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Car Price Negotiation

It can be a horrible task negotiating to buy a new car, nobody likes doing it because it’s so time consuming, stressful and frustrating! Very few people actually like sales people, but it’s pretty easy to work out exactly what you should do. You need to research the background information so that you can get a fair price when buying your new car.

Research what the price of the car originally was when it first came out. You should use this to work out the dealer cost, which is the cost of the car when the dealer brought it from the manufacturer. This cost is made up of the dealer invoice, and the holdback.

The dealer invoice is the actual cost that the dealer pays for the car. There are many different online resources like the Kelly Blue Book, and Edmunds all of which can provide very useful information on the dealer invoices.

The holdback is the rebate that the manufacturer pays the dealer when the car is sold. The rebates will depend on the make and model of the car; it’s normally around 2-3% of the total value of the car. You should subtract this holdback from the costs to work out the actual cost of the car to the dealer.

Now you should calculate any hidden incentives that the dealer has. It can be difficult to know about the dealer incentives. If you are aware of any of the hidden incentives then you can talk about them during the negotiation.

Dealers seem to ask about $5000 more than they originally paid for the car, they do have to take their cut out of this, but even so $5000 is a little steep! Use the popular automotive websites and research exactly how much it costs, this figure will be very useful when negotiating.

Now you’re ready to propose your offer to the dealer, this is always a difficult situation and it can be made worse by your financial position. You should try to start at about $4000 less than the price advertised. Few dealers will listen to this, but let them raise your price a little, but it they still don’t want to sell it at that price then move on.

Some sales people have to go to their managers to ask permission about a certain price. This is just a sales tactic. Make them aware that you only want to talk to one person about your offer.

Many garages also make you wait for a very long time before they will actually tell you their final decision. If you’re not aware of this then it can catch you out. Make sure you’re prepared for a long wait; in fact try taking some reading material!

Sometimes dealers have a sneaky habit of advertising a very low price, and when you actually get there they raise the price. They can do this by adding on lots of extras, or just being unreasonable. Never accept this, no matter how small the price rise is.

It is not possible to negotiate on all cars; if they are more popular then it is much more difficult to get a discount. If you have tried a number of different dealers, but still get the same price, then you might as well go for it.

by Dennis James

Dennis runs Car Dealer Check which has independent Car Dealer Reviews written by the car dealerships customers and a Car Forum.

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