First thing you need to understand is that the car dealer is there to make money out of every single piece of the process. From $400 dollar protective door stickers to GAP insurance. Every part of that industry is about getting you to finance as much of their garbage as they can. This guide will help you break the process up into pieces so the dealer doesn’t end rip you off.
Secure Your Own Financing
The dealer has incentive for you to agree to a higher than normal financing. Some will get kick backs in the form of cash from the banks. Go to a trustable credit union and get approved for financing. They will approve you for a maximum amount and tell you the exact interest rate. With this you will know what your credit is worth.
When the dealer attempts to tell you that you’re interest rate will be an industry standard 8% you can tell them you have your own financing at 3.09%. If the dealer can beat that rate, excellent! If not or they try to use their rate to deny a discout. Then use your own financing.
The key here is that you have a set in stone interest rate that is FAIR.
Know The Value Of Your Trade-In
Get more than one cashable offer for your car. Whether it’s CarMax, Carvana or any of the dealers that are willing to pay you cash, get an offer and use that offer in your negotiation. If they can beat that offer, great, if not get your cash from the other dealer.
When you trade in your car to the dealer that you are buying from, they will use the value of that car in their negotiation. This includes refusing to discount the car stating. . .
“We’re already giving you a lot for your car”
If at any point they tell you they can’t remove a addon or discount the car because of your trade in value, let them know that simply won’t trade it in then. Buy the car without the trade-in and sell you old car the next day with the cash offer you received.
The key here is that you have a set in stone trade-in value that is FAIR.
Sell Your Car Instead Of Trading It In
If you are not in a crunch for time. Find out what your car is selling for at a dealer, list your car at that price on your own in any of the market places. Make sure that you do not accept lower than the offer your received above. If CarMax is willing to pay you $21,000 you should be able to sell it to someone for $23,500.
You can still sell a car that you owe on. Contact your current lender, or a nearby credit union to facilitate this task.
Start Your Negotiation With Zero-Down
The more money the sales team thinks you have in your pocket, the less likely they are to back down on the additional fees and up sells. They are even less likely to discount the car. Don’t tell the sales team, tell the guy in the very end that collects the signature for the contract. This is usualy the finance manager or finance department. They will first try to up-sell you on some stuff, when they are done with their pitch and are ready to print out the contract, hit him with the . . .
“Can you show me what the payment would be if I make a $2000 down payment now.”
At this time, you’ve already fought off the GAP, the service agreement and the extra layers of clear coat. The finance manager will have no choice but to simply re-run the numbers.
The key here is to force them to bring their costs down to make the deal happen before revealing that you have a down payment.
Don’t Pay For Anything That You Dont Wan’t
They are probably telling you the truth when they say they can’t take off the protective stickers, but that doesn’t mean you have to pay for it. It might be a grueling process in negotiation. But you can drive home with those protective stickers without paying for them.
“I understand the paint protection is a good deal. But i’m not on the market for paint protection. I wouldn’t pay for it even if it was only a dollar.”
Walk Away If You Have To
If they can’t meat your terms, write down you name, number, monthly payment AND term length and wish them a happy day.
“You know, I think we’re really close. But it doesn’t seem that you want to budge any more. Here is my phone number, my desired montly payment AND the length of the loan. Call me when you can make this happen”