The Most Important Skill When Negotiating a Car’s Price
When it comes to negotiating the price of car, you’re going to need to be fearless.
What do we mean by fearless? We mean several things:
- You will enter the negotiation with an approved car loan.
This means it’s you know exactly how much you can spend on the car. This is not being pre-qualified (which lets you know that you can take out some kind of loan, still to be determined for how much), it’s a loan that details how much the lender is going to give you for a car.
Going to buy a car without an approved loan leaves you vulnerable to buying more car than you can really afford because there are all sorts of ways a car dealer can arrange financing to give you “affordable” monthly payments. But because you’ve just bought more car than you really can afford, your loan may be at a higher interest rate and/or could be a longer loan (longer than three years). Which means you’re paying far more than you intended.
- You will have researched the cars you can afford and decided on one or two different makes or models. No more. And you will stand firm.
You start searching for a car before you ever start looking at them in person. You take a look at the Kelley Blue Book to see which cars fit your budget and which offer you the best value.
You will write down the types/price of the cars you’re looking at and you will not consider any other car. In other words, you will not fall in love with a car.
- When the salesperson asks you “what kind of monthly payment are you looking for, you will not answer.
Instead, you will say, “We can discuss monthly payments later. I’m looking for a used Honda or Ford sedan with no more than 50,000 miles and for between $12,500 and $15,000.” And then you will be quiet and see what the salesperson says/does.
If he or she tries to steer you to a Toyota that “just has $16,500 with 55k miles,” repeat that you want the Honda/Ford, etc.
And now for the most important car loan negotiating skill:
- You will walk away if you can’t get the deal you want
In other words, never fall in love with any particular automobile. It’s just a car, a vehicle to get you from here to there. It’s also expensive and you need to be fearless in going for the car you want and can afford.
If the salesperson can’t do that for you, walk away. There are thousands of used and new cars available to you today; you will find the car that’s right for you and your financial circumstances.
And, as you walk away, don’t be surprised if the salesperson comes after you with a better deal; walking away is so very powerful because the salesperson often needs you to buy the car more than you know and could be more willing to work with you once he sees that you’re truly willing to walk!
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