Be aware that if you push up the price of a new car too high, some dealers may try to find profits elsewhere in the deal. For example, a dealer may set a lower discount or include an extended warranty on a sale. So beware of underpriced prices. If the dealer offers you a car for less than the invoice price and there is no incentive to explain it, take note.
Now that you know how good the car price is, let’s take a look at the rest of the deal and what are best car deals.
Rewards and kickbacks
Best car deals have become an important part of car buying in recent years and can save you thousands of dollars. This group of savers includes customer cash rebates, low interest financing and leasing deals. It also includes “dealer cash,” an implicit incentive described on Edmunds.com as “manufacturer to dealer.”
Check the discounts and incentives available in your area and make sure the dealer correctly applies any incentives you are eligible for to the purchase price. For customer cash rebates, the rule of thumb is to negotiate the lowest price and subtract them.
The trade-in price
Yes, it’s very convenient to trade in old cars at the dealership. But many shoppers who look only at the price of a new car waste thousands of dollars by accepting too little of a trade-in. Determine the value of a used car by looking up the TMV trade-in price. When calculating the TMV trade-in price, remember to include all options on the car and its range. Be realistic about the condition level. Few used cars are “outstanding.”
Also remember that you don’t have to trade in cars. You can sell it to private parties and usually get more money than the dealer will give you. You can even bring it to CarMax for a price that sometimes exceeds the dealer’s trade-in offer.
Legitimate and bogus expenses
Dealers charge only three fees: state and local sales taxes, a reasonable documentation fee (also known as a “documentation fee”), and a motor vehicle registration fee.
In some states, documentation fees are limited by state law. When these costs are not controlled by the State, there will be a local document average cost price. Call some local dealers for current exchange rates. In Arizona, for example, the cost of documentation is $395. Florida is also known for its high documentation fees.
Some traders will invent their own fees with official names and add them to their contracts. You need to find out about these charges as soon as possible, as these extra charges may be enough to convince you to shop elsewhere. Many of these fees range from $200 to $400 and come with names such as “dealer ready”. Sometimes it’s just an abbreviation, like “D&H.” For popular or recently launched cars, dealers may try to add “market adjustment” fees that can run into thousands of dollars. These extra costs are negotiable.
For more information about more fees, read “What Should You Pay?”
Best car deals financial
Smart car buyers buy loans at the highest interest rates long before they go to the dealership. Getting pre-approved financing from an independent lender is a good idea, especially if you are a person with poor credit. You can then head to the car park with a blank check (whose lender has set up a line of credit) and negotiate as the buyer of cash. The dealer may still be able to exceed the lender’s pre-approved interest rate, but with this loan, you have a good bargaining chip.
Now that you have settled on a good price, you will enter the Finance and Insurance Manager’s office to complete the transaction. This person may provide you with many other products and services.
For example, an extra alarm system, a $275 “spray paint protection kit” or a $100 device for embedding the vehicle identification number into the main parts of the car. Extended warranties can be valuable, but dealers will often significantly exceed their wholesale price.
Other factors to consider
After you have completed all these transactions, it is recommended that you consider some intangibles. For example, customer service is very important. Do you find sales people responsive, knowledgeable, and efficient? Are you confident that, even after the transaction is completed, he or she will redeem the transaction and continue to respond to your needs?
What about the dealers themselves? Is it part of your community? Is it convenient for home service? Given the importance of these other issues, you might decide it’s worth paying a few hundred dollars more for a car.
It’s worth asking yourself your time before you make another round of calls asking for a bigger discount or competing with a dealer. If you think you can still save $1,000 or more, go for it. But if you’re going to negotiate within a narrow range and you can save up to $200, ask yourself if it’s really worth it. Saving that $200 could mean taking longer to get on the bus or negotiating a long negotiation with the sales team. Either way, your vehicle delivery could get bogged down.
The whole package
The purchase price is just one of many factors that can affect how much you actually spend on your new car. If you know what to look for in all aspects of a trade, you can be like a chess player, who is always looking for a few steps forward. You want to negotiate a good deal in all aspects, not just the price.