What's the single most important thing to know if you want the best deal on a car from a dealer? Whether it's a new car or a used car, you need to try to approximate what the vehicle cost them. They have to make a profit or they don't eat. At the same time, you want the best possible deal.
If you're looking for a used car, you can get a great idea of what the dealer has invested. Just visit your banker and ask him/her to help you look it up in the NADA (National Automobile Dealers Association) book. Get both the "Average wholesale" and the "Average retail" value of the car in question. Assume that they paid no more than the "average wholesale" price. Assume, too, that they'll have to make between 10% and 15% profit or they won't sell it to you. Expect them to tell you a version of, "Someone else is looking very seriously at this vehicle and they may come in tomorrow to buy it." To which, you reply, "Good for you...I hope you sell it that quickly. If they do, I'll find something else." Now give them your name and phone number, make them a reasonable offer and when they say, "we just can't do that--it's just not enough," you say, "OK, but if you change your mind before I buy something else, my offer will still be good. Once I've purchased something else, the money's spent and it's all over." Then get up and walk out. At this point, you MUST remember this: the next one who speaks, loses. Chances are they won't even let you leave the lot, but even if they do, chances are good they'll call you in a day or two to accept your offer or at least to try to get you to move up. Hold firm--next one who gives, loses. If you made a reasonable offer, most of the time, you'll get your car at a reasonable price.
If it's a new vehicle, the task is far more difficult. Here you must look for what dealers are paying--don't be fooled by the "dealer invoice" they'll show you...chances are it's not real. You must also search the web and talk to your banker--and anyone else who might know--to look for dealer rebates and special deals paid to the dealer by the auto manufacturer. Why? Because you want to make your offer based on how much the dealer pays for the vehicle less any sales bonuses, end-of-year rebates, allowances, service allowances, warranty allowances, etc. When you're pretty sure you've figured out what the car is going to actually cost the dealership once they've sold it, treat it just as if you were buying a used car--see the paragraph above.
Know the main steps that will be used against you at the more aggressive and/or less honest car dealers. The dealer will, in most cases, use "ABS" (always be selling). Watch for this. "Isn't this a beautiful car?" "Isn't this a great color?" "Don't you love the chrome wheels (or whatever)?" Etc., etc., etc. The idea is to keep you saying, "Yes," until you fall in love with the vehicle. ABS is a standard sales technique used to talk you into thinking you can't live without this particular product, be it a car, an igloo in Alaska, or sand in Florida. Then there's "Create a sense of urgency." That's the bit where we have someone else who's about to buy this particular car you want right out from under you...99% of the time, it means nothing. And there's the, "This is a one-of-a-kind vehicle. Miss it and you'll never find another one like it." It may not be stated that strongly, but it's a common push to help get you to sign on the line. Again, 99% of the time it means nothing and you can find another vehicle(s) like the one you're looking at pretty easily. (If you know it really is a collector's item, well, you'll have to know what you're doing and you're on your own.)
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