Oh, I Forgot To Tell You...
So, let's recap:
* Created budget and used the auto loan calculator to find out how much you can afford.
* Researched vehicles on sites such as Kelley Blue Book and Edmunds, and found the car you want.
* Emailed multiple dealers and made them haggle the price amongst themselves OR went to the dealer and played hardball yourself.
* Bled these suckers dry and a)got the car you wanted and b)at the price you can afford.
Time to shake hands and sign the dotted line, right? Like Lee Corso says, "Not so fast my friends." Guess what you have? A trade in! Now, if you don't have a trade in, Please go ahead and sign the dotted line (but remember to read my other sections before you do!). I'm sure the dealer has asked about a trade-in sometime during the negotiation, but there is a reason you held out. That reason? Because you are trying to get the absolute lowest price and by introducing a trade in, you take away from your negotiating power.
Now, just like you researched your new car, I hope you took the time to research your current car. You should have the several price quotes from Edmunds, including trade-in and private party value. Since I traded in a Piece of Sh--, my ability to haggle was limited. I did increase the value from $250 to $350, so there is some negotiating. For a trade in, you are reversing roles with the dealer. The hunter has now become the hunted. You are now trying to milk these fools for as much cash as you can. The amount for your car should be somewhere above trade-in and closer to the dealer price. This price is usually the private party, so I wouldn't take less than that. Remember, since you have the power, you are in complete control. You don't have to give them your old car. You might be able to get more money selling it on Ebay Motors or putting a sign on it.
Now what if your payments are still too high, but you know this is the car for you for the next 8-10 years. Getting a car lease is the answer. This is another stick it to the dealer maneuver because a lease is all based on the purchase price. Well, most people just think they work off of the sticker price for a lease. These people are idiots. They are the same ones who believe a Honda dealership gets those 50 Civic EX's on the lot for invoice cost. With a lease you pretty much eat the loss a normal owner would take on when purchasing. Since your working with the agreed purchase price and a predetermined residual value (usually @50% of the value), your monthly payment can drop significantly. You do have to be careful, because mileage becomes a huge factor. If you know this is the car for you, don't worry about it. Drive the car like you own it, and know that at the end of the lease you can purchase/refinance the car at the residual value. However, if you have a long commute like me (15k a year just work miles), you will get hit with a huge penalty for going over the miles. Charges are typically $.15 a mile which adds up fast. You should know by now you can haggle just about anything. If you need 15k miles and they are offering 12k, work some more of your magic. Just be firm with any answer you give - "I'm not paying that" "you must be kidding" "Why don't you want to get this deal made?" are all acceptable responses.
Next up: "You Are A New Car Owner!"
* Created budget and used the auto loan calculator to find out how much you can afford.
* Researched vehicles on sites such as Kelley Blue Book and Edmunds, and found the car you want.
* Emailed multiple dealers and made them haggle the price amongst themselves OR went to the dealer and played hardball yourself.
* Bled these suckers dry and a)got the car you wanted and b)at the price you can afford.
Time to shake hands and sign the dotted line, right? Like Lee Corso says, "Not so fast my friends." Guess what you have? A trade in! Now, if you don't have a trade in, Please go ahead and sign the dotted line (but remember to read my other sections before you do!). I'm sure the dealer has asked about a trade-in sometime during the negotiation, but there is a reason you held out. That reason? Because you are trying to get the absolute lowest price and by introducing a trade in, you take away from your negotiating power.
Now, just like you researched your new car, I hope you took the time to research your current car. You should have the several price quotes from Edmunds, including trade-in and private party value. Since I traded in a Piece of Sh--, my ability to haggle was limited. I did increase the value from $250 to $350, so there is some negotiating. For a trade in, you are reversing roles with the dealer. The hunter has now become the hunted. You are now trying to milk these fools for as much cash as you can. The amount for your car should be somewhere above trade-in and closer to the dealer price. This price is usually the private party, so I wouldn't take less than that. Remember, since you have the power, you are in complete control. You don't have to give them your old car. You might be able to get more money selling it on Ebay Motors or putting a sign on it.
Now what if your payments are still too high, but you know this is the car for you for the next 8-10 years. Getting a car lease is the answer. This is another stick it to the dealer maneuver because a lease is all based on the purchase price. Well, most people just think they work off of the sticker price for a lease. These people are idiots. They are the same ones who believe a Honda dealership gets those 50 Civic EX's on the lot for invoice cost. With a lease you pretty much eat the loss a normal owner would take on when purchasing. Since your working with the agreed purchase price and a predetermined residual value (usually @50% of the value), your monthly payment can drop significantly. You do have to be careful, because mileage becomes a huge factor. If you know this is the car for you, don't worry about it. Drive the car like you own it, and know that at the end of the lease you can purchase/refinance the car at the residual value. However, if you have a long commute like me (15k a year just work miles), you will get hit with a huge penalty for going over the miles. Charges are typically $.15 a mile which adds up fast. You should know by now you can haggle just about anything. If you need 15k miles and they are offering 12k, work some more of your magic. Just be firm with any answer you give - "I'm not paying that" "you must be kidding" "Why don't you want to get this deal made?" are all acceptable responses.
Next up: "You Are A New Car Owner!"
posted by Thomas at 7:42 PM
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