Ways to Save Money

Never Pay Full Price for a Car Again, Even If You Hate Haggling: 5 Tricks From a Former Sales Manager

January 15, 2016
by Van Randon
Contributor
how to buy a car

During my six years as a car sales manager, my job was to “bump” haggling buyers — to convince them to pay more for a car.

Believe it or not, there’s an art to bumping. People hate buying cars, but they prefer to haggle because they think they’ll get the best deal.

I understand the rationale.

The Internet helps buyers be savvier, but you likely only buy a new car every six to eight years, so you’re probably at a disadvantage compared to the sales manager, who haggles every day.

To give yourself the best shot at a decent price, use one of these five strategies. Here’s how to buy a car the smart way — without getting bumped.

1. Focus on Loss Leaders

For weekend sales ads, the dealer deeply discounts one or two cars, to the point where they’ll sell at a loss.

The dealer then combines the deep discounts with any available manufacturer rebates — meaning it’ll likely be the best deal you’ll find.

However, the sales is first come, first served. Plan on showing up early Friday morning, and you’ll be in and out of the dealership quickly.

Downside

The car probably won’t be your favorite color or have every option you want.

Plus, you have to be there early Friday morning. This strategy’s not ideal if you’re picky — or can’t skip work.

2. Use Discount Buying Programs

Third parties have pre-negotiated agreements with manufacturers and dealerships, often below the dealer invoice price — or the cost for the car alone.

Participating dealers agree to take a low-pressure approach, and usually only one dealership will contact you. Expect available manufacturer rebates and incentives with the price discount.

Through Costco’s Auto Program, my customers got anywhere from $2,000 to $3,000 off MSRP.

I once had a customer who got $4,000 off — before rebates — making the $50 annual membership fee well worth it. Members also get 15% off accessories at participating service centers.

USAA’s Car Buying Service comes in at a close second, helping armed forces members save an average of $3,400.

Not a member of Costco or USAA? TrueCar and Edmund’s Price Promise offer everyone free buying programs on new vehicles. Sam’s Club and AAA partner with TrueCar for their members.

In my experience, Costco had the best deals and the least hassle, but use at least two programs to get the best possible deal.

Downside

Discounts are for in-stock units only, and special orders are exempt.

3. Try the Shotgun Method

Use the Shotgun Method when you know what car you want, you’re ready to buy and you don’t want a salesperson calling you.

If your car will be a special order, use this method to get your best deal. Do research first, then send this email to all the dealerships in the area:

“I am buying a [year, make, model] in [color] with the [options package, trim level, list of options, etc]. I am contacting all the dealerships in the area for availability and pricing.

Please send window stickers [or information for used vehicles] for cars you have in stock that fit my requirements, and the best out-the-door price for each car to [your email]. Please line item the dealer discounts, manufacturer rebates [if new], taxes and fees separately.

I will email the dealership with the best match and price tomorrow to reserve the car and purchase it, so please respond promptly. Thank you in advance.”

You want at least two responses, but having more is better.

Email the dealers on a Wednesday or Thursday. Dealerships get busy on the weekends, and you’ll have a better chance of catching an upcoming weekend sales price.

Downside

You won’t usually get as big of a discount as you will with a buying program, but this strategy is still pretty effective.

4. Target Aged Inventory

If a used car sits on a dealer’s lot for more than about 45 days, the dealer’s losing money every day it doesn’t sell. For really aged inventory, the dealer will aggressively mark down the price to stop the bleeding.

Take advantage of their motivation to sell.

If the car has a price marked down lower than anything similar anywhere else, it’s probably aged inventory.

If you don’t see anything similar on the lot, casually ask the salesperson how long the car you’re looking at has been there. If the answer is less than 45 days, expect to haggle.

Downside

You can try to haggle, but expect a no. Looking for aged inventory is more effective with used cars, but it could work for a new car.

5. Look at Executive or Demo Cars

Executive cars are top-of-the-line, have at least a thousand miles and are fully loaded. Since they’ve never been registered with the DMV, they’re technically new cars — eligible for any factory rebates.

Ownership of a dealership has its privileges, including driving the sweetest cars in inventory.

Dealerships usually advertise executive cars and show them in their online inventories — though the cars may actually be in the owner’s driveway. It may take a day or so to get the car back to the dealership — and it may look a little lived-in — but it’s safe to assume the owner babied the car.

The dealer will usually handle cosmetic fixes and any pre-sale maintenance at no charge.

New car warranties usually start the day you purchase the car, regardless of the starting miles, Be sure to read the fine print on the warranty before you sign.

Downside

Some states don’t require dealerships to report executive car accidents — so always ask.

Combining Strategies for the Best Deal

Adding a little creativity to these five strategies may unearth even better deals.

For example, compare pricing between loss leaders, your discount buying program and the Shotgun Method.

By combining research with one or more of the strategies, you’re well on your way to saving thousands of dollars on your next car purchase — without any haggling.  

Your Turn: Do you know any effective car buying techniques, especially if they don’t involve haggling? Let us know in the comments!

Van Randon strives to help others save money and time as an entrepreneur and freelance writer. He loves to eat exotic foods while reading a good book.

by Van Randon
Contributor for The Penny Hoarder

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