Customers often walk into a dealership not knowing much about the car they want to purchase or costs. In this case, the dealership can keep cost secret to maximize profit. Educating yourself through research and then properly negotiating with the dealer will save you time and money.
Car Pricing
You do not need to contact the dealership for initial pricing. The manufacturer's webpage offers a variety of shopping information, such as advertised monthly discounts and leasing programs. Also, you can build a virtual model of the car you want, which allows you to view all available packages and options for the vehicle. You can add and remove features to suit your needs and stay within your budget. Go to the manufacturer's website first to build the car you want before you visit a dealership. Then, view the details or leasing specials. Print out the car you built for later shopping use. This way, when you do go shopping on the dealer's lot, you'll know the correct vehicle purchase price without the unnecessary add-ons, such as a dealer and marketing fee or an extended warranty. Dealers try to hide different fees in the vehicle's price.
Fair Pricing
The Edmunds website offers a shopping tool called "True Market Value." Access this tool to view dealer invoice pricing and don't go by what the dealer says. Invoice pricing is the amount the dealer owns the car for, while MSRP (manufacturer's suggested retail pricing) is the sticker price--the difference between the two is the dealer intended profit. Rebates and discounts that you see advertised online do not come from the dealership. The discounts come from the manufacturer who later reimburses the dealer for loss of profit. Use the Edmunds pricing tool to view the invoice amount and ask for a discount off of the MSRP before applying any manufacturer discounts. Remember, dealers are in business to sell a product and make a profit--after you locate the invoice pricing, figure out a fair offer that minimizes that profit. Dealers do not give away vehicles, but consider an amount of $700 to $1,200 above invoice pricing before any more discounts as a fair offer.
Offers
You can get a better deal by emailing dealerships and shopping toward the end of the month. Dealers are more likely to make a deal toward the end of the month, as each month the dealership must meet monthly manufacturer goals and personal dealer profit and bonus goals. If you'd like to test-drive various vehicles before making a final decision, do so before making any offers. Once you've decided on the vehicle you want, go to the manufacturer's website to locate dealers in your area. Email offers. State what you want and that you are ready to buy if the dealer can meet your desired cost. If a dealer meets your number, email another dealership and offer them an opportunity to earn your business if they can beat the price you have. Once you find the best deal, arrange to go in and purchase the vehicle. Expect to leave a deposit by phone to secure the vehicle.
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