The Time of Month to Get the Best Price

Automobile dealers usually pay their sales staff a commission based upon the amount of gross profit the salesperson develops from the sale of the vehicle. In addition to this regular commission, there are usually monthly volume bonuses paid when a certain number of units are sold.

The later part of the month is the time that the sales staff is eager to get the needed units to reach their goal so as to collect substantial bonuses that are offered. This includes the sales managers and assistants. Late in the month is the time to make your grand entry into the dealership to negotiate a fair deal.

It is not time just yet. There is some homework to be done.

What to Do Before You Go to the Dealership

The hardest part of a car deal is determining the actual value of your trade-in. Market Guide Books are merely an estimate. Year model, mileage and condition of your trade-in are the most critical aspects of its value.

To get an idea of the value of your trade, you can take two different approaches. In the first approach you can go around to various Used Car Lots and/or New Car dealers Used Car Departments and get a bid on your trade-in. Tell them you want to sell it and would like an offer. Do this at three or four different places and you should have a good idea of your trade-in's value. While this approach is effective, you may want to consider a second approach that may require much less time. Simply visit an auto-appraisal website (i.e. http://www.edmunds.com) where you can instantaneously obtain fairly current market values for most used and new vehicles. 

Do not waste your time taking your trade-in to car lots that do not handle your type car. For example, a used car dealer that handles late models will not be interested in your older trade-in. If you have an older trade-in, most New Car Dealers will wholesale it to a Used Car Dealer that handles older cars.

Now armed with the value of your trade-in, call some dealers that handle your choice of brand and ask for the fleet department. If you are a member of a credit union, work for a company or work for yourself, you can buy through the fleet department. Here you usually don't have to go through the games that are played out with a floor salesperson.

Make an appointment to see the fleet manager on a day near the end of the month.

What to About Your Credit/Score

Credit flaws can put you in a weakened trading position. People who have credit flaws historically pay more gross profit to the dealership than those with good credit.

Check your credit. You can get a free credit check once a year or you can get your report for a small fee. To obtain a copy of your credit report send a letter requesting this information to any of the three major credit reporting services, TransUnion, Equifax or Experion. You can also obtain this credit report information online by visiting a related website (i.e. http://www.myFICO.com or http://www.mycreditscore.com  ).  Credit scores (or FICO Scores) are calculated for all indiviuals by an independent firm called Fair Issaac and the scores are based on a number of criteria including past credit history, number of times you've applied for credit, delinquent credit history, charge-offs, bankruptcies, etc. When an auto dealership promotes a 0% finance special you have to have a high FICO Score to qualify for such offer. By knowing your FICO score before visiting the auto dealership, you will know immediately whether you qualify for the special financing.

Why are Credit Scores so important? 

Credit Scores directly effect many financial transactions you do, including:   buying a home with a mortgage, borrowing money to purchase a car, applying for credit cards, and even applying for a job.  Making sure your Credit Score is as high as possible is one of the easiest ways of saving money every month.

Your Credit Score tells a lender very quickly and efficiently how likely you are to default on a loan.   The lower the Credit Score, the higher the interest you will have to pay - because the lender has to take on more risk to lend you money based on your past credit history.

Make sure you take steps to increase your Credit Score today so the next time you apply for a loans, insurance, credit cards, or even a new job you will be confident about your high Credit Scores.

Steps to increase your Credit Score:

1.  Get your Credit Reports and Scores - If you don't have this yet, this is crucial because you need to know exactly what is on your current Credit Reports and what your current Credit Scores are.  By understanding this information, it will tell what actions you need to take to make sure your Credit Score is as high as possible.  Consider using Equifax Gold Credit Monitoring because you can run your Credit Reports Monthly for Free and you will see your actual FICO Credit Score. It also monitors how your actions are affecting your Credit Scores.

2.  Using information from your Credit Reports and using the Equifax Gold Credit Monitoring, (gives you insights into your credit report) and explain why your Credit Score is low.  Is it because of high debt levels, derogatory (negative items, late pays, charge offs, etc.) items, or a mixture of both?

