car-buying will always suck because every time you buy a car you'll never
have a clue if you got the best deal or if you didn't there's really no way to
know how much money a dealer's making off of you every time you buy a car but
in this video I'm gonna cover the three key steps to negotiating a car deal so
that you can at least get the best deal possible so if you follow these steps in
order you'll at least be more prepared to negotiate a car the next time you
need to and you might just learn something as well now if you just
stumbled across this video I'm Jason with the honest finance Channel I like
to talk a lot about different financial subjects so if you're interested in this
type of content feel free to subscribe or at least give the video a like and
now on to car buying negotiation now the first key step in order to properly
negotiate a car deal is research what I'm saying here is that you have to do
your homework on the type of car you're looking for before you even bother going
to the dealership just think of it like this okay the goal of the dealership is
to make money and your goal is to save money so in order to do that you've got
to start by doing your research I mean seriously how do you expect to negotiate
a car deal if you have no idea what the car you're looking at is even worth just
don't be stupid with this okay just do your homework and you'll be just fine
so while you're doing the research for the car that you're looking for these
are the two websites that I recommend using I want you to visit Edmunds.com
and truecar.com because both of these websites are gonna give you really good
information on what your car is worth the specs and different reviews and
things like that they both do a great job at letting you
know how much your car is worth in the particular region that you live in what
these websites do is they allow you to plug in all the different specs and
information about the cars you're looking for and then they'll tell you
what's a fair price that you should be paying now you can use Kelley Blue Book
as well but what I'm trying to say here is that if you just go online and do
some research you're gonna be in a lot better position to negotiate a car and
seriously if you don't do your research you're gonna end up in a car that you
didn't want in the first place and you're gonna want to sell it in six
months because you hate it so just do your research before you go to the
dealership and you'll be just fine now the next key step is to actually
negotiate the price of the car that you're buying I'm gonna tell you exactly
how to negotiate car deal so the first thing you want to
do is you want to get on the phone and you want to call every single dealer
that's in your area and find out what they want for the specific car that
you're looking for now if they do want their business they'll just tell you the
real numbers over the phone so that you don't have to play a bunch of games and
you can just go into the right dealership that you want to now if they
tell you that you have to come into the dealership in order to get the price
then don't even bother doing business with them because they're not giving you
the respect that you deserve right from the beginning
now once you've made all the phone calls and you're confident which dealership
you want to go with go ahead and head over that now once you've gotten to the
dealership and you find this specific car that you want you need to lock in
that price first thing and I'm talking about the exact price of the car and not
the monthly payment because monthly payments can fluctuate just based on
changing the terms so let's say that the car you're looking for is listed for
fourteen nine and that's a pretty good price based on the research that you've
already done now you've already got a good starting point because of the phone
calls and the research that you've done but you don't know how much the
dealerships paid for it maybe they only paid thirteen five for the car but you
have no idea now if that were actually true they could potentially make about
fourteen hundred bucks off of that deal and that's not even including a trade-in
or financing different things like that and I know that businesses need to make
a profit in order to stay in business but there's a point where they're just
making too much money off of one deal and seriously 1,400 bucks isn't even
that much compared to some of the really expensive used cars and the margins that
they haven't knows now that's the thing that really sucks about buying cars
these days is because you have no idea how much money they're making in the
deal there's no transparency when it comes to buying cars from the consumers
point of view so what you can do is you can at least try your best to negotiate
the best deal possible so that you don't have to think about it now this is how
you negotiate the car's price but you've got to be confident in order to make
this happen now if you've got a timid type personality then you've got to
understand that you are always gonna get screwed on these kind of deals unless
you fake your confidence so I don't really care if you're not naturally the
confident type you've just got to fake it in order to make this happen so this
is what you've got to do you've got to start with an asking price that's fair
and realistic for the amount of money that you actually want to pay for the
car so for instance let's say that you lowball and you ask for $9,000 for the
car well the salesman is just gonna politely
walk you out of the dealership and say have a good day because that's not fair
and that's not a realistic price the dealership does have bills to pay and
the salesman probably wants to keep his job so just make a realistic and a fair
offer here if it were me personally I would offer $13,900 for the car and I would
stand by that price and the only thing that sucks here is that you have no idea
how much money they're making on that car but just be confident in your offer
and you'll be just fine and you won't have buyer's remorse and you can be
confident here because you at least know based on your research that the car is
worth a little bit more than that you just don't know how much the dealership
is gonna make off the deal so just be ok with the number that you got from the
research and the offer that you're making on the car so that you can be
confident so right after you make the offer the salesman will say something
like well let me go talk to my manager that's a really low offer we'll see what
we can do now he's gonna come back with a pen and paper and he's gonna write
down a bunch of financing and a bunch of numbers and all sorts of stuff like that
but the only thing you need to pay attention to is the actual price of the
car and my bet is that the number on the car is going to be $14,500 which
is not the $13,900 that you asked for he'll still make you feel bad that the
company's not making any money and that that's about the maximum amount
of money that they can sell the car to you for and if it were actually true
that they weren't making any money on the car and at this point they would
just walk you out of the dealership and they'd say have a nice day because they
