How to Pay Less for a New Car

There is nothing more intimidating for most people than purchasing a new car. Working with car salesmen can be a mind-numbing process, and getting talked into a terrible deal is a real danger. A year ago, I walked into a Mazda Dealership and purchased a brand new Mazda 6 over $6000 under invoice. In this article I outline the techniques you can use to do the same thing yourself.

Instructions

Difficulty: Easy

Things You’ll Need:

• Calculator
• Computer w/ internet access
• Notebook and a pen
• Courage and Resolve

1. First - decide which car is right for you. Sources to research specs, features, and pricing include: Automobile, Car and Driver, and Motor Trend magazines. The internet is also a great research tool to find the make and model that is right for you. Try Automobiles.com, CarPoint, Edmunds or Kelley Blue Book - all of which have search features and also offer their own Reviews.
2. Once you have decided which vehicle is right for you, the next step is to find the best deal. This means that while you know what *kind* of vehicle you want, you may need to be flexible on what make. Visit each website for every car manufacturer out there. Ford, Chevy, Honda, Toyota, Mazda, Dodge, and Subaru for example. Check what incentives and deals the manufacturers are offering - especially what discounts they are offering for last years models.
3. Visit the Dealerships virtually. Once you have a list of the best Manufacturer deals, visit the online webpages for local dealerships that sell that make. Often, on top of any deals for last year models, dealerships will additional offer a discount to internet shoppers. Make sure to jot down whatever discount code they provide, or send them an email and ask how you can take advantage of their online discounts.
4. When you walk into the dealership, you should have a list with you of all of the discounts available for the car you want. All you have left to do is test drive the cars. Purchasing last years model will often get you enormous discounts, because you are willing to accept from 30 to 300 miles on the odometer. Let's face it - the car is still new! Test drive the cars and decide which one on the lot has most of the features and qualities that you like. Once you decide, make note of the window sticker price.
5. Getting the deal - When you sit down with the salesman, the first thing to do is to point out that you've been shopping for similar used cars in this price range, but because of the discounts offered off sticker price, you are willing to buy a new car from this dealership. If the sticker price is $24,000, and you know that there is a "last-year-model" incentive of $1000, an online discount of $1000, and a financing incentive of $500 (total discounts of $3500), make an offer $4000 under the sticker price.
6. Watch them dance: This stage is inevitable, no matter where you buy. The salesman will make a show of going to talk to the manager and "begging" for your deal. He will make you feel as though you are driving a very difficult and unreasonable bargain. Stand your ground. Eventually they will come back with an offer that is more in line with the sticker price minus discounts, and might even lower the price a little below discounts.
7. Haggle or Buy? This decision is up to you. Usually their counter-offer is only a little higher than what you offered, but typically it takes into account all known discounts. So most people will do okay with accepting at this point. If you want to haggle $100 or $200 more out of them - act as though it's a better offer but still difficult considering the great deals you saw on other used cars similar to this car. The salesman will ask for specifics on those other cars, just say you saw a lot and scribble in your notebook as though you're trying to calculate numbers that work for you. Then state that it's close to another car you are considering, but you are willing to buy the car *today* if they will lower their offer by $200. 9 times out of 10, they will. AVOID talking about "payments"...focus on the overall price.
8. At any time during the process, if they are not cooperating at all, or not willing to come down in price at all - do not be afraid to walk out the door. Simply thank them and walk out. There's no harm in it, and there's no shame. And you'll save yourself thousands of dollars doing so.
9. Once they accept your offer, keep in mind that the finance phase is another scam. You might have had to agree to finance through them to get a discount, which is fine. Just make sure that you *only* finance the price you've agreed to without any extra fees (except maybe minor documentation fees). Turn down all extended warranties or "protection" plans. Nothing they can tack on to the price will be worth it. If you've agreed to finance at a high rate to get a discount - you will be refinancing the car in a month or two anyway.
10. Pick up the Car - Once you're through financing, they may send you home while they prep/clean the car for pickup. There is no better feeling than driving out of a car dealership in your brand new car, at a price that you know is far below sticker. You will feel good about it, and will take pride in your new car for years to come.