What not to say when you're buying a car
- Jeff Voth, Yahoo! Canada Autos
In a perfect car-buying world, no one would ever need to haggle to get the best deal. Prices would be set and everyone would accept this as being the norm. Of course, this is not the case and probably never will be. Dealers want to generate profit with the vehicles they sell and it is your job to negotiate a deal that makes sense for you.
There are good and not-so-good ways to negotiate. There are also certain words and phrases you as a consumer should stay clear of. The next time you need a vehicle, do away with these five sentences to make your buying experience a little easier on the pocket book and your psyche.
"I am hoping to spend (X amount) per month."
Dealers are always looking for ways to move negotiations toward a monthly payment rather than a specific vehicle. There are two mains reasons for this strategy.
First, dealers know that many buyers have no true sense of what they want or need. Over the years, I witnessed on numerous occasions people coming in to buy a car, then a few days later taking delivery of a new pickup truck. There is nothing wrong with changing your mind at the point of purchase. But be aware a dealer will try to move certain inventory off the lot first to increase their gross profit and not necessarily focus on what you need.
Second, by providing them with a per-month figure, you open the door to negotiating the monthly payment and not the actual selling price of the vehicle. A skilled salesperson will always try to move you up on payment to pad their bottom-line. So be prepared and hold your ground on how much you plan to spend per month.
"Will my trade-in affect the price?"
While it may be true that you have a trade-in, wait until further into the negotiating process before disclosing this fact. Should the salesperson asks you up front if there is a trade involved, say you are not sure at the moment and want to focus on the selling price of the vehicle you are interest in looking at.
Dealers will try to distract you away from the selling price by getting you to focus on how much they are willing to offer for your trade. Don't be fooled. Negotiate the best price on the new vehicle first and then discuss the trade later. By doing this, it is important to realize the true value of your trade-in may be less than you thought. But it will be indicative of the true value and hopefully provide you with the best deal possible on both sides of the equation.
"I always pay cash for my vehicle."
While this may sound like a reasonable way to get a great deal, dealers make most of their money selling financing with your vehicle and not on the gross profit generated to a cash buyer. To get the best deal, let the salesperson know you have yet to make up your mind on cash vs. financing and negotiate the price, not the method of payment. The key is to leave all your options open as long as possible, putting pressure on the dealer to offer their best deal without tying it to financing, leasing or paying cash. Once you have their final offer, then you can decide best how to pay for it.
"We are undecided as to what type of vehicle to buy."
A salesperson's best friend is an undecided couple. More often than not, this presents them with the opportunity to move you up in cost, as many times one of the decision makers leans toward luxury while the other is more frugal. Have a plan before you walk into the dealership and stick with it. Knowing how much you have to spend, what features are important and which are not, and working together as a team rather than individually will go a long way to securing the best deal and staying within your budget.
"I need to buy a car today!"
There are times when buying a car is a necessity and time is of the essence. But it is important to remove time from the equation as much as possible. Your biggest asset is having the ability to walk away and think about it, rather than being forced to overspend or buy something you may regret later. Don't fall for the line that you can always trade it in next year if you're not entirely happy. Resale values decrease by as much as 40 per cent in the first year, so be wise and don't rush.
Also, be sure to take emotion out of the negotiating process. Never show the salesperson how much you like or want the vehicle. Even if it's perfect in every way, save your excitement for later and maintain your composure. A salesperson is always looking for that area of weakness to exploit and emotion is one of the strongest. Remember: stay calm, cool and collected until after you have taken delivery. Then, tell the world and celebrate your perfect car and the excellent negotiating skills you used to get the best deal.