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Three factors that influence the negotiation of a new car

Negotiation

Of all the things that you will buy in your lifetime, the purchase of a new car is among the most important. For starters, it’s very expensive, but also your vehicle will be with you for a long time, and most buyers will use it everyday.

Of all the purchases you will make, buying a new car is probably the most complex one. There are various models and dealers, and if some cars are very affordable, others can easily cost more than a suburban home. Therefore, negotiating the price of your new car is a very noteworthy aspect of the buying process. While it is perfectly acceptable to pay the advertised price for a given model, many buyers expect to negotiate the final sale price.

Negotiation leeway obviously depends on the dealer, as well as three other factors that come into play to indicate whether a particular car is easily negotiable. For more information on these factors, we visited Kingston Toyota, and discussed this with the sales representatives on site to determine the factors that influence the possibilities of negotiating a new car.

The model

Right off the bat we learned that each model does not offer the same negotiation opportunities. For example, a new model that has just come onto the market and that is in high demand will be less negotiable than a model that has been on the dealership floor for two or three years.

In general, a model that has just arrived is more in demand, and the dealer has less inventory. In this case, one should expect to see less openness in regards to haggling.

The moment of purchase

Certain times of the year are more conducive to negotiation than others. Each dealer must achieve specific sales goals, and most of the time, these goals must be achieved before the end of the month or the year. So you can deduce that sometimes it is easier to negotiate at the end of the year or month approaches.

The price of the vehicle

The most expensive cars have a higher margin of profit than more affordable models. Once you start negotiating, it’s important to negotiate the profit margin of the dealer, and not the price of the vehicle. Remember, a vehicle sold for less than $25,000 will often have a profit margn of under $1,000. On the other hand, a car sold at $100,000 will have a profit margin of up to $10,000. It differs from manufacturer to manufacturier, but you expect to have less bargaining power over a cheaper model.

Automotive dealers understand that negotiation is part of the sales process, and many of them will be willing to discuss the selling price with you. However, the important thing for consumers is to understand the situation, along with the realities of the market, to obtain a fair and reasonable price. The three factors listed above are a good starting point in determining if a particular model will be easier to negotiate.

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