Our visit this time will concentrate on the actual negotiation. Up to now, we have been focused on the different aspects of vehicle purchase – determining how much to spend, getting pre-approved for a loan (if applicable), figuring out what kind of vehicle is needed/wanted, and determining the value of the vehicle to be traded-in (if applicable).
This is what the old tire commercial refers to as where “the rubber meets the road” so to speak. Armed with your research, you finally sit in front of the salesperson as they put together their offer.
The one thing you should NEVER do: is make the FIRST offer. Automotive salespeople are skilled at gleaning information about you and your financial situation ever so casually. Remember that the vehicle you want to buy is one of MANY that must be SOLD for the dealership to be successful. The first offer that the salesperson presents says more about: 1. How serious they think you are about buying a vehicle today; 2. How badly they want to sell you a vehicle today; and 3. How important it is to sell that particular vehicle to you right now.
If the number is close to what you determined to be a fair price as a result of your research (i.e. you shouldn’t be paying at the top of your range), you can make the deal. Sometimes, its also good to “test” the number by seeing if they might go a bit lower (say $300 to $500 less than their “good” number) to see if you can sweeten the deal even more. Do note however, if the number they offer you up front is toward the low end of your range, trying to squeeze more may not be in your best interest.
The second thing you should NEVER do: Pay a deposit to accompany an offer. It is fine to leave a deposit once a deal has been made and accepted (Usually not more than $500). Make sure that the offer as accepted has written on the offer “Purchase subject to a mechanic’s inspection”. This must be agreed to before any money changes hands – ESPECIALLY regarding a private sale. If the vehicle does not pass muster with your mechanic, you have the right to cancel the deal and get your deposit back. If the dealership or private seller balks at this – walk away!
Do THIS – Get it in writing: This makes NO DIFFERENCE if you are making this purchase from a dealership or private sale. If there were promises made – i.e. about a repair or including something extra, it needs to be on the offer form or bill of sale. Only the written promises/commitments are binding. If its not written, its not true. Also, since this is a lower priced vehicle purchase, you will most likely see the words “VEHICLE PURCHASED AS IS”. This means, the MINUTE you receive the keys and drive off the lot, anything that happens is your problem. There is NO recourse from the dealer. Sometimes a dealer will offer you some short term guarantee of 30 to 90 days – often at no charge. READ THE FINE PRINT! Often it means they will pay for the parts, but you might still be on the hook for the labor. Since those short term warranties are backed by the dealer you purchased the vehicle from, they are usually the ones you have to bring the vehicle back to under the terms of the warranty. Do realize that a private seller will offer you NO SUCH PROTECTION! All the more reason to have that vehicle checked out before making payment in full.
Just say no – Even after you have made your deal, a dealership may try to make extra money from you via “add-ons” like extended warranties (usually offered by a 3rd party, not the dealership or the manufacturer), paint protection, fabric protection or other sundry additional cost items. Chances are that if there are extras that you want, it’s often better to shop around first.