I'm no expert, but I've bought quite a few new cars over the years and these are some of the rules I follow.
Tips to the noob car buyer
1. Do your homework.
Research all available resources and know the actual invoice price for the car you intend to buy and the realistic value of your trade-in (if you have one). Find out before you go to the dealer whether there are cash, financing, or other incentives.
2. Thoroughly inspect and test drive the actual car you are going to buy before you enter any negotiations.
3. Remember: You are in charge of the negotiations.
The dealer needs to sell the car. That’s how they stay in business. You may need a car, but you don’t necessarily need THAT car.
4. Don’t settle.
Never take less for your trade or pay more for the car than those values that you went into the dealer knowing (See item 1). If the dealer won’t give you what your trade is realistically worth then the price of the car will have to come down to compensate. It’s the difference you’re paying, new price vs. trade, that’s important.
5. Always be willing to walk away.
Not too quickly, but there are lots of other dealers and other comparable cars out there. Don’t show too much emotion and fall in love with a car. Showing a need puts you in a compromising negotiating position. Show that you may WANT to buy their car but you don’t NEED to buy their car. If you don’t get the deal you went in looking for…try somewhere else.
6. NEVER sign any agreement or place any deposit/down payment until negotiations are over and the FINAL pricing including finance rate is agreed to.
Again, the dealer needs to sell you the car. The only time I have put any money up-front was when I special ordered a vehicle from the factory. Even then I only put down $500 and secured the whole deal prior to the order contingent on approval of the vehicle on delivery. The vehicle was delivered about three weeks later. Inspect, test-drive, and then signed the papers and finalized the deal.
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