Learn how you can save $3000-5000 off new car, without doing much “extra” research or spending ours negotiating with the dealer. This is not some gimmick or a latest Japanese Jedi Mind trick. Also you want have to like Ramit Sethi’s Indian parents camp out in a dealership and negotiate for a week. In fact, any one can use this method, and save a minimum of 3 grand (and often more) off a NEW car purchase.
My method is based on doing as little research ad spending as little time as possible, while getting the best results. I only do the most effective things to get the lowest price.
Reading time – 7 minutes.
How I saved over $3500 without doing ANY research
In September I bought a new Mitsubishi Outlander SE (Base MSRP – $24,645) for $21000. That is a $3645 off the “Base Sticke Price”. Now my car actually had some “optional equipment” which you cannot exclude form the deal, so the sticker price was higher. The wierd thing is that 95% of all dealer stock cars include the stupid “optional equipment” such as $600 floor mats, and other useless crapp, and if you want to buy the car, you will have to but the add-ons.
Now if you walk into a dealership, they will try to sell you the car at sticker price, since that is when delaer makes the most money. But you can use the Internet to your advantage, and save big in a process.
Here is you you can get the BIGGEST discount off the new car:
Buy Last Year Model
Most people do not know or understand this, and go shopping on some holiday or sales event – this is WRONG. Unless you absolutely need the car NOW, wait until the autumn to buy the car. Here is how this works.
Every year, manufacturers update the models, and this ALWAYS happens in the fall months. That is why in Sep. 2014 you can buy a 2015 model. And as soon as latest models come out, manufacturers NEED to sell last year cars (which are really not last year at all). That is how I bought a “last year’s” 2014 model in 2014 … completely counter-intuitive, but whatever.
To stimulate the sales of “old” models, manufacturers issue “sales” and discounts, and dealer rebates, which are better than any “holiday” sale discount.
In my example, the manufacturer’s rebates and discounts totaled $2500 (while salesman told me it is $1500 – liar).
Getting best Last Year Model Deal:
1) Start researching EARLY: Choose a few models that you want to buy, and find out when the model year is updated, and when new cars will arrive at the dealership.
Go in 1 or 2 weeks after new models start coming in. At this point there is still enough “last year models” to choose from.
If you wait too long, all best deal will be gone!
Also, each manufacturer starts new model year at different times. Some are as early as August, while others are in October. So you should start your research before July.
2) Go to the websites of at least 3 deales from which you may buy – for example if you are buying a Camry, go to 3 local Toyota Dealer websites. Check out current sales, new inventory for LAST YEAR models, and choose the once that you like.
3) This will save you an averasge of $800. Look for no “Optional Equipment” cars. As stated above, most cars will ahve $600-1000 of uselss options, such as floor mats, trunk nets, some special paint (my Prius had “Pearl White” paint that cost me $295 extra and $400 worth of “all weather” floor mats). The 2014 Outlander that I bought had only $69 carpets – so the sticker price was pretty much the same as MSRP.
Go into a lot by yourself and just look at cars that you may want to buy and look at sticker prices to see if you can find one without unnecessary add-ons.
Note: I bought an SE model, which was 1 step above the base ES. However, the dealer lot had 5 ES models that had a sticker price of same $24000 as my SE. This is because they all had useless “options”, while the real trim on the ES model is really entry level.
Here is a list of extra features you get in SE, that you don’t get with ES:
- Alloy Wheels (versus steel rims with hub caps)
- Touch Screen Audio System & Backup Camera (versus basic radio)
- Start Button (versus key ignition)
- Heated Seats
You don’t get Navigation in basic SE, but I don’t care for that. However the 4 items metioned above vere very important to me, and the price for both ES and SE models that were on the lot was the same (within $300).
4) If you find a car that you really like on both price and specs, but it has a SOLD sticker on it, ask the salesman if it is REALLY sold. My car had sold stick on it that dealer forgot to remove when deal fell through. If I didn’t ask, I would never get it, and it was the ONLY SE model left – all others were ES.
Let Dealer Negotiate Against Themselves
Ask and Insist on Insane Discount, but do so in a very friendly and polite manner. Negotiate for your best deal, but don’t be rude. Salesmen and managers are HUMANS, so if you offend them, you will not get a deal. Basically be polite, but persistant.
Start by asking “what is the best deal they can give you” – do not answer their question on “how much are you willing to spend” … just give them no specific answers, like “let’s see waht you can offer first”. If the car retails for $20000 and you offer $15000, you will be kicked out of the dealership. But if you get dealer to “offer you” $17000 (not OFFER YOU instead of AGREE to your offer) then you can ask for $15500 and settle somewhere aroung $16000-16500.
Do not believe in “this is our bast/last offer” as it is a standard trick in Dealer’s sales techniques. Read next – get discount based on Competitor’s prices:
Use the internet to Get Best Competitive Prices on the spot
I, as most people did not do much research beforehand, and went straight into a dealership. I testdrove the car, and the sales guy began his pitch. DO NOT GIVE INTO SALES PRESSURE! Remember – salesman IS NOT your friend – he’s there to sell you the car and make money off of you!
So, ask the guy what the best offer he can give you (force him to negotiate against himself). While he does the “walk to manager’s office” routine, pull out your phone or tablet or laptop, go to manufacturer’s website, and check out latest sales, rebates and discounts, and compare them to the dealer’s offer.
Also, install an app or go to the following 2 or 3 websites: TrueCar.com or CarGurus.com or Cars.com and search NEW cars inventory within 100-200 (or even 500) miles radius. Find the BEST 2-3 deals and ask for manager. When manager comes, only then SHOW them the best deal for the “same” car that you want to buy, and tell them so and so dealler advertises this price without any negotiation, and if they want your business, they need to at least match that price. Most managers will give you the deal. Don’t explain to them that the car is 3 hours away. Just tell them its a dealer few towns over.
PS – this one I did not do, but I got really good deal anyway!
Negotiate the Deal First, and then Negotiate Trade-In (if any)
Dealers will ALWAYS low-ball you on trade-in. Their typical starting point is 50% off delaer used price or 30% lower that fair trade-in value.
Here is what youu should do. Open CarGurus App (or website) and find a comparable car to your trade (same year, make and model). Display results by “newest listing first”, this way you won’t see best deals (lowest prices).
Show the results to the used cars manager (the guy with whom you negotiate the trade-in value). Here is my example:
I had a 2010 Prius with very high miles – 130K, and some cosmetic issues. The dealer wanted to give me $5000 for trade. Really – a 4 year old car for 5K? No!
So I found same year cars and showed him that with around 100K, cars go for $12000-13000. And therefore 30K miles do not cost $7000.
At this point, dealer want so close the deal, and you cna get an extra $2-4K for your trade. DOn’t listen to dealer’s BS reasons why your trade costs so little. Sho them live inventory and insist that you will not go for less than 70% of average going price for your trade. In most cases it will work.
If you plan to sell your used car any why, it is a good idea to trade it in, as this way, you will reduce your sales tax.
In my case, I gor $7000 for the trade, and think it was a good deal for me, because to sell it for good money, I would have to do a lot of expensive cosmetic bodywork. Without fixing cosmetis, I would not get more than $8000 for it, but would rather wase a lot of time showing the car, and since where I live there is no free street parking, I would also need to rent a spot, which costs $200/month. Therefore, I saved a lot of time, and got a fair deal in my opinion, as well as reduced my sales tax by $437, making my real trade in being $7437.