A short stint as a car salesman taught me that dealers are pros who negotiate all day for a living — and they always have the home field advantage.
Later, while buying dozens of test vehicles for an automotive website, I was on the other side of negotiations, and experienced the tricks dealers use to pressure buyers.
I've found that simple, nonconfrontational negotiating tactics can help even car shoppers who hate to haggle still get the best deal possible. These strategies, combined with online tools, can keep car shopping from turning into a battle with the dealer.
Here are five ways to level the playing field:
1. KNOW YOUR NUMBERS
In the car business, there's a saying: "Hit 'em with high numbers — then scrape them off the ceiling and make a deal." But if you have a good idea of what you should pay for a car, this trick won't work. Picture this: The dealer says an SUV is $27,500, but your research found the current price is $24,500. Do you think you'll have trouble saying no?
Research the key numbers and that knowledge will guide you through the negotiation and depersonalize the interaction since you're relying on data rather than opinion or emotion to establish the sales price.
Here are the numbers you should know:
— The current market value of the car you want to buy
— Any incentives you might qualify for, such as customer cash back or low-interest financing
— The trade-in value of your current car
— Estimated fees and local sales tax
With these figures, you can determine a target price to empower you in negotiations.
2. NEGOTIATE REMOTELY
Once you test drive the car, you can do almost everything else from home. This means during a negotiation that if you don't like the numbers or how you're being treated, you don't have to physically leave the dealership. Instead, you can just say goodbye if you're on the phone or simply stop email or text communications.
To use this approach, call the dealership and ask for the internet department. Or email the internet manager through the company's website. Often the response to a remote query is "Come on down! We'll take care of you!" Instead, say: "I already test drove the car and I know what I want. Now, I'm shopping for my best price."
3. SHOP YOUR PRICE
Once you get a price from one dealership you can "shop" it by contacting other dealers for a quote. Tell the other dealers that you already have an offer in hand. Dealers often test competitors prices so they know what figure they'll have to offer to win the sale.
A dealer might say, "We'll beat any competitor's price." Instead of tipping your hand and giving them a number to beat (so they can shave off a few hundred bucks), just ask for their best price.
4. BE UNPREDICTABLE
Salespeople are encouraged to control customers by pressuring them into a test drive, getting them into a sales office and working to close the deal quickly. If you prefer to visit a dealership to hammer out a deal — which I don't recommend — make sure you're calling the shots.
A quick way to show you can't be controlled is to be unpredictable. When you make an offer on a car, and the salesperson leaves to "take the offer to my boss," you should also leave the sales office. Tell the salesperson, "I need to get something from my car." Or leave without explanation and walk around the showroom. Believe me, they'll find you in a hurry.
5. NEGOTIATE WITH YOUR FEET
I had a retired friend with time on his hands who liked to go to dealerships, kicking the tires on a new car. He let the salesman talk awhile, and then he would walk out — twice. On the third visit, my friend bought the car, figuring the salesman negotiated himself down to his lowest offer.
Another friend of mine brought his restless 2-year-old into the sales office. When negotiations stalled, he picked up his child and prepared to leave. That simple move dropped the price $750. Remember, body language can speak louder than words.
BEFORE YOU SAY 'YES'
Make sure enticing offers are really as good as they appear. Before you agree to any deal, ask for a breakdown of fees to see the total — or the "out the door" — price. In some cases, dealerships insert bogus charges or inflate the documentation fee to try to take back some profit they gave away. Once you know the total price, and if it still looks good, you can buy with the confidence of knowing that you're a savvy negotiator.
- Associated Press (this article was provided by personal finance website NerdWallet)