3.  Using the information provided on this site, learn how to fix issues related to high debt levels and removing derogatory (negative) items on your Credit Report.

4.  You might also need to use other resources to increase your Credit Score.  Here are some recommended resources:

·          Are you busy and want somebody else to legally dispute items on your Credit Report for you? - One of the best ways of increasing your Credit Score is by deleting negative information from your Credit Report.  I recommend using The Lexington Law Firm because of their excellent track record in the credit repair industry.   Remember, Credit Repair is perfectly legal if done correctly.  The Lexington Law Firm legally disputes items on your Credit Report for you, saving you the time and hassle of doing it yourself.  (It's like mowing the lawn; you might want to have somebody else do the work for you!) They have helped more than 300,000 clients since 1992, and their service costs $39/month.  The Lexington Law Firm also offers a full money back guarantee in case they cannot remove items from your Credit Report.  If you have negative items on your Credit Report and can afford The Lexington Law Firm ($39/month), it is one of the easiest ways of raising your Credit Score.

·          Do you want to dispute items on your own? Do you have high debt levels and need to negotiate with your creditors? - I recommend using  The Credit Secrets Bible for advanced Credit Report disputing techniques, tips on negotiating with creditors, and sample Credit Report dispute letters.  Many of the techniques from this book are the same techniques lawyers use, however there is nothing stopping you from using them yourself - and not paying them their fees.  The Credit Secrets Bible also contains insider advice on how to negotiate your way out of debt, including collection agencies.

·          Do you have at least three open credit lines?  Did you know that not having any credit history also means having a low Credit Score?  You should have at least 3 open credit lines according the industry information.  If you do not, I recommend applying for a credit card at Your Credit Union.

·          Do you have high debt levels (over 5K in debt) and don't own a home?  If you would like help in negotiating your debt with your creditors, I recommend CareOne Credit because with one short no obligation form they will contact you to see if they can get you out of debt faster.   CareOne Credit can negotiate for you and help you lower your debt payments.  The form is free, so you having nothing to lose if they can't save you money.

·          Do you have high debt levels (over 5K in debt) and own a home?  If you own your home, you may want to consolidate your debt because it will lower you interest rates and maybe tax deductible.  I recommend using LowerMyBills, the form is free so you have nothing to lose if they can't save you money and get you of debt faster.  The less debt you have the higher your Credit Score will be.

Remember, any money invested will pay for itself many times over because you will qualify for much lower payments with higher Credit Scores.

5.   Monitor how your Credit Scores are changing monthly with your credit actions, again I recommend using Equifax Gold Credit Monitoring.

6.  Make sure you fully understand your past credit mistakes, and do the right things to keep your Credit Score as high as possible for the future.

Dealer's Cost vs. Window Sticker

Being armed with the dealers' cost for the vehicle you want is not the answer to getting something for nothing. The dealer must make a profit. That's pretty clear.

It will not help you to advise the salesperson that you have the dealers' cost. Keep this information to yourself, and you will be negotiating from a position of power. Don't force your meeting to become a contest of wills.

Also, your best chance for a fair deal is to not antagonize your salesperson. You should play the salesperson and be polite, cordial and charismatic. Yet, keep the knowledge of the vehicle "cost" to yourself.

After leaving and applying these 8 tips, you will be able to buy a new car at much better deal than your friends and neighbors who go in cold. You may have to weed out all of the dealer add-ons such as paint sealant, windshield etching Theft Protection and any add-ons that do not interest you.

If the vehicle you are looking for is extremely popular, you have to pay more or wait for dealer inventories to improve. On the other hand, if the dealership has a glut of these vehicles, you may buy closer to dealer's cost than I indicated.

If you are paying a reasonable amount over invoice, and are getting what your trade-in is worth, you will have a great deal. The dealer won't retire to the South Pacific on the profit you allowed him, but it is a reasonable deal for both parties.