really do need to make a profit on the car so just keep in mind that if they're
not kicking you out of the dealership then you're still worth their time to
them so from my personal experience I was in sales for five years and I can
tell you that there is always a point in a negotiation where it's still worth
getting the sale there's always going to be a point where the salesman can either
make it happen or he's got to have you leave so even if the salesman's
Commission has been completely slaughtered by your offer it still might
be worth it to them because of monthly sales and yearly sales that they're
trying to keep track of so at this point just ignore all the numbers on the paper
and focus in on the price tell the salesman that you can't afford anything
but the $13,900 that you offered and that you'll just leave if they can't
do that for you now at this point he'll go back to the manager once again
and then he'll come back with a new number this time it'll be $14,200 and he
will tell you straight up that they have no money to be made on that car
so now just be confident here and offer once again the $13,900 and just tell him
that you'll leave and seriously don't feel bad if you need to leave here
because it's really easy to just go to one of those other dealerships that you
already called and work with them instead so now the salesman will leave
to his manager once again and this time the manager will come back with the
salesman now if they can't afford your offer you'll know that by now but at
this point you're going to be talking to the salesman and the manager now when
you're talking to them they're gonna give you a whole bunch of bullcrap about
how they're not making any money and how fourteen thousand dollars is the lowest
they could possibly go on the car now I'd say fourteen thousand dollars is
close enough to the thirty-nine that you offered so just say yes and make it
happen the thing that sucks here is that if they would have just offered fourteen
thousand from the very beginning you probably would have been just fine with
that and you wouldn't have had to waste any time but that's part of the
negotiation process because if you don't go back and forth a few times then
they're likely to make more money off of the deal and then obviously you on the
other hand are gonna be spending more money on the car I'd say that going back
and forth about three times is usually the magic number and I'm sorry that this
sucks but you're gonna have to do it every single time you buy a car in order
to get the best deal now I'm not gonna go into a ton of detail here but if
you've got a trade-in you're gonna have to do the same stupid game once again
you've got to make sure that you get an excellent trade price too otherwise
you're just gonna end up breaking even so basically if you get a really good
price on your car but you've got a really crappy trade-in then that's not
gonna work overall you've got to get your trade up here where it's even so
that you get the best deal overall now I do want to make a point here that if
you've got a trade-in for the dealership keep in mind that most states will
actually subtract the total of your trade amount from the total price of the
car helping you with the sales tax so let's say that you buy a twenty five
thousand dollar car and you have a trade-in that's worth $12,000 so let's
pretend that the sales tax rate in your state is about seven percent so what
this means is that you're only gonna pay sales tax on the difference which is
thirteen thousand dollars instead of the twenty five thousand dollars that you
started at so if you've got a car that you want to sell that's actually worth a
lot of then it might be worth considering going
through the trade through the dealership so let's say that you have a car that's
worth like $5,000 and the dealership only offers you $3,000 for the car well
even with the tax advantage it's not gonna be worth that extra $2,000
so you'd be better off just selling it on your own and whether or not you want
to sell your car on your own or do a trade through the dealership that's just
up to you I've done plenty of trades and they've worked out fine
now that you've negotiated the price of the car and the trade-in it's time for
the final key step of negotiation which is the financing now this part of the
negotiation process can really screw you over so pay attention as to what to do
when it comes to financing the first thing you want to do is you want to make
sure you get the best interest rate for the car loan that you're trying to get a
lot of dealers will actually get a tiny little cut of the interest rates so it
might be in your best interest to check with your banks before you go into the
dealership to check their rates but I've actually found that a lot of the big
dealerships are pretty honest when it comes to competitive rates so what you
see at a bank is going to be exactly the same as what they're offering you just
do a little bit of homework here so that you have an idea if they're getting a
cut or if they're not getting a cut so once you've got the interest rate
figured out you've got to also understand that you've still got taxes
and fees associated with your car as well
now taxes and fees totally suck when it comes to buying a car but I'm gonna
teach you how to tell if it's a tax or if it's just a bullcrap fee for the
dealership to make more money the way that you can tell that it's a legit feed
that you have to pay is if you don't pay sales tax on the fee you're not gonna
have to pay sales tax on a state registration or a licensing fee or
anything like that and if you do have to pay sales tax on the fee then that's a
good reminder that it's probably a fee that you don't have to pay there's a
couple fees that I've always gotten used to and one is called VTR and the other
one is called the doc fee now VTR which they call vehicle theft registration is
usually about 300 bucks and I've always been able to get out of that one now the
other feed that I'm used to is called the doc fee which is also about 300
bucks but I have never been able to get out of the document fee so if you have
let me know in the comments because I've tried really hard and I've never been
able to get out of it now at this point during the financing you want to make
sure that you get all the applicable rebates and all the different things
associated with saving money on the vehicle
now if the dealership offers you an extended warranty or some sort of an
interior cleaning protection program keep in mind that those are negotiable -
I'm not gonna go into a bunch of detail here but just don't pay full price for
an extended warranty if you want something like that and don't pay full
price for some carpet cleaning thing either now finally after all of this is
done you can sign the paperwork and you can drive away knowing that you
negotiated the car the best that you possibly could and now you don't have to
have buyer's remorse like most of us do after we buy a car now once again I'm
Jason with the honest finance Channel if you did find this video helpful feel
free to subscribe to my channel or at least give this video a like that's all