Generous Limited Warranty Support
As we mentioned, you could get a full refund for your car if you didnt like it up to 30 days or 1,500 miles after purchase. But lets say you intend on keeping it. If thats so, then CarMax has your back with its limited warranty program. For up to 90 days , this plan can provide some coverage for the more serious issues of key vehicle systems and components.
How Do You Know If Youre Getting The Best Deal
No matter which type of dealership you plan to buy your next car from, you can be sure youre getting the best deal by doing your research first. Many no-haggle dealers will tend to have a higher price than traditional dealers, so its up to you to find out how much more they are charging for the same car and if the price premium is worth not having to negotiate over.
For instance, if you do find a car dealer that doesnt negotiate, you can always log into Your Auto Advocate and obtain a Market Price Report that will display cars of the comparable year, make, and model within a 100-mile radius. By looking up one of these reports, you will know what other dealers have the same car and will be able to get an idea of how much more the no-haggle dealer is selling its car for.
While every dealer across the nation has yet to jump on board with the no-haggle business model, many will soon be following suit. But its still up to you to ensure that youre getting the best deal possible
Research First Pull Out Your Wallet Later
Buying a car starts with deciding which vehicle is right for you. If you fully understand the type of car you need, youre less likely to be talked into buying something you want from a car dealer playing on your emotions.
Base your decision on practicalities. Does your lifestyle suggest youd be better off with a people-mover, a city-friendly SUV, a hybrid, a bush-bashing ute or a small, fuel-efficient sedan that fits into tight parking spaces?
Have a firm idea of what best matches your needs and then narrow it down to a handful of choices. This gives you a negotiating advantage because you can immediately dismiss unsuitable and budget-destroying choices out of hand.
Think about the future, too. Are you planning to start a family soon? Will you be moving closer or further away from work one day soon? How much do you currently drive and what are the chances of that changing? How secure is your income and what can you realistically afford in the current economic climate?
Meticulous research saves money. Ring up a few local car dealerships and ask them their price for your preferred car you may be surprised to get different answers. Check out popular online car selling sites to get a sense of current pricing. Keep an eye out for seasonal sales.
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Research What Incentives Are Available For The Car You Want
Automakers, like Honda, Toyota or Ford, might offer dealerships and consumers incentives to choose a particular car model. Know what these incentives are ahead of time to make sure youre getting them included in your final price.
And if youre planning on financing the car, check to see if there are any low-interest-rate offers available from automakers for the specific car model youre considering. These offers could save you more money in comparison to a loan from a bank. But make sure you have a backup plan lined up in case you arent approved for the promotional interest rate.
Dont Be Afraid Of Finance
If youre planning to buy your new car outright, it may be wise to initially conceal this from your car dealer. Its usually in a dealers interest to sell cars on finance, as there are often manufacturer-subsidised incentives that can make these packages quite attractive.
While being receptive to the idea of finance can pave the way to an improved offers, dont be completely dismissive of the dealers financial packages. In some cases it really is cheaper to use finance provided by the dealer than to borrow money from your bank. Our guide to car financing explains the options open to you.
Remember that until you sign for anything, you can walk away from the deal at any point. An equivocal Im not sure yet can often help negotiations until the contracts come out, how youre going to be paying for the car is your business, not the dealers.
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Negotiating With Private Sellers
Buying a used vehicle from a private seller may be an option if you plan to pay cash. But consider how much a private seller is likely to charge for a vehicle versus a dealership.
Depending on the seller, it’s possible that you may be able to negotiate them down on the price if they have a fairly urgent need to sell. On the other hand, if a seller claims there’s no pressing reason for the sale, other than wanting to get rid of the car, you may have a tougher time talking them down.
In terms of where to set your negotiation starting point, it may be helpful to choose a set dollar amount that represents the absolute maximum you’re willing to pay. Then you can set your starting price below that amount so you have room to work your way up.
For example, say you only have $5,000 to spend on a used car. You come across a great car that’s priced at $5,500, which is just out of your price range. If the seller gives you an opportunity to make an offer, you could start at $4,500. From there, you and the seller can continue bargaining until you reach the $5,000 mark that you’re comfortable paying.
