The most important leverage you have, and shouldn’t be afraid to use is the power to walk away from the sale.
You’ve made the decision to buy a new car. Congratulations! Unfortunately, visiting a car dealership can sometimes feel as though you’re throwing yourself into a pool of sharks. As soon as you step foot inside the showroom, the salespeople begin to circle.
So, how do you avoid coming off as unsuspecting prey in the vicious world of retail markups? There are a few sure-fire tips that will help you dodge the high-pressure sales tactics and avoid getting ripped off.
Do your research
First things first: Know what you’re looking for before ever entering the showroom. There are a number of variables that go into deciding on the right car to fit your needs. Do you want new or used? Do you need the space of a family-friendly hatchback or are you in the market for something sporty?
Choose the make and model that best suits your lifestyle, or at least narrow your options down to just a few. Then do some research into the sticker price for your desired vehicle — the set retail price for a vehicle. If you check out the website for your closest dealership, often they put their vehicle inventories and their sticker prices online. That way, you can know the starting point for the sale from the comfort of your own home.
Next, do some research online to find out the invoice price (the price the dealer pays for the car). You want to aim as close to the invoice price as possible, as that’s the actual cost of the vehicle. Shoot for something reasonable — a dealer often won’t even consider any offer that gives them less than a five per cent profit on a car. After all, a car dealership is a business.
Take your time
Once you’ve researched your vehicle and are ready to take it for a test drive, make a visit to your local dealership. But don’t give in to the sales department, which will make you think any sales or deals won’t be there the next day, and that you need to buy immediately to get the best price. That simply isn’t the case. Check out a few dealerships in your area and take your time.
Stand your ground
Before you make your way to the dealership, have an idea what you want to offer for the car of choice — and stick to your guns. Don’t budge more than a few hundred dollars from your offer or be prepared to be at the mercy of the sales department. Try not to show emotion. Stay cool, calm and collected, and leave any frustration at home. If you’re firm, the salesperson is more likely to offer you an alternative or meet you part way and throw in some extra for free.
Be prepared to walk away
The most important leverage you have and shouldn’t be afraid to use is the power to walk away from the sale. You don’t need to buy the vehicle exactly at that moment, and if the salesperson isn’t compromising, walking away shows the dealer you mean business. Often the salesperson will prevent you from leaving by meeting you in the middle. If not, then any deals they did offer will still be there tomorrow.