Learn what type of car buyer you want to be and the type you definitely don't want to be!
Learning how to buy a car for Maximum Savings is really not that difficult. Sure, it will take a little time and some research, but it's easy once you learn the rules of the game.
A key component to identifying what it takes to save 2, 3, 4 or even $5,000 and possibly more, is what type of buyer you want to be in order to take full advantage of all that free money floating around on the negotiating table.
It can either go to you, or to them. You decide!
Of these 7 different types of buyers there is only one that I feel will truly allow you to dominate and control the negotiations to realize those huge savings.
Be the wrong kind of car buyer and you could possibly be paying for the salesman's next Hawaii vacation. I hear it's beautiful this time of year...
Let's start here with the absolute worst approach you can take for buying a car and move our way down to what I feel is the only way to buy a car.
7) The Laydown
I hate to say it, but if you fall into this category, then you deserve what you've got coming to you. To be in this category you'd have to have done no research and blindly walked on to a car dealers lot expecting the nice, 100% commission, car salesman to take care of you.
This type of car buyer says yes to just about anything and has no clue what the vehicle they are buying is worth, how much their trade is worth, what finance rates they qualify for and on and on and on... "Sounds great! Where do I sign?"
$6,000 in profit later that nice car salesman is going to gladly shake your hand and congratulate you on your new car, while contemplating how to spend their fat commission.
Fortunately for you, you don't fall into that category, because you've made it here and are planning on reading the car buying guide and its Steps to Buying a Car shortly after you are done here. Right?
6) Payment Buyer
Be careful here, as somewhere between 85-90% of all customers financing a vehicle will fall into this category and trust me, car dealers know this.
The car dealer will intentionally steer your attention away from important things like selling price, your trades value and simply try to negotiate payments with you.
The tricky part here is that there is a lot of flexibility on the dealerships behalf and what they'll make look like huge savings was in reality all just fluff from the beginning.
What does this mean? It means Payment Buyers will typically pay full retail and accept hundreds to thousands less for their trade in than it is really worth.
Do yourself a favor and do not get overly caught up in the payments and remember the more you negotiate off the selling price or the more you get for your trade will automatically lead to lower payments.
5) Finance Rate
The Finance Rate car buyer will focus almost exclusively on the financing the dealership is able to arrange for them. They have typically already checked rates with their local bank and/or credit union and are simply looking for you to beat that rate in order to make a deal.
Now that's not a bad idea to make the dealership compete to arrange your financing, but as a stand alone negotiating tool it is only minimally effective.
4) Trade In Value
Yes, I know your trade in is a super clean, one owner, regularly maintained, with new tires and a golden engine, one of a kind machine, but don't obsess on just this one number. Do, and they will surely make you pay in some other area.
I will be creating a page shortly to discuss negotiating with your trade to maximize it's value and eat into the dealerships gross profit, but in the mean time it's important to remember the other areas dealers profit as well.
3) Selling Price
Not a bad place to start, but as with all those mentioned above, you do not want to get so caught up in the sales prices that you forget your trade in is worth $2,000 more than what they are offering you.
A negotiation should be cool, calm and collected...Keep all your ducks in row and don't fall for the three card monte happening before you.
2) Out the Door (OTD)
Very similar to the car buyer that negotiates price, but at least you'll know the bottom dollar amount. How many bogus fees are stuffed into that OTD amount? Are you paying for etch, paint treatment, documentary fees, etc... Focus on all the numbers to ensure the best deal.
1) Every Penny Counts
The only way you should buy a car! Every Penny Counts!!! Don't ignore any of the figures listed above. Every penny literally counts, so make sure to count them all.
Do not lose sight of all the aspects of a negotiation. Selling price, trade in value, finance rate, of course, payments count, but don't focus too much attention here and definitely don't be a laydown!
Do your homework, be a smart car buyer and learn how to buy a car for maximum savings!