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How to Negotiate with a Car Dealer (Part 1)

There's an old saying that 'you don't get what you deserve, you get what you negotiate'. It's especially true when you're buying a car.
Car salespeople negotiate for a living. Their job is to sell you a car for the best price they can get, even if it's a lemon. It's crucial to understand how to negotiate with them, so you can get yourself the best deal.

Be prepared

The best thing you can do going into a negotiation is to be prepared. In other words, do your homework. Start by doing some web research. You can find out an enormous amount of market information before you even set foot in a car dealership.
Armed with that knowledge, you’ll be in a much better position to negotiate. As the old saying goes, knowledge is power.
Use carsales.com.au, redbook.com.au and carsales.com.au to research the market for the car you’re wanting to buy. Be aware though that there will be a price difference when buying from a dealer versus a private seller.

Negotiating points

There are several potential negotiating points when you're buying a car, including:
• price,
• servicing,
• extended warranties,
• accessories,
• and delivery.
We'll now look at each of these in turn.

Price

Whether you’re buying a new or used car, you don’t want to pay more than the dealer will accept.
There is almost always wiggle room in any dealer’s advertised price for a car. It’s up to you as the buyer to get the best price you can for the vehicle you want.

Servicing

Price is obviously very important, but it’s not the only thing to negotiate when buying a car.
Servicing will most likely be the major ongoing cost of running your car after you buy it. It can also be a great source of ongoing income and profits for car dealerships after they have made a sale. Many will compete aggressively to try and ensure you come back to them.
Try to negotiate for servicing to be included in your new car warranty period.

Extended warranties

An extended warranty could save ongoing running costs of your car over the long-term. But make sure you check an extended warranty offer carefully. Some are really just servicing contracts that benefit the dealer more than you. Their service charges may not be the best deal you can get.
Ask your dealer to justify the costs/benefits of any extended warranty and be prepared to haggle.

Accessories

Optional extras and accessories are another potential negotiating point. Know if you need or want any extras and be prepared to fight for them. Try and get them included for free as part of the sale. Otherwise, it's usually cheaper to arrange them yourself after you've bought your car.
Delivery
You’ll often hear cars advertised at a certain price plus “dealer delivery charges”. This charge is often at the discretion of the dealer. They may need to include it to increase their profit margin on a car they have advertised at a very low price.
Dealer delivery charges often don’t just include the cost of getting the car to the dealer. They can also include costs necessary for getting it ready for sale, like:
• mechanical checks, and
• detailing.
If your dealership is adding delivery charges to the price of your car, ask for every charge to be itemized. Don't just accept a single fee. That way, you can see if there are any unjustified or excessive costs. Then be prepared to haggle to reduce these charges.

How we can help

If you need to arrange finance after you've negotiated the best deal for your new car, talk to us. We're car finance brokers and we can get you the best deal. Don't use dealer-arranged finance or try and arrange a loan yourself.
We also offer a car buying service, so you can access fleet pricing and avoid having to set foot in a car dealership! Call 1300 301 051 during business hours to speak with one of our experienced finance brokers.

DISCLAIMER : The thoughts and opinions conveyed on this website are those of the authors only and are of a general nature. This does not constitute financial or general advice to you from Auto Loans Group. You should seek your own independent advice from a professional which is specific to your circumstances before considering any of the items referred to in this article, including finance, insurance, and car buying.