Purchasing a new or used vehicle doesn't need to be an experience filled with anxiety or dread. It can be a pleasant, hassle free experience. Our goal is to provide the up-front financing and information you need to stack the deck in your favor.
Here are 10 tips we hope will help you negotiate a fair deal on a new vehicle
1. Finance With BlueHarbor.
With financing from BlueHarbor, you’re in control of the sales process. You have your loan package, and you’re ready to make a deal. That gives you instant credibility as a serious buyer. It also removes one of the key variables that most people have to negotiate: the cost of financing. With a BlueHarbor auto loan, you have a competitive rate, and you know exactly how much you will pay each month. You have the power of a cash buyer!
2. Know What You Want.
When car shopping focus on one specific model. Find out what features and options are available, and decide on the ones you want. If your model has lots of option choices, you might want to make three lists; must haves, nice-to-haves, and don’t wants. The more specific you can be when describing the vehicle, the better your chances of getting a fair deal. With a BlueHarbor pre-approval, you can shop at any dealer or even online, and you don’t need to fill out a new credit application every time you go to look at a car.
3. Know What It Should Cost.
The key to fair negotiations is having equal knowledge. You need to know as much about how the vehicle is priced as your sales consultant. BlueHarbor can help you learn about the vehicle price and help educate you on the sales process so you are empowered with knowledge to drive a good deal.
The target price for a vehicle depends on several variables:
- How much does the manufacturer say the car is worth? This is generally called the “sticker price,” or “MSRP.” You’ll find this number right on the window of the car.
- How much does the dealership pay to buy the car from the manufacturer. This is usually called the “invoice price.” Your target price is generally somewhere between the invoice price and the sticker price.
- How “hot” the car is in the market. Supply and demand will determine the target price in your area at any given time. Expect to pay more for a car that’s in demand, and expect additional discounts for cars that are slow sellers.
4. Know What Your Trade-In Is Worth.
You should expect a dealership to pay you approximately the wholesale value of the vehicle, less deductions for excessive wear and tear and high mileage.
Why the wholesale value instead of the retail value? When the dealership buys your used car, they are taking on the burden of selling it to someone else. The dealership will have expenses for preparing and selling the car, and they’ll need to make a reasonable profit on the sale.
If you really want to get the retail price, consider selling the vehicle privately. Just remember, you’ll have to advertise it, take the calls, meet the prospective buyers, let them test drive your car, and hope that the check clears.
5. Negotiate One Transaction Variable at a Time
Don't try to negotiate everything at once. Buying a car is really several transactions that should be negotiated separately:
- The price of the new or used car
- The value of your trade-in
- The financing
Since you have chosen to obtain your financing with BlueHarbor, you have eliminated one of the variables.
Sometimes during the negotiation, you’ll be offered what appears to be a lower rate if you’ll agree to finance through the dealership instead of using your BlueHarbor sourced loan. If this happens, remember two important points:
- Small differences in interest rates may only lower your monthly payment by a few dollars. Use our payment calculator (hyperlink?) to see the difference interest rates have on your payment. For example, if you lower the rate on a 60 month, $15,000 loan from 7.50% APR to 7.25% APR, you’ll save only $1.78 per month.
- Reducing the rate may change another aspect of the loan. ,The dealer may reduce the term or reduce the loan amount to secure a better rate. BlueHarbor rates are among the most competitive in the market.
6. Be Flexible.
Flexibility can be an asset when buying a new car. For example, if dark green cars are in demand, you’ll have a better chance of getting a good deal on some other color. Be prepared to compromise.
Your BlueHarbor loan gives you all the flexibility you need. Want to buy new and you decide at the last moment that the mint-condition used vehicle you saw on the dealer’s lot for thousands less is a better deal? BlueHarbor gives you the flexibility to choose whle ensuring your financing is firmly in place.
7. Be Patient. Negotiation takes time.
You’ll probably have several rounds of offers and counter-offers before you reach a deal. Just try to relax. It’s important to know your tolerance for negotiating.. Before bargaining over small amounts of money, consider whether it’s really worth it.
8. Ask Questions.
Negotiation should be an open, direct process. If you’re not sure what’s going on, stop and ask questions. Be sure you understand exactly what is included in the dealership’s offer to you and have them explain completely each number presented to you.
9. Be Prepared to Leave.
Ultimately, you have complete control of the sales process. Unless you absolutely must take delivery of the car that day, not purchasing is always an option. If you do that, the dealer has lost a sale and earns no income off the time invested in you. If you leave the dealership, there are several things that may happen:
a. The sales consultant may immediately try and stop your departure with an offer of a better deal.
b. The sales consultant or sales manager may call you within a day or two to re-open negotiations at a better starting point.
c. The dealer may consider you a lost opportunity and move on to serving other customers. If this happens, it may be a sign that you were unrealistic in your negotiation position.
Check your figures carefully before going to another dealership. Most dealers are truly eager to sell you a car and provide a pleasant experience.
10. Get It In Writing.
For your protection, make sure you get the details of the purchase lin writing. Ask the sales consultant to write down the price, terms and any options that are included in the purchase. Did you negotiate free floor mats or an iPOD connection? Get it in writing. And have the sales consultant (or better yet, the sales manager) sign it.
Many people like to think about a prospective purchase for a day or two before making up their minds. If you do, it’s important to get the dealer’s offer in writing. Suggest a 24-36 hour expiration date to make the dealer more comfortable with the written offer.
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