When it comes to buying a car, most of us expect to be able to negotiate the price of our next dream vehicle. The dealership also expects some negotiation to occur, and usually will want to talk if you have a fair offer in mind. That said, there are a few variables that come into play when negotiating the price of your next vehicle.
The most important tip we can give you is to remember that not every vehicle will be negotiable, and not every vehicle will have the same negotiation leeway. Dealerships buy their cars from the automaker directly, and each vehicle is sold for profit but that margin is not as high as we might think. Popular compact cars, for exemple, rarely have more than $ 1,000 left in profit.
With that in mind, here are a few ways to get the best price at the dealership.
Choose a car that is on the dealership floor
Dealerships will usually be more inclined to negotiate the price of a vehicle that is already in inventory. That’s because they can make the sale faster, and they don’t have to pay to go and get another vehicle from another location. It’s simpler, and that fact will reflect in their willingness to negotiate.
When you are negotiating price, you are in effect negotiating profit margin. Each accessory (winter tires, tinted windows, roof racks, bike racks etc…) have their own profit margin. Therefore, by adding them to your new vehicle, you are increasing the overall profit margin of the deal and will therefore have more negotiation leeway.
Find the best deals
Let’s imagine that you show up to the dealership to buy a 2016 model. There are plenty of them available and they just got on the showroom floor. But there, in the corner, is a 2015 model of the same car with “SPECIAL PRICE” written in bold letters in the window. Most often, there are minimal changes from one model year to another, and even if their are significant changes, depending on what you want in a car, the 2015 model may fulfil your needs. That car will be a lot easier to negotiate, so you may want to have a look. The same can be said for demo vehicles.
Thank you to Bruce GM Middleton for their help with this article!