🚙 Tips on Buying a Car (from a former salesman)
by Joe · 35 things on Twos
- Negotiating up what they will give you for your trade-in is a lot easier than negotiating down their price - even if it’s a clunker.
- Dealers are limited on how much they can discount a car.
- Dealers are not limited in how much they pay for your trade-in and tend to give you more if they are hungry for the deal
- Taking the emotion out of a car purchase is the easiest way to get the best deal.
- So negotiating via email, phone, or text can/should be an option.
- If you lay out exactly what you’re expecting to pay and the amenities you’re looking for, then the worst they can say is no.
- Getting a financing check from your bank makes it that much easier.
- They tend to get you a lower rate, are not incentivized by you financing with a certain company, and do not “hold points”
- Holding points is quoting you a higher interest rate than what you’re qualified for, getting you to agree to the monthly price with the higher rate, and then adding extras to make up the difference.
- Also you are in NO WAY expected to spend the whole bank check. You spend any amount of it and return the rest for a lower monthly payment.
- Sales people are incentivized month by month.
- The end of the month is the best time to buy bc if they hit their quota they get a bonus.
- It’s a great way to get the salesman to work on your side against the finance managers bc he is incentivized by his/her own bonus at the end of the month.
- Same goes for rainy days, middle of the week, whatever you think can change the supply and demand.
- Don’t forget: it’s your money, not theirs.
- We’re talking about thousands of dollars here just by knowing what you’re doing.
- Do not feel obligated to do a deal just because the dealership wants you to.
- Sometimes walking away is the best negotiation tactic bc 7/10 times the dealer will call you and tell you to come back.
- If you’re getting the best deal, the dealership will make you feel like you just popped their ballon (aka they will not be smiling as you drive away).
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- Buy a Luxury vehicle >$40k:
- This vehicle segment has seen the MOST price deflation and currently has the lowest consumer demand.
- Dealers need to get rid of these vehicles. Fast.
- Trade-in a good quality, <$20k car:
- This vehicle segment has seen LEAST amount of deflation and currently has highest consumer demand.
- Dealers need these cars and will pay top-dollar for them.
- Pay cash:
- Don't take expensive financing in current high interest rate environment.
- The national average rate for a Used car loan is almost 10%!
- Dealers won't love this (financing is profitable) - but if you have some cash set aside, now is the time to consider using it.
- Last 10 days of December are a car buyer's fantasy:
- Sales are super slow so you have more leverage
- Aged units need to go before end of year
- Dealers extra motivated to sell because they need to hit year-end sales quotas
- Some of the most amazing used car deals are posted on NURSING HOME bulletin boards.