Many people ask me what is a reasonable profit. It is not all about profit. It is knowing where you stand, and if you are getting really ripped off. A reasonable profit to me is if I can first afford the vehicle, and how bad do I want it. It would be crazy to me, to walk because some guy like me told you to only pay $100.00 over pure cost. It normally can't be done. Now paying $100.00 over the invoice and letting the dealer make the hold back is another thing. That might work, depending on the amount of the holdback. Most dealers need to gross from $1000.00 to $1200.00 on a reasonably fast moving vehicle. Less on the smaller compact and sub compacts. The factories have cut back the margin between invoice and the sticker in the past 10 years. The main thing is, if you know about dealer's cost and holdbacks and under the table money, you can stand your ground and not be taken to the cleaners.

What to Do When You Arrive at the Dealership

When you arrive at the dealership, go to the receptionist and ask for the Fleet Manager. Never ask a Floor Salesperson for the Fleet Manager, any one of them may claim to be him and you are off into a maze with no exit.

When you are face to face with the Fleet Manager, tell him exactly what you want and/or what vehicle you want to see.

Examine the vehicle carefully as all dents and scratches will be yours once you take delivery. Go over the window sticker and see how and if it differs from your Dealer's Invoice Cost that will detail all standard and optional equipment. Your Dealer's Invoice Cost that we provide will also give the suggested list prices for all of the options, as well as freight.

Take the vehicle on a test drive and see if it lives up to your dreams.

If all is in order, proceed to the office to get the best price. Ask if there are any unadvertised incentives that they are sharing with the customers. Also, ask about any low rate finance deals being offered.

If you are asked to make an offer, refuse until they commit first to a best price. Then you may counter-offer with a figure substantially below your best price. Work from there to the maximum you have set for yourself.

If during the negotiating they spring an invoice to convince you of their "good deal", I recommend you politely refuse, explaining that it really does not matter what the vehicle cost them, you have a target price to pay and arriving at that price is all that really interests you. This takes away some of their "steam".

At some point, they will need to get your trade-in appraised. When you give them they keys, tell them you want the keys back when they are finished with their appraisal. When they return, do not continue to negotiate until you get the keys back.

Do not give any money to show good faith. You can show good faith when they reach a price you can live with. The keys and the good faith money are only to intimidate you and keep you from jumping and running before they have reached their best price. You keep all that is yours and you will get to a "best price" much faster.

The Fleet Manager, if he is real, will not have to run back and forth to the Sales Manager for pricing. If he does, he probably is not the Fleet Manager, but a Floor Salesperson posing as one.

Beware of "payment" offers such as "You can own that car for $450.00 a month, Mr. Customer."

You should know what the payment is going to be after you decided on the price you could pay. This should be already in your mind.

When you reach an acceptable price, it is customary to sign the transaction sheet and leave a deposit. Taxes and other charges will be listed at the bottom of the sheet. Only you will know for sure if they are appropriate. Know you state laws and your tax rate for automobiles...sometimes the tax rate is different.

Handling "Two Sticker, No Dicker" Dealerships

Saturn and a lot of other dealerships have gone to the "Two Sticker, No Dicker" philosophy. They have a way of violating their own policy if they see you are not going to buy at their price.

The way they can get around this is to give more for your trade than the appraisal. You will never know what they really appraised it for, so don't waste your time getting nowhere. You will know what it is worth and implement your own pricing policy and advise them that if they stick to their price you must ask "X" number of dollars for your trade-in.

If you don't have a trade-in and are buying straight out, you may have to shop another brand or another dealership.

Many shoppers report the so called "One Price" policy is not as good a price as you get after going through the "grinder" at the dealerships that operate under the negotiated price philosophy.

How to Handle Your Trade-In

Your trade-in will usually cause the most haggling that you will become involved with. As covered elsewhere in these "TIPS", some dealer's policy is to appraise your vehicle, then keep the keys in the sales manager's office. This is an intimidating trick you don't have to put up with. Merely tell them the negotiating is over until they return your keys. You have the right to jump up and leave whenever you please.

