Updated on November 4, 2008.>
WHEN YOU'RE BUYING a new car, you want to go> for a ride not be taken for one.
Heading to a dealership is often intimidating since you know it's time to bring your best bargaining skills to the table. Wimp out, and you could wind up paying thousands more for your car than necessary.
Below, we'll show you how to out-negotiate those fast-talking salesmen:
Do your homework
You've had your eye on a 2009 Mazda RX-8 coupe. The MSRP is $26,435, and you're ready to zoom out to buy one. Whoa! Hit the brakes. The fastest way to lose money is to head to the dealership uninformed, says Michael Schatzki, founder of New Jersey-based Negotiation Dynamics, a firm dedicated to training people and corporations on the art of negotiating. "It's one of the few times in negotiations where you know the other guy's bottom line," he says. That puts the dealership in a vulnerable position.
Come equipped with the invoice price, which is how much the dealer paid for the car, says Sheleemia Simmons, an auto price specialist with Consumer Reports. Your opening offer should then be roughly $500 less than that. Go even lower if the dealership is offering dealer cash, rebates or other incentives. Granted, it's not realistic to expect that you'll get the car for that rock-bottom price, says Simmons, but you also won't be making an initial offer that's too high. Expect to pay about 4% to 8% more than the invoice price.
For detailed pricing information, including known rebates, visit Edmunds.com. Be sure to use the True Market Value feature, which shows how much other people in your area have paid for the car. It's a good indication of how open a dealership is to negotiation.
Time your visit right
Try to go during weekdays, advises Phil Reed, consumer advice editor for Edmunds.com. Weekends bring in heavier foot traffic, which is a signal to salesmen that they can be tougher on price.
Alternatively, you could pretty much skip the dealership altogether, says Reed. More and more folks are buying their cars online and, believe it or not, they're getting fantastic deals. To see how, click here.
With many kinds of negotiations, you don't want to be the first to quote a price. But here, it's important to get your offer out first, says Reed. Otherwise, a smooth talking salesman may distract you and get you to agree to a higher price perhaps without you even fully realizing it. (Hint: Smoke-and-mirrors tricks with options and dealer financing can leave you thoroughly confused.) "Their strategy is to make you feel that there is nothing more to be gained by negotiating," he says.
Check that paperwork
Don't let your guard down once you've finished negotiating, warns Consumer Reports' Simmons you're only halfway home. When you're presented with the final deal in writing, go over it carefully to ensure that it contains exactly what you agreed to. Watch out for last-minute additions the salesman may try to entice you with. Remember, extras cost extra money and if it's not something that you're genuinely interested in adding, then you just wound up spending more than you bargained for.