Contrary to popular belief, with a few exceptions, car salesmen and dealerships are not out to fleece you out of your hard-earned money. You both have the same goal: to have a car change hands at an acceptable price.
We hear a ton of myths and misconceptions about how to get the best price on a new car. Some were once true, but have become outdated in the days of online car sales and brokerage and instant-access pricing information. Others were just bad advice to begin with. We've compiled a list of the most commonly shared strategies about car-buying that simply are not effective, and may even lead to a higher price.
Myth #1. Go to the dealership on a rainy day or holiday.
This widely held perception revolves around the premise that if the dealer lot is empty, they'll be more motivated to sell you a car. There is some truth to this, but the problem comes in that other buyers are thinking just like you are. Rainy days and holidays are actually some of the busiest times.
If you plan to buy from a brick-and-mortal dealer, the best times to buy are:
- On the weekdays, especially during 9 to 5 work hours. Dealerships are much busier on the weekends, and the salesman will simply move on to a less-prepared customer rather than giving you the low-margin deal you seek.
- At the end of the month. Dealerships have monthly quotas to meet that are absolutely essential to their profit margins. If they're very close to getting extra factory-to-dealer incentives, they'll do just about anything to make the sale.
- At the end of the model year. Buying a 2013 model when the 2014 is on sale, or is about to be, helps ensure the best price. Dealers don't want to hang onto older metal.
- Right before a redesign, or when a car is to be discontinued. Car companies comprehensively re-engineer their offerings in each segment every 3 to 5 years or so. If the upcoming car is all-new, demand will be high, and therefore much lower for the outgoing or discontinued model.
Myth #2. If leasing instead of buying, negotiate the purchase price first and then reveal your true intentions.
This for some reason widely practiced 'negotiation tactic' will almost never save you money. Dealerships love to sign lease agreements. What could be better than receiving cash upfront and monthly payments for 3 or 4 years, then still get to sell the car to another buyer?
In reality, lease prices, especially with readily available seasonal offers, are often lower than what you'd pay to buy outright. To get the best lease deal, watch closely for special regional and national offers, and contact several dealers over the phone or online for competing quotes.
Myth #3. Don't tell the salesman you have a trade-in until after you've negotiated a new-car price.
This misconception makes sense on its face, as tricky salesmen sometimes put together a price package with a tantalizing low dollar amount, but undervalue your trade-in to still come out far on top.
However, this is a great way to antagonize your salesman or the dealer's financial department, who ultimately have the same goal as you do: to complete the sale. A better tactic is to be honest and upfront, but approach the purchase and trade-in as separate negotiations. Come prepared with your trade-in's real value (we recommend Kelley Blue Book), and be willing to buy a car but sell your current ride to another party, or walk completely, if the dealer tries to pull a fast one.
Myth #4. Beat the salesman at his own game by being a superhero negotiator.
What do you do for a living? Whether it's pouring concrete, fixing cars or trading stocks, do you think someone with little to no experience could do a better job than you? Car salesmen are professional negotiators. Tricks like coming in in expensive clothes, constant skepticism about the most insignificant points of the contract, threatening to walk away at every opportunity, et al, simply don't work.
Better to know the real value of your car of choice in the trim level and options you plan on. Then, contact the online sales departments from several dealers; or use an online car brokerage or direct-sales service. In the information age, walking onto the lot 'cold', i.e. with no previous contact with dealership staff, will usually lead to a higher price.
Myth #5. Decide what you think you should pay for the car, then bring a cashier's check in the exact amount.
While logic states that the ball is in your corner when coming prepared with your funds in order, if you haven't had previous contact with a dealer and plan to walk in and demand a magic dollar amount, you'll likely find the experience is a waste of your time.
Calculating fees, taxes, the cost of exact options and accessories, etc. for the physical car you are buying is a complicated process. The dealer's business department, who like you, are just trying to complete a sale, is there to walk you through it. Again, we can't emphasize enough the benefit of deciding on the terms of a deal before you ever enter the lot. That means going one day for window shopping and a test drive, then finding the best price among local dealers. Once you have an agreed-upon price, bring a cashier's check in that amount for a simplified experience with the business department.