Get this straight in your mind, you are selling a vehicle while trying to buy another. Call it a trade-in or whatever, the fact is you are also a salesperson.

With that in mind, clean your car to the nth degree. Remove all half-eaten hot dogs, papers and all personal items. Remove all papers from the glove box. You can be assured the appraiser will go through the glove box looking for mortgage information, or to see if you brought the title and for just plain nosiness. Don't forget the trunk, make sure your spare tire is bolted down (prevents rattles), vacuum the trunk carpet and wipe down the entire area.

One thing you might leave in the car is brochures from other dealerships. This let's them know, or think, you have been heavy shopping and know your way around.

After the inside is immaculate, wash and polish, if necessary, the entire car. Clean or have the engine degreased. Not painted with lacquer, just cleaned. If the tires are slick, invest in a set of used tires. The appraiser will deduct for a set of new tires if yours are slick. The used ones will be good enough for him to resell your car and not deduct.

Any maintenance receipts that you have for things like tune-ups, oil changes, really anything that will impress you prospect (the appraiser), should be left in the glove box. Trust me, they will be found.

Make sure the power steering belt does not screech and that the air conditioner blows cold. provided it doesn't cost too much to repair. An air conditioner that does not blow cold will be deducted at an amount in the hundreds of dollars. If it only needs freon, get it done. Screeching power steering belts can indicate a faulty power steering, at least that is what they will hit you with.

You see what we are after here, don't you? If they sell you a new car for absolute dealer's cost and give you less than yours is worth by $1000.00, you've made a bad deal. Give the appraiser as little reason as possible to deduct. Keep the price of the new vehicle and the price of your trade-in separate in your mind. Once you are satisfied, you can then talk taxes and monthly payments.

Make certain you have your Service Contract papers and any transfer forms that are needed. This will make your trade more valuable as the dealer can offer the remaining coverage to the next buyer.

The Finance Department a.k.a. "The Business Manager"

Arriving in the Business Office can cost you all that you gained during the purchase of the vehicle. So, before you make a decision as to who finances your vehicle, be sure you shop at your bank, credit union, Mom and Dad, Uncle Walter or any place else you might borrow money. Shopping the interest rate is just as important as shopping for the vehicle; unless, of course you are paying cash.

Have some idea of what you can do before you let every Tom, Dick or Harry check your credit. Each lender will first check to see where all you have applied. A lot of credit bureau inquiries makes you look like you've been turned down, and although your credit is good, each lender thinks the others know something bad. They are a lot like sheep. This is why you should limit the number of credit reports you permit to be pulled.

Some dealership finance companies offer, from time to time, a low rate special like 2.5%. But, the details reveal that you must pay 40% down and finance for 24 months and you must have a blue wart on the end of your nose.

If you can stand the terms, the low interest rate deal is a real buy, it's just that they raise the sticks pretty high. But, if you're a high jumper...

You seldom qualify for the low-rate deal. So, get their best rate with a down payment that fits your budget, tell them you will get back to them. Do not give a credit application unless you know you are going to do business there and then.

After that, you are on your own. You will be offered Credit Life, Accident and Health, (Croak and Choke), Paint Sealant (Mop and Glow) and everything from mechanical zit removers to hand painted neckties during your visit to the Finance Department.

If you consider the Service Contract, remember it does not kick in until the factory warranty expires. So, if time is the factor, the 5 year contract may only pay claims for 2 years, provided the Factory warranty is for 3 years. If mileage is a factor, then be your own judge.

Taking Delivery

Walk around your new vehicle before going into the Business Office to sign the papers. Check for nicks, dents and scratches that are going to be yours forever if you don't point them out now.

It's good to know the Service Manager, if you haven't met him yet. Ask him about recommendations for service and maintenance. Ask if all recall procedures have been performed on you car.

This being done, you will have made a shopping nightmare into a normal business transaction. The keys to a good deal are, shopping your trade-in and knowing it's value, being aware of dealer's invoice cost and shopping the finance rate before showing up at the dealership.