Smart car buyers shop for a loan with the best possible interest rate long before going to the dealership. It's a good idea to get pre-approved financing from an independent lender, particularly if you're someone with imperfect credit. Then you can go to the car lot with a blank check (which has a credit limit set by the lender) and negotiate as a cash buyer. The dealer might still be able to beat your lender's pre-approved interest rate, but with that loan in hand, you have an excellent bargaining chip.
Now that you've secured a good price, you'll walk into the finance and insurance manager's office to close the deal. This person will likely offer you a number of additional products and services.
Examples include an additional alarm system, a $275 "paint protection package" or $100 to etch the vehicle identification number into the car's major parts. Extended warranties can be valuable, but dealers often mark up the price well over their wholesale cost.
Other Factors To Consider
Once you have all these pieces of the deal before you, we recommend giving consideration to a few intangibles. Customer service, for example, is very important. Do you find your salesperson responsive, knowledgeable and efficient? Do you have confidence that he or she will honor the deal and continue to be responsive to your needs even after the deal is closed?
And what about the dealership itself? Is it part of your community? Is it convenient for service visits? You may consider it worthwhile to pay a few hundred dollars more for your car once you consider the importance of these other issues.
Before you make another round of calls to troll for a deeper discount or play dealers off against each other, ask yourself what your time is worth. If you believe you can still save $1,000 or more, then go for it. But if you are negotiating in a narrow range where the most you can save is maybe another $200, ask yourself if it's really worth it. Saving that $200 might mean a longer drive to pick up the car or a prolonged negotiation with the sales team. Either one could turn your vehicle delivery into an ordeal.
The Whole Package
The purchase price is only one of a number of factors that can affect the actual amount of money you spend on a new car. If you know what to look for in every aspect of the deal, you can be like a chess player, who is always looking several moves ahead. You want to negotiate a deal that's good in all its aspects, not just price.