Get a good deal when buying a car

I’ve bought a car or two in my lifetime, and helped a few friends who were intimidated by sales people shop for them, too. I hesitate to say I know anything about this because I really don’t, but I’ve always gotten what I felt were good deals, and here’s how I’ve done it.

Very Important Tip#1: they will give in on some points, but try to make it up on others. For example, they may give you an awesome offer on your trade-in, but swear they can’t negotiate on the dealer-added options you don’t want to pay for. You need to be forearmed with knowledge.

If you’re trading cars, go to the dealership knowing two things:

What you can realistically sell your current car for if you sold it through the paper or something like that, and what the Bluebook value for it is. A guest writer at GetRichQuick says never to trade in unless the car has major problems and he may know more than I do, but I disagree. I’ve always gotten top value for my trade-ins by demanding what I know the car is worth. Once I got about a thousand bucks more than the car was worth.
What current interest rates are. Call several banks, give them an honest appraisal of your credit, and ask what sort of interest rate you should expect. Since you can actually get a loan via a bank instead of the dealership, and the dealership wants your interest, being able to tell them “I can get an interest rate two points less than what you’re offering” gives you negotiating power over the interest rate.
Talk interest rates with more than one dealership, especially if the bank rates aren’t great. “I can get lower interest at the Chevy dealer, and Chevies are cool, too” gives you negotiating power, too.

While you’re talking to sales people:

Don’t want any one car too badly. If they know your heart is set on a certain model, that works against you. If you show equal enthusiasm for several vehicles, and maybe even let them know there’s also another brand you’re looking at that they don’t sell, they have to compete.
Be ready to walk away at any point. During my first car purchase, the numbers he kept giving me for the monthly payment scared me to death, so I kept sincerely saying, “I know you’re offering me a good deal, I just don’t think I can afford it. Sorry.” To my naive surprise, he kept coming back with better and better numbers. In the end, I thought I’d probably gotten screwed once we reached a number I could handle, but when I looked up the value of my inherited trade-in, the value of the car I’d just bought and the available interest rates to someone with my credit, I realized I really had accidentally gotten a good deal.
Don’t do that “I’m too cool to deal with you unless you beg me on your knees” thing that irritates sales people and makes them give even less. They know you’re just posturing and resent it – but unlike you, they’re willing to look defeated in order to flatter you into thinking you got the best of them when in fact they put one over on you.
Instead, just be casual. Tell them you’ve just started looking and you’re not even sure you really want to get a new car yet, that it’ll probably be a few months down the road before you buy. This is plausible, so now they’ll have to entice you into buying now.
For new cars, buy at the end of the model year, around September 30th. They’re looking to unload what’s about to become “last year’s model”, so you can get amazing deals on these brand new cars.
If that doesn’t work for you, buy at the end of a month when they’re hustling to meet sales quotas. Be on the lookout for one rarity – the dealership that’s sold all it needs to and doesn’t really need your business. This is pretty unusual (most sales people never feel they’ve gotten enough), but if it happens, move on to another dealership.
Rebates and incentives can rock, or can be false economies. Be aware of whatever a certain brand or dealership is offering, in case the dealership, ahem, forgets to mention it. But don’t assume these incentives are a great deal – they’re going to try to make them up elsewhere in the negotiation. You may find opting for a model that doesn’t come with an incentive gets you a better deal than the one that does.

This is not a complete list. There are tons of different opinions about how to get a good deal on a car, and you should check other sources. Consumer Reports is a great source for learning about the cars available in your price range, and important information like how well they run over time and handle crashes.

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