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Driving the Deal: Strategies for Buying a Car

Aside from a house, a car is the biggest purchase that most people will ever make. Price listings and Blue Book values can give you an idea of how much your chosen ride is going to cost, but slick salesmen, factory add-ons, and used-cars with hidden defects throw some intimidating variables into the mix. But what are you going to do?  You need a ride, so you resign yourself to paying more than you probably should and simply hope that you won’t completely get ripped off.

A surprising number of people, including those who are confident in all other non-car-dealership situations, feel nearly helpless when confronted with the prospect of buying a new car and negotiating with an experienced salesman.

Be careful...

Luckily, it is now possible to use online tools and other means to arm yourself with information that will allow you to negotiate on a more level playing field.

If you know what you want, you can avoid the dealership altogether. If you are not yet sure, do some test drive sessions until you pick out the future Love Mobile…but don’t buy anything, no matter how appealing the deal sounds or how much you are lusting after a specific brand. Once you choose your model and make (and year, if you are in the market for a used car), you can take the pricing information home and really get started on the buying process.

To give yourself an advantage, you can contact multiple dealers and let them know that you are looking for a certain make and model of car. Be as specific as possible. This works best if you contact the dealerships’ higher-up (a sales manager or supervisor). You can get their names and contact information from the dealership web site or by calling the dealership directly. Let them know that you want their lowest possible price (you can say that you are “taking bids from various dealerships in the area”).   This will, hopefully, inspire them to quote a price that is as low as possible.

You can ignore any responses that don’t give price details.  If you receive a response with some serious bids, choose the lowest one, and either visit all the dealerships or at least phone them to see if they can beat that lowest price. You may be able to work out a deal with the salesperson with whom you test drove. Armed with the pricing information, you can merely ask if his dealership can beat the lowest price you were offered. This streamlines the negotiations exponentially, because the only answer that you are willing to accept is a “yes, we can beat it,” or a “no, we can’t.”

You can carry this strategy out as long as you want, getting bids and counter-bids and only crossing a dealership off of your list if they fail to undercut the lowest bidder. Phone or email can make this easier to do, though nothing beats face-to-face interaction when it comes to hardcore negotiating. You just have to remember that you are turning this into a bidding process, and that doing this gives you the upper hand and hopefully protects you from any sly sales techniques.

The bidding strategy may be more useful for new cars (or almost new cars) than it is for used cars. One of the pluses of buying a used car, especially if you search online, is that you will not be dealing with professional salespeople. However, you have the added variable of having to make sure that the car is in good condition. Lemons have always been a danger for used car buyers.

To avoid this, you might want to ask a mechanic to take a look at the car during or after you take it for a test drive. Assuming that you have already made sure that the car has all the amenities that you need and is being sold at the right price, this shouldn’t be  a big deal. If the seller balks at the mechanic idea, you might want to seriously reconsider making the purchase.

If you have a trusted mechanic lined up to verify the condition of the car, you can proceed in a way that is similar to the way you would deal with dealerships.  Finding a low bid should be easier because people are more likely to underprice their cars when they are selling them on their own.  You can use the underpriced car when you negotiate with other sellers.  Even if you don’t want to buy the lowest price car (for whatever reason), you can use the price to inspire other sellers to lower their own prices.

Whether you are buying new or used, the overall goal is to take charge of the negotiation process before a dealer or individual seller is able to reach into their bag of tricks.  If you are able to do that, you should be able to open the door to lower prices.

If you want to get an even more in-depth, sophisticated strategy, you can check the Motley Fool’s guide to car buying.

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About Josh Lew Josh Lew lives in the Midwestern US when he is not traveling. He is a columnist for Gadling and has contributed to Hackwriters and Skive Magazine.

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