How Did We Save a Client $6,000 on Their New Jeep?
People just love going to the dealership and negotiating for cars! Can you sense the sarcasm in that previous sentence? Negotiating for a car is like going to the dentist – its a necessary yet sometimes unpleasant experience.
To ease the stress, we frequently purchase cars for clients and really blow them away with the deals they get. We started getting so much demand from non-clients that we decided to offer it as a service. People want to know how we saved a client $6,000 off of MSRP on their last Jeep purchase – a $29,420 MSRP car for only $23,420!
We love negotiating! Unlike the first sentence, this isn’t a sarcastic comment – we love negotiating because we are good at it! The thrill of getting an excellent deal drives us (no pun intended) to really get impressive prices. Below are some tactics we use.
- Know what you want: A salesman will definitely take you more seriously if you approach him knowing what you want. “I like that 2017 Audi S7 Prestige in Glacier White Metallic.” That statement is much more impressive than if you were to point to it in the showroom and say “I like that white one.” Knowing what you want makes the salesman much more inclined to believe you are a serious buyer that is ready to purchase today.
- Make the test drive count: It is far too common that people test drive the cars a dealer has out front and never drive the car they actually will be buying. This is a problem. In today’s cars, the higher trim levels have features that make them better to drive. For example, some higher trims have more sound deadening materials in the doors and acoustically insulated glass. They also have active noise cancellation (think Bose headphones technology) to quiet the interior. The more affordable models may not have these features. Drive the actual car you are buying to be sure it’s the one you want. Likewise, people who test drive cars are more inclined to buy. When negotiating between dealers, “I test drove that car and really liked it” makes you a more serious buyer. Dealers will be inclined to drop their prices for serious buyers to make sure they get the sale.
- Research and compare prices: This is a very overlooked aspect of the car buying equation. Someone might get excited when the salesman says “We are running a special today, that white Audi is $2,000 off!” Others would get skeptical because of previous research. “Only $2,000? The Audi dealer in the next town over has their car advertised for $3,000 off already.” Compare other cars for sale in the area and use that as a negotiating tool. Why does this work? Because now the dealer you are at needs to BEAT the other persons price just to KEEP your business.
- Find a car that is in-stock: A dealership has more incentive to sell cars that are currently on their lots. When cars sit on their lots, dealers have to pay more money to hold onto that inventory. Financing costs, storage, cleaning, damage, depreciation – all these things add up, and if a car doesn’t sell in 30, 60, or 90 days, the dealers will make more wiggle room to get rid of it. They may be willing to drop the price $300 today rather than risk another $500 in costs for the next 30 days.
- Be ready to pull the trigger: “I don’t know, let me think about it” doesn’t instill any confidence that there will be a sale today. (Dealerships always want to make a sale as soon as possible – again, the longer cars sit on their lots, the more money it costs them to hold onto inventory). Be ready to pull the trigger – “I’m ready to buy the car today and have the means to do it. My wife likes it and we both agreed that it would be a good addition to our garage. I just need you to meet me at my price.” Comments like that light a fire under a salesman to make a deal!
- Don’t actually negotiate: After doing your research, you can get a good grasp at what a good price will be for the car you want. Present your price and tell the dealer that you will buy the car today if they meet you at that price. (Note: if you present an un-realistic and low price, the dealer will know and never take you seriously – present a fair price to keep the negotiations going.) The dealer is then going to come back with an offer higher than yours (99 times out of 100). This is where you don’t negotiate – politely decline the offer and stick to your price. They will have to come back with another offer. If this process drags on, continue onto the next step below:
- Walk away if needed: Many people figure “That price is $800 more than I’m willing to pay, but I love the car and Ive already spent such a long time here that its not worth coming back another time.” Walking away is the best negotiating tactic out there. Leave your contact info with your salesman. If the deal can be made, they will call you. Be sure you commit when you walk out. Too many times people stand up and threaten they are going to leave – the dealer calls their bluff and keeps them at the table for another hour. Make your exit confidently and wait for a call.
- Skip the “Add-On’s”: So you got down to the price you want. Not so fast – its not that easy! Dealers will always try to sneak in some kind of “Dealer Prep Fee”, “Leather Protectant”, “Vin-etching”, and Extended Warranties. The only things that you should be paying for are the purchase price of the vehicle, tax, title, and license fee. Too many times dealers will include these “Add-on” items on the original offer and then claim that you “negotiated” their price down. Don’t forget what you actually came to negotiate – the car’s price. Get rid of the junk items and then concentrate on the price.
- Consider trading in your car: Too many times people ignore dealer trade in prices because they know they are too low. The dealer will always want to pay you less than your car is worth. However, because of taxes, you may still come out ahead. Example: You are buying a $60,000 car and the dealer offers you $30,000 for your trade in. You know you can sell it for at least $31,500 on the open market, but still come out ahead by trading it in. Why? That’s because you don’t have to pay taxes on the $30,000 that your car offsets. ($30,000 x 7% tax = $2,100). So if you trade it in for $30,000, you still come out $600 ahead!
In addition to the above tactics, we employ many others that chip away more and more at the MSRP’s of today’s cars. We know how to spot and negotiate with dealers that provide rock bottom advertised prices, but when you come in, they turn around and say you don’t qualify for certain rebates or offers. Our experience and contacts in the industry give us the edge to be the best! That is how we were able to save our client $6,000 off a new Jeep.
Save the stress and know you got a great deal – Let us do it for you.
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Woodfield Financial Advisors