How to Buy a New Car for Less

How to Buy a New Car for Less | eHow.com

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   How to buy a new car for less? First, select the make, model and year of the car you want. Then go to an internet automobile research site and determine the invoice price, i.e. the price the dealer paid for the car. This is the most important piece of information you need to negotiate the purchase of a new car. MSRP is meaningless, so ignore it. Then go about securing your funds. Make sure you have the cash to pay the car in full up front, or go to your credit union or bank to make sure you can qualify for an auto loan. Shop around for good rates, and get your financing in order before you get to the auto dealer.
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   When you meet the salesperson at the dealership, they will first want to talk about the car and ask you to test drive the car. Once the test drive is out of the way, they will ask you if you would like to talk price. They will likely ask you how much you can afford in monthly payments. Do NOT answer this question.
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   Tell them you want to negotiate the total price of the car and that you will take care of your own financing. Then have the salesperson break down the price of the car. Make sure that they use the same invoice price as you, and go on the internet with them if necessary to show them the correct invoice price. In addition to the invoice price, there will be a destination fee, document fee, taxes and profit. Taxes cannot be avoided. Destination and document fees are normally charged. So it should all come down to negotiating the dealer's profit.
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   What is a fair profit? How low can you go? Here is where you need to make a judgment call. Being an aggressive negotiator can get you the great deal, but it can also prolong the process in buying that new car. In my opinion, a 2.5% profit based on invoice is fair. Once you determine what you are willing to pay, stick to it. If they are not willing to meet your price, do not be afraid to stand up, thank them for their time, and walk out. Remember, you must be able to walk out of negotiations if you reach an impasse. Otherwise, you will be forced to accept their offer. Once they see you stand up and thank them for their time, they will know that you cannot be moved and will work to meet your price if they really want the sale.