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Dealing With Car Dealers

When you are in the market for a new or used car, and intend on purchasing from a dealership, you need to be prepared. Being prepared means knowing the in-and-outs of negotiating. If you do not learn the 'art' of haggling, you will wind up paying more for your car; thus paying more money in interest.

One of the main ways to prepare yourself for dealing with pushy auto dealers is to research the vehicle you are interested in. Knowing the details and value of a car will give you good leverage when it comes to negotiating the final buying price of the automobile.

Below are some additional tips that you should keep in mind when looking to purchase a new or used car from a dealership. It is also very important that you educate yourself with the terms associated with car purchases from dealerships.

Tips to dealing with car dealers:
1. Dealers look to earn a profit between 10 - 20%. This means that the bottom line price they want you to pay is about 10 - 20% higher than the invoice price and 10 - 20% lower than what the sticker price of  the car is.

2. If you are steadfast about buying an exact make and model of a car, but the car you are interested in is not available, think about ordering it, or traveling to a same make dealership at a different location. You don't want to settle on buying a car that is not exactly what you want. Dealers are good at 'selling' you what they have, which may even wind up costing you more than the car you want.

3. If you are flexible in what you want out of your new car, and the dealership does not have your first choice, you may be able to get a really good deal on your second choice. But, don't let the dealer know that you are interested in settling for something that is not your first choice. Doing this will eliminate your negotiating leverage.

4. Always stay cool and calm while in the dealership. The dealer will take advantage of your excitement and/or nervousness and likely look to get more money out of you.

5. Never hesitate to walk away from a dealership if you not comfortable with the salesman, or if you do not like any of the cars that they have to offer.

6. Ask the dealer about extra factory incentives. It is very common that dealers will be able to offer 'extras' below the factory invoice price as a 'throw in' when selling cars.

7. If you are interested in financing the car, make sure you come to an agreement about the final price of the car before you discuss what you want to pay as a monthly loan payment. Most dealers will look to 'work' the numbers in their favor, resulting in you paying more for your car. Also, if you are looking to finance with a dealer, beware of a pre-computed car loan that uses the Rule of 78 formula.

Dealers may offer you a 0% financing deal. You will want to learn more about this offer before you commit.

8. Know what you have to pay for, and what you do not have to pay for. When buying any type of new or used car, you are required to pay for licenses, taxes, destination and registration charges. However, you are not obligated to pay for delivery, handling, sales charges, etc.. You do not have to pay for any fees that are not listed above as obligatory. If a dealer tries to make you pay them, demand not to. If they still look to charge you any of these unwarranted fees, you may have to walk away from the deal.


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