough you are spending $100 more with dealer C, you are getting a car with more usefull features. Also consider the trade in price you are getting for your old car, do the math yourself and decide on the best dealer offer.
Step 10: Complete All Negotiations Before Visiting The Dealership
Lets assume you selected dealer A to buy the car. Once you made your decision, you need to email your dealer and ask him for the final out the door (OTD) price through email. In this price, the dealer will include the car's MSRP price + TAX+ Document Fee and will let you know the final amount you will be paying before taking delivery of your car.
Make sure to get this detail from atleast 2 different dealers. Sometimes the application fees is also negotiable, and can be removed, but at these rock bottom price range you may find it a little hard to convince the dealers to remove the application fees. You are the best judge at this point.
Finally get the VIN number of the car the dealer is talking about in his offer and cross check the VIN number with the details given on the dealers website. When a dealer gives you a VIN number of the car you are going to see, then it should be available under the new car inventory section on their website.
Step 11: Final PrintOut Requirements
Your final email printouts should atleast carry proof the following information from the Internet Fleet Manager
Car Model and Year:
Color:
Options/Features Installed in the car:
Financing Arrangement:
Final OTD Price:
VIN number of the car you are going to test drive/buy.
Step 12: Final Test Drive And Delivery
You are at the verge of completing your car purchase now. Fix an appointment with the dealer where you want to buy the car and go to the lot and test drive the car you and the dealer have agreed upon. Check and make sure you are test driving the car with the right VIN number. If you don't like the car, then you can always walk-out and concentrate on the rock bottom price offers from other dealers.. But if you like it, then show no room for extra negotiation. Since everything is already agreed upon on the email conversation, so the dealer should be able to generate a purchase agreement for you that shows exactly the same OTD price shown on your email conversation.
We sincerely hope that this article helped our readers in their car purchase. If tou like this article, then please feel free to forward it to as many people as possible.
Have a nice day...