It's not the easiest thing to do if you want a good deal. Below are few things you might want to do if you are looking for a new car:
- Find the car you like. Check the reliability, design, etc. of the car from users' and editors' reviews. Some useful websites: Edmunds.com, usnews.com, truecar.com, consumerreports.org, etc.
- Decide how long you would want to keep the car. To my knowledge, Honda is the most reliable followed by Toyota. European cars are fancier and also expensive to maintain. American cars are generally viewed as less reliable. Honda and Toyota depreciates slowly, but others generally loose their value fast, especially the initial few years.
- Understand the car pricing schemes. Cars are generally sold below their MSRP value (sticker price). Invoice price is what the dealer pays to the manufacturer for the vehicle. Their might be some hold back money that dealers will get from the invoice price. Generally speaking, if you can get the car for close to invoice price, you got a good deal. You can check the invoice price of a car from some of the previously stated websites. Interestingly, you can find the invoice price for a specific car (VIN number) through some websites (~$15).
- Get ready to spend good amount of time in the dealership. Negotiate, negotiate, negotiate. If you are not sure, you can go back home and get back to them. That's often the best idea even if you are sure that something is a good deal. However, some salesperson might tell you that you would not get the same deal if you leave the dealership. You might get similar deal from neighboring city or not. It's entirely up to you to decide whether the salesperson is really serious about the one time deal.
- Dealers are often ready to thrown in some goodies to close the deal: few more years of servicing, free car wash, additional discounts. Some will tell you they can either give you good discount or ongoing low interest rate. However, they can combine those two if you negotiate well.
- Get ready to get a very very low trade-in value. They make good money from vehicles that are traded in. Could be a negotiation point that is often forgotten by buyers.
- If you would be financing and there is no 0% financing from the dealer, talk to several banks or credit unions and get interest rates. Dealers might find the best interest rate for you, but they might add a percentage and give you the higher interest rate.
- I barely found anyone recommending to get extended warranties (paint, maintenance, gap, tire, etc.) for a new vehicle. However, the finance guy will almost intimidate you that it might be the worst decision in your life. If you really want to, you might get those when your existing warranty is about to expire (maybe six months before. I would assume it to be slightly expensive, but not too much.
- Dealers often include some accessories you may not care about such as mud guard, etc. They claim those to be quite expensive, probably few times its actual value. It could be a good negotiation point. Also, make sure if you have those add on such as cargo mat listed for your vehicle, make sure, those are actually there when you leave the dealership.
- Don't give your numbers, let them give you the best deal. If you can, you might visit several dealers offering the same vehicle and compare their best offers. You can call them back about the best offer they received and see if others can offer better ones.
- Some believe that going to the dealer late on weekdays might motivate the salesperson to be more flexible. They would love to make one final deal for the day.
- Unlike popular belief, the dealers do not make much money out of the new car sale. They make more from used car and services department.
- Good luck!
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