Be Prepared To Walk And Go To Another Dealership
With your research out of the way, youre now ready to engage with a dealership about the particular vehicle youre interested in. I recommend you use one of our tried and tested email templates for your initial outreach to a dealer.
If you come across a situation in which a car dealer wont negotiate, my recommendation would be to bring up the vehicles time on lot and remind the dealer that it is costing them money to have the vehicle sit there, when you would gladly take it off of their hands for the right price.
If this tactic does not work, my recommendation would be to show them the similar vehicles you have identified in the area, along with their time on the lot, and let the dealer know you have many options for where you can go to purchase your next car. If this doesnt persuade them to negotiate and make a car deal, then its time to send your email introduction to the next dealer on the list.
Obviously, this strategy will not work if there are no similar vehicles in your area. If thats the case, then Id suggest you read this guide on how to buy a car long distance from a dealer.
When it comes to negotiating tactics, whoever is in command of the conversation has the leverage during the negotiation. Car salespeople are trained to always be in control of the conversation. You need to keep them on their toes by using the above tips to gain control of the conversation.
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Now That You Have Discovered What Seems Like A Great Used Car Theres Just One More Thing
Once that you have found what you think could be a wonderful used car, you should know exactly what you are buying, and whether you should buy it or not. Thats where POMCAR comes in!
When making a commitment to buy your next vehicle, you should always make your purchase contingent on its passing POMCARs pre-purchase inspection. POMCAR will send a qualified technician to thoroughly check out your prospective purchase. Our technician will perform a comprehensive 270-point inspection which will cover:
- The cars identity, details and mileage
- Tires and brakes
Negotiate A Better Deal When Buying A Used Car From Private Sellers
There are pros and cons to buying a car through a private seller. One of the main disadvantages is that the car wont have been subjected to the rigorous vehicle health checks used by car dealerships.
You can make this work in your favour though. Taking the time to check the vehicle thoroughly will allow you to identify issues such as dents in the bodywork, chips in the windscreen and worn tyres. And since the seller might be looking to close a deal quickly, you might be able to haggle on the price.
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How Do You Ask For A Lower Price
After the salesperson presents the price, you could respond with: “We’ve done a lot of research on the market value of this vehicle, and we have a good idea of what it sells for because we’ve shopped around a bit. If you can beat this price we will have a deal.”
A response like this accomplishes a couple things. First, it lets the salesperson know that you’re an informed buyer. Your goal is to justify the drop in price rather than present an offer without context. Second, the salesperson knows there are offers to beat, so there is a good chance the salesperson is going to jump to the low end of the dealership’s pricing structure. This approach works for both new cars and used cars.
How About Negotiating With Carmaxs Maxcare Extended Warranty
Another important aspect of a car buying experience is pondering over warranty. Many dealerships offer some sort of limited warranty, as does CarMax, as weve explained already. Additionally, they also have the MaxCare extended warranty coverage, if youd want long-term protection against any unwanted repairs. Uncertainties like these, without warranty, can be exceedingly costly.
Key components in and around the transmission or engine, for instance, can cost thousands for just a simple repair. Having a warranty, therefore, is a lifesaver. Across more than 3.8-million MaxCare customers, CarMax has already covered claims worth $1.5-billion. Its comprehensive coverage and is quite flexible. At the most, it can cover your car for up to 5 years or 150,000 miles.
- Parts affected by corrosion, accidents, or poor maintenance.
- Its Emergency Roadside Assistance service doesnt cover the cost of tire replacements or reimburse the price of fuel .
This is another avenue for which you can get a better deal elsewhere than what you might get with CarMaxs MaxCare. Shop around with other extended car warranty providers, and see if their pricing and coverage outmatches CarMaxs. The cars overall value is still the same. Nevertheless, and with alternative warranty providers, you could save a whole lot more down the line to protect it.
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Why Is It Hard To Negotiate On New Cars
Negotiation on new cars is pretty hard because the cars price is almost the final. Dealerships mostly offer the same price for the car because if someone increases their price, people would not go to them. However, the invoice price is always less than the price they are offering. So, try to have 2% above the invoice price which would be a good deal.
Research Before Your Visit
As best practice, we recommend that you gather information for your upcoming visit in advance. You can get estimates for the model that interests you from different dealership by contacting them by phone or online. You can utilize online resources like Edmunds True Market Value to determine a fair price range as well. Make sure that the comparisons you are making are identical in terms of trim level, features, and other options. With a clear target in mind, you are better suited and more confident to discuss potential payments with a sales associate.
