Like any other area of personal finance, buying a car is a numbers game. Informed consumers arrive at a dealership with an idea about a car’s storage capacity, performance, and how much they plan to spend in monthly payments. Those numbers are all important. However, you might be letting salesmen get the upper hand if you don’t think about a negotiating plan, too.
The negotiation that takes place during an auto sale is another numbers game. Trained professionals who work at the dealership take classes on the subject and spend most of their days honing their skills. They know how to gain the upper hand. If you rarely negotiate in your line of work and buy a new car once every 10 years, the numbers are stacked against you.
Peter Levy, founder of the consumer car-buying site Carjojo, dug into the many challenges you might face when negotiating a vehicle purchase. Using statistics from the field as well as studies in behavioral science, Levy found techniques that put shoppers on an even playing field at dealerships. Here are 10 tips for matching or beating salