The Dealer Welcome! So you’ve located the right car for you and your budget and are now ready to take on the car dealer. Negotiating with a car dealer can be intimidating but don’t worry –we’ll go over some strategies and talking tips that’ll help you before you walk on the lot. Click to continue

Here’s Joe. He’s had a lot of experience negotiating with car dealers. Why don’t you ask him a couple of questions about negotiating? What should I do to prepare for talking to a dealer? What should I be aware of while talking to a dealer?

Good question. Negotiating is really all in the preparation. Here’s what you gotta do: 1.Know what you can afford. Find out your maximum purchase price for the make and model of car you want (including tax and interest). If you’re financing through a bank – get a preapproved loan –it makes negotiating so easy. 2. Shop around Get quotes from different places. You can get them online, over the phone, or in person. The more info you know the less they can trick you into a bad deal. What should I do to prepare for talking to a dealer? What should I be aware of while talking to a dealer?

There are a lot of things to think about when talking to a dealer. But here’s 3 main things. Dealers get paid a certain percentage from selling a car, so they want to get you into that car as fast as they can and at the highest price they can. Don’t get bullied into buying a car – walk away if you are not sure what you’re getting into. Also, don’t discuss monthly payments right away. If you talk to a dealer about monthly payments they’ll try to get you to pay a small monthly payment for a longer term, which is more money in the long run. So keep the focus on the overall car price. What should I do to prepare for talking to a dealer? What should I be aware of while talking to a dealer?

You know what they say – practice makes perfect. Why don’t you try talking to a car dealer about buying this car? Don’t worry – I’ll be right there with you to make sure they don’t give you a raw deal. Let’s go! Honda Civic LX Maximum price: $30,000

Hey there! I’m Don – so you’re interested in this Civic, I see. Would you like to have a seat in it? Dealer’s will try to get you to test drive the car – if you drive it you might like it and make an emotional purchase, which is bad for your wallet. Unless you’re 100% sure you want to buy from here - I wouldn’t do it. No thanks, Don.Sure thing.

Well clearly you’re not interested in a test drive. Let’s talk business then – what is your desired monthly payment? Remember – talking monthly payments before determining overall price means you pay more in the end. I’d like to pay $300 a month I have an overall price in mind but what can you offer?

That was a great test drive! The car handles extremely well, especially with a driver like you. Let’s get down to business then– what is your desired monthly payment? Remember – talking monthly payments before determining overall price means you pay more in the end. I’d like to pay $300 a month I have an overall price in mind but what can you offer?

$300 is do –able with a down payment of $3,000. And we can give you a really low interest rate. Don’t let the dealer tell you how much your down payment or trade in value should be. Notice how he mentioned interest rate but not payment term? The longer the term, the more you end up paying. This is why you shop around and research – get all the facts and get a good deal. I think I’ll keep shopping around. That doesn’t work with my budget.

Well, $300 is do –able with a down payment of $3,000. And we can give you a really low interest rate. Don’t let the dealer tell you how much your down payment or trade in value should be. Notice how he mentioned interest rate but not payment term? The longer the term, the more you end up paying. This is why you shop around and research – get all the facts and get a good deal. I think I’ll keep shopping around. That doesn’t work with my budget.

We’ve got a great rebate offer though – today only –finance with us and you’ll get $1200 cash back. Rebate offers and other incentives are great, but don’t let them distract you from the two most important costs: Overall cost of the car & Interest rate That was a good practice– let’s go.

You did a great job out there. When you go out to buy a car for real – be sure to bring your research – what the True Market Value of the car is along with your target for overall price. This will give you some leverage when negotiating down the price. See you later!

To find out more about any of the topics discussed in this module - contact your base’s Personal Financial Management Specialists. Thank you for learning with us! You may now exit.