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Make The Right Opening Offer
With the monthly payment trap neatly avoided, its time to open negotiations. Theres a rule in negotiating that advises The first person who speaks loses. It means that once your opening offer is on the table, it sets the tone for the rest of the negotiation. So, ideally, youd like the salesperson to make the first offer, because it could be well below what youre prepared to pay.
One way to prompt an opening offer is to say, Ive done some research about what others are paying for this car. What kind of a discount are you offering? If the salesperson wont bite, its up to you to kick things off.
Look at the current market value price and set your opening offer a good deal lower, but still in the ballpark of what the dealer might accept. If you know that the current market value of the car is $25,000, offer well below that, perhaps $23,000.
After delivering your opening offer, say nothing more but watch the salespersons body language, tone of voice and facial expression. Salespeople may groan and complain and do all kinds of playacting but if they take your offer to their manager, youre probably in business.
Research The Market Value For The Car You Want
When youre purchasing a car, youll need to do some research before you start the negotiating process. Youll want to read up on everything you can find about the average price paid for the car youre shopping for.
You can assess the value of the car you want by plugging in its information into a website that tracks and appraises car values, like Kelley Blue Book or Edmunds. This can help you figure out an estimated average price range in your area. Once you have a better idea of cost, you can set your ideal target price for the car youre shopping for.
In some cases, the particular time of day, week, month or year can affect the price you pay for your car. Learn more here about the best time to buy a new car.
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Why You Should Never Pay Cash For A Car
If you tell them youre paying cash, they will automatically calculate a lower profit and thus will be less likely to negotiate a lower price for you. If they think youre going to be financing, they figure theyll make a few hundred dollars in extra profit and therefore be more flexible with the price of the car.
Reach Out To Multiple Car Dealers
You want to call or message at least three car dealerships to get a quote or rough price range. Spend time researching the car dealership to make sure you are getting a car from a reputable dealer. Once you have a quote from a dealer, you can find out whether other dealerships can beat it.
Dont forget to thoroughly inspect and test drive the car prior to purchase. If youre considering buying a used car its also important to get a vehicle history report if youre not the first New Zealand owner.
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Create A Bidding War Between Dealers
One of our writers at Money Under 30, Chris Butsch, is a total car nut who also brokers car deals on the side. Hes used this tactic to save his clients between $4,000 and $13,000 on every sale.
His strategy for getting the best possible deal on a car reads like something out of Sun Tzus The Art of War. Instead of going to battle with your enemy, get your enemies to exhaust each other in battle first.
Heres how it works.
Once youve researched and determined exactly which make/model/year/trim you want, head to sites like Cars.com, Edmunds, CarGurus, and AutoTrader to find nearby dealers that have them in stock. Make note of each cars stock number at the dealer, too. This will not only save time, but will let them know youre smart and not a sucker.
Then, follow these steps:
And so on, and so forth.
This method works so well because it:
- Allows you to pre-negotiate the best possible price over the phone, so all you have to do is walk in and pay.
- Strips dealers of all their tools, fees, and manipulation tactics.
- Saves you thousands and thousands of dollars.
Best of all, theres no real negotiation involved at all. You simply ask for the best possible price, over and over. It may take 14 phone calls, but the thousands youll save will be worth it.
Bring Your Significant Other But Leave The Kids At Home When Negotiating
Most dealers we spoke to said theres little point trying to close a deal if only one half of a couple visits the showroom. A good sales executive will look for a wedding ring and engage customers in general small talk its all part of what the sales industry calls prospecting.
Few husbands or wives will be willing to commit to such a large purchase without consulting their spouse, and that usually means visiting the dealership to see or test drive the car together. This is especially true of family cars. One thing to watch out for is the dealer playing spouses off against each other, particularly if one half of the couple is emotionally involved in the purchase. If you think this might be happening to you, theres no harm in telling the dealer you want to sleep on it and return the next day.
While its best to organise childcare for your kids when negotiating the final deal, you can involve them in buying. Young eyes may spot things you might miss, such as whether there are rear USB ports, and its also worth checking if the rear windows are low enough for them to see out of easily.
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