Below is a step-by-step plan of how to get a great deal on your next car without going through a long, drawn-out and painful process. Because of the internet, manufacturers' influence, and competition, much of the older advice on how to buy a car written in books, articles and seen on TV is now outdated and actually makes buying your next vehicle more painful than necessary. And I should know because I have been providing automotive sales training to auto dealers for 25 years and know all the secrets.
With so many sources of information available from dealerships' inventory postings, manufacturers' sites, Kelly Blue Book, Edmund's, Auto Trader, Autobytel, and more, it is clear that information is not in shortage. All this information without a simple buying plan is just information overload, adding unwanted time and confusion. The goal when buying a car should be to know you got a good deal without spending three weeks in research, shopping at six dealerships and spending countless hours in painful negotiations.
These six steps will guarantee you get what you want without wasting time:
1) Approach the dealer as a buyer. Your best offense when buying a car, contrary to popular belief, is to identify yourself as a buyer, not a shopper. Don't be defensive; present yourself as wide open and easy. This will actually make the dealer easier to deal with. The customer that approaches a car dealer in a defensive and pushy way tends to cause the dealer to respond the same way.
2) Price is not your greatest concern. Let the sales person know that the most important thing to you is not price but knowing that you are on the right car. This will be music to the sales person's ears and will make them butter in your hands. Communicate that you are confident than once the vehicle is perfect, the dealership and you can come to agreeable terms. This is going to make the sales process quicker by reducing confrontation and, later, making getting your best terms even easier.
3) Make sure you are on the right vehicle. The single biggest mistake a buyer can make is buying the wrong product. Putting price in front of selection is an outdated buying tactic. If the product is not right, the terms can never be good enough! The best way to determine the right unit is not online or on the phone but at the dealership. A trick to make sure you are on the right vehicle is to look at the vehicles just above and just below what you think you want. Any interest on either of the other two product choices means you are not yet on the perfect product for you.
4) Test drive the vehicle. Dealerships love you driving their products. This makes the dealership feel like they have done their job and provides them with more confidence in giving you their best price. Taking time to demonstrate the vehicle will save you time later and give both parties more confidence when negotiating.
5) Ask for a computer-generated proposal. Ask the dealership if they could please present their offer to you electronically rather than by hand. Because of technological advances, the most progressive, customer-satisfaction-driven auto dealers today utilize software technology to provide the buyer with computer-generated proposals. The proposal should include price, trade figures, purchase and lease payment, down payments and interest rates all at one time. Ask your dealer, "Do you use EPencil or electronic proposals?" Computer-generated proposals avoid wasted time in the negotiations and unnecessary figuring by management. An electronically generated proposal can produce nine purchase payments and nine lease payments in less time than it takes to fill out a credit app. This also reduces chances of mistakes and wasting time going back and forth. Computer-generated worksheets guarantee a full disclosure, complete transparency, and a quick and easy negotiation process that is non-confrontational. Car dealers know that time is important to the 21st-century buyer and that extending the negotiations only negatively affects the buying experience and ownership.
6) How to determine a fair price? Just so you know, franchised automotive dealers in the U.S. operate on about the same net margins as a grocery store: about 2 percent net margin (after all expenses). Most car transactions generate more money to state and local taxes than profits for the dealer. For instance, the taxes in California are 8.75 percent, so if the dealer has a mark-up of 6 percent on a $20,000 car, they will have a gross profit (before any expenses) of $1,200 while the state will collect almost $1,800. Keep in mind that the State of California isn't even in the car business, doesn't wash the car, service it, or inventory the products; it only promises you schools, roads and hospitals for the taxes they collected. If it were not for dealerships' service departments and pre-owned cars, the car dealer wouldn't be able to even stay in business to sell new cars. Can you find another dealer 50 miles away to sell for a couple hundred dollars less? Probably, but your local car dealer, with whom you will be servicing your car, is a human being, too. Remind him when you need something that you came in, didn't create a problem, weren't hard to deal with and made the whole process painless for everyone.
Most auto dealers are not interested in taking advantage of you and are highly interested in making you happy. It is outdated thinking that a buyer has to shop five locations to get a good deal. So the next time you are ready to roll in something shiny and new, just follow my steps: let your dealer know you are there to buy, be sure you are on the right car, ask that they present their proposal electronically and tell them you know automotive sales training guru Grant Cardone. Follow this advice and you will have a great car-buying experience, avoid wasting valuable time and know you received a great deal.
Grant Cardone is Automotive Sales Training Expert and New York Times bestselling author.