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Negotiating the Deal

The important thing to remember here is that EVERYTHING is negotiable. You should not be afraid to negotiate and fight for the best deal you could. You must not forget that the more you pay for the car, the more profit the dealer will get and you are not supposed to give money to the dealer for nothing. They will do all kinds of smart tricks to make you believe that you are stealing from them, that they have very high expenses and you are leaving them with no profit at all, that they will be able to sell the car easily for the price they ask so they don't have to sell it to you for a lower price, they will try to charge you with a number of little additional fees that are supposed to cover their expenses… but you should not believe any of this even for a "second". Everything they say or don't say is aimed to manipulate you to make you purchase from them and obtain the highest possible price you are willing to pay. Keep in mind that car dealers are professionals so you will have a very hard time pulling a good deal. You must be extremely tough, disciplined, very well informed, you must be a nightmare for a car dealer or they will just sell you the car on their terms which means that you might part with a couple of thousand dollars more than you could have otherwise if you were better prepared.

Before you enter the dealership, you must prepare what is called "The Folder". This is were you put your notes, printouts from various websites for car prices, ads from other dealerships, etc. When they see you coming in with "the folder", you send the message that you are well prepared and they know that they will have a hard time manipulating you and that the deal will be negotiated on your terms.

When you go to a dealership, you must be properly dressed and look smart. You don't want to go if you are sick or just don't feel well physically or emotionally.

You must never buy the first time you enter a dealership. Your first visit is just to get some information. If you find something interesting, you can always get back later. Of course, the dealer will not let you walk out or he will lose his job. He will start offering all kinds of tempting deals just to keep you in and to have more time to manipulate you. You must be very firm and not yield to his tactics. Just say – "I am not buying today, even if it is for free!"

You must always negotiate the total price. Ask them how much it will cost you to drive off with the car right now. They will try to lure you into negotiating a base price and then they will add a hundred here, a thousand there for additional fees and the price you just negotiated will jump by 10%. Many of the fees are legitimate but you must know them in advance so that you can formulate your offer.

If you have to be extremely careful with car dealers in general, you must be twice as careful with women dealers. Do not let your guard down. Sometimes there will be not one but a couple of dealers working on you, and it will be much more difficult for you to negotiate with all of them. However there is a counter tactic in this case and it is to bring a buddy with you, so that you on your turn could give the dealers a hard time making their moves. Let your buddy be the "bad cop", constantly pointing negative parts of the deal, trying to talk you out of it.

Make sure you don't spend too much time in the dealership, half hour would be more than enough to negotiate a nice deal if that is possible at all. If you are unable to get a deal within that timeframe, just walk out. If they say that the "deal is only good today", respond that so is your offer. Don't let them force a deal on you or worse yet, do not let yourself accept a deal that you feel is not good enough. If you have any hesitations about the car – walk away, there a many other cars available. You must be absolutely satisfied with everything about the deal and the car.

It is very important to get all promises by the dealers in writing. And make sure you negotiate all the details of the deal. If for example they convince you into buying an option, find out everything about it. You may want "power seats" and they can include this in the price. But how many of the seats will actually be "power seats"? If they offer you leather seats – what leather would that be? Make sure you don't fall into the "options" trap, where you are offered a very low "base" price but then you will have to pay dearly for some low quality "forced options" like a radio for which you pay twice the fair price.

Don't Buy a car without an MSRP window sticker. Every new car is required by law to have the factory MSRP sticker on the window.

You must do everything possible to remove emotion from your buying decision. The dealers may offer you a test drive of the car and get you exited about it. Try to stay calm and silent so that they can't figure you out. Any signal you give out will be used against you. Do not give away your financing options, don't let them make you an offer based on monthly payments and elaborate financing schemes. Negotiate based on the total price.

What price should you offer for the car you are interested in?

That is a complicated question and it requires a lot of competent research and even insider knowledge. In the ideal case you should not give the dealer a profit more than 5% over the actual price they paid for the car. This price will not be the invoice price or the MSRP as they would make you believe. The dealers usually get the cars for a price lower than the invoice price, they may have some manufacturers incentives and they usually pay a fraction of the car cost as they finance it. The dealer will not go out of business if he makes 5% over his costs but of course, this doesn't mean that he will be satisfied with that. He will make you believe that he paid a very high price and now you want him to lose on the deal. Make your research and find out if there are any rebates when buying this car. Print the pricing and package/option info from the manufacturer's sticker so you can look up dealer cost. Rebates come from the factory, but dealers make you think it's from them to charge you more. Don't get tricked to try to lower a price that should already be low because of valid rebates.

When you make your offer make sure you present valid arguments based on factual data and numbers that can be verified from various sources. Don't let them interrupt you. Make a strong case for your offer and do not back down if they throw emotional remarks at you. If they laugh, don't stop explaining until you are done. They must sense your confidence because that erodes their confidence and they will know that you are not a person to be easily fooled with. Keep your emotions in check, remain calm and patient. Don't be rude to a salesperson at the dealership, just persistent, don't get personal, just go after a fair deal and you will get one.


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