Dealing with the dealer - the right way!
The number 1 cardinal rule to follow in dealing with the dealer is to stay in control. If you ever feel you aren't in control - leave. Never allow yourself to be rushed into a decision, because that's when all the work and research you've invested in the process is likely to be lost.
In fact, buying on your first visit is probably not a good idea. Time is your friend. And remember that buying the new vehicle, selling the old one and financing the purchase are three separate transactions. So here's the recommended process, step by step:
1. Gather up and write down your research findings: The trade-in value of your vehicle, if applicable; Your available loan cash and any downpayment cash; Dealer cost on the vehicle you like.
2. Shop at more than one dealership, and be willing to consider comparable or competing vehicle brands to increase your bargaining leverage.
3. If you have a trade, ask first to have it appraised. The dealer won't like this, but insist anyway. Remember - you're in control here. If they offer trade-in value or higher, great. If not, you may want to consider selling it yourself, or selling it to one of those three dealers you visited before to get an offer.
4. Make an offer on the vehicle you wish to buy. Now you have to expect there will be back and forth negotiations on price - so start at the dealer's cost or lower. This puts you in the favorable bargaining position you want to be. You can be sure that the first counter offer from the dealer will be thousands of dollars higher than your offer, but don't let that bother you. Your counter should be just minimally higher than the first offer. Get the idea? Your goal is to buy at or below that maximum amount you set.
5. Be willing to raise your offer a time or two, but not by much. Be ready to walk if you're not getting anywhere. There's another dealership down the street, and salespeople get much more agreeable when you head for the door. If you reach agreement, get it in writing. Your written agreement must also state the previously negotiated trade-in price. Only now should you agree to any requested deposit.
6. Now the finance manager will take over - and try to sell you warranties, so-called protection packages, and anything else profitable. Some will be of questionable value. You'll also be pitched dealer financing, and maybe even leasing. The simplest way to handle this is to just ask for a completed contract so that you can compare it to the credit union or any other lender you desire. Your credit union will be happy to give you such a sample contract, and to help you compare offers. If we cannot beat the dealer's offer, we'll tell you so. If the dealer refuses to give you such documentation, what does that tell you? If they really do have a better deal, they should be happy to give you these figures - in writing. The bottom line is this: compare financing contracts based upon the total cost over the life of the loan.
Follow these steps, and you can be assured of getting the best value on your purchase and the best financing deal as well. Wasn't even that hard, was it?
