Now that you have been able to determine how much the dealer paid for the car and you’ve figured out your 3% – 5% fair profit offer, you are in a much better position than most new car shoppers. If you know somebody that has recently purchased a car, ask them to share their paperwork so you can familiarize yourself with the buyers form. You will know how the forms work so you won’t be intimidated when it’s time to close the deal. The dealer’s paperwork can be very confusing by design.
Don’t Negotiate a Car Deal Based on Monthly Payment
Doing this will open you up to the “Cash Flow Shell Game.” You must negotiate the price first, then the financing. Be especially careful when a 0% APR deal is going on. Make sure to stay focused on the purchase price at all times.
When Car Shopping Don’t Be an Impulse Buyer
If you let your impulses take over at a car dealership it will cost you a lot of money. You can always buy tomorrow or a week from now. Take your time because good things come to those who wait!
Wrap Up the Negotiation with the Salesman Quickly
Try to complete the negotiation in a half hour. Much longer than that and it isn’t worth the salesperson’s time to give you the best deal since they will end up with as little as $50 commission. Set your “deal timer” for 30 minutes. Tell them if the deal isn’t agreed upon when it goes off you will leave.
Negotiate Up From Dealer Cost and Not Down from MSRP
Remember from the last chapter that Invoice Price is not the actual Dealer Cost.
Once You Make Your Offer, Stay Strong
Use the research in “The Folder” to justify your offer and stick to it (if you offered a 3% profit you can come up to 5%). They’ll shout at you, call you names and accuse you of stealing from their kids. This is part of the dealer’s game so don’t agree to “split the difference.” You should never end up more than a few hundred dollars over your fair offer
Never Negotiate a Car Deal on an Empty Stomach
Before you go to negotiate eat a good meal, make sure you are rested and dressed comfortably (but nicely). Do not go car shopping if you are sick, have a fever or a headache. You want to be on top of your game at the dealership.
Bring Another Person With You to the Dealership
Having a second person on your side keeps the salesperson from being able to intimidate you. Strategically your partner should be a doubting Thomas, devil’s advocate, constantly pointing out negative parts of a deal, trying to “talk you out of it,” saying you should go back to the other dealer.
The Power of Walking Out
If you aren’t satisfied with the way the negotiation is headed then just get up and leave. This is the power that you have and it will panic them once they see you are serious. You might be halfway to you car when they stop you with a better offer.
Never Give a Deposit Until the Deal is Done
Unless you have agreed to everything and are buying the car there is no reason to give any money. It does not “show that your offer is serious,” all it does is let them hold your money hostage. If you are ordering from the factory then a deposit is proper once the deal is signed.