Do your homework! (Part 2 of 2)
One of the biggest complaints women have about auto dealerships is that the salesman was condescending or treated them like complete morons who don’t know a thing about cars, and tried to sell them low-value services they did not want.
The internet, and the plethora of information it holds, is one of your three greatest weapons in your car-buying arsenal. The other two are your mind and your feet.
You’ve done the math and know what you can afford. Now you must find a car that meets your needs, and hopefully a few of your wants, within your price range. Dealer mark-ups can be as low as 5% on less expensive makes and models to 10% and up on luxury cars, so there will be more negotiating room on a top of the line Mercedes than on a Toyota Celica. A good target to aim for is dealer cost (invoice price) + as few percentage points you can negotiate. Shoot for 3- 4% max. That means on a car that costs the dealer $22,000, you’ll want to pay around $22,660-$22,880, or as close to it as you can get.
Mark-up may also be higher on wildly popular or hard to get makes/models, and it may also vary by the region of the country in which you reside. For models on which there is little “wiggle room” on price, you can always negotiate for cheaper pricing on future services, such as oil changes, tire rotation and other routine maintenance.
Your favorite search engine will reveal numerous sites that can give you an idea of dealer cost for most makes and models, so you’ll be able to calculate anticipated mark-up and plan your negotiating approach. Cars are products, after all, and it doesn’t matter so much which dealership you buy from, since there are thousands of your make/model available at any given time, it only matters how much you pay.
Search internet sites for reviews of the worst selling vehicles of the year and see if any of them come close to what you need. It may be they are not bad cars, they just didn’t sell well. At this time of the year there will be a major effort to move that inventory and make room for next year’s models, resulting in good savings for you!
You’d be surprised the extent some dealers will cut prices to move product. Buy at the beginning of the month from an eager beaver salesperson who wants to get a jump on their monthly sales goal and at the end of the month to take advantage of sales staff who desperately need a sale to meet their monthly target.
Also check best used models and sales from car rental agencies such as Enterprise, Alamo and Hertz. It is possible to find the perfect vehicle online!
We no longer need to visit a dealership to form opinions or check features. At the start of the process, six out of ten buyers don’t know what vehicle to buy. They may start by asking any car-obsessed friends for an opinion. Then move on to reading internet reviews, or online forums to get ideas. Just in the past year, YouTube has seen a huge surge in searches for car review and test drive videos.
Fuel efficiency used to be one of the most searched terms in years past, but interest in that feature drops with the price of oil, which today is cheaper than in the past several years. Today’s buyer is hungry for hauling and cargo capacity with searches for “trunk space” and “towing capacity” growing by 15% and 30% respectively year-over-year.
Marketing research also shows that searches for pictures of specific brands have increased nearly 40% over last year, with 80% of inquiries coming from mobile devices. Interest in the terms “MSRP” and “list prices of” specific models is up 25% to the highest levels ever. “Trade in value” hasn’t been this popular since the 2009 program Cash for Clunkers, and we’re now looking to spoil ourselves with luxury features such as panoramic sunroofs (up 31%) and back-up cameras (up 23%).
The days when buying a car meant visiting dealerships that only sold one make of vehicle are long gone. The average car buyer today only takes two trips to a dealership because they can get all their questions answered through internet research or other means. Usually those two visits to the showroom come after the decision on the make and model of vehicle and its features have been made and the buyer is ready to take a test drive, a topic we will cover in Step 2 of how to score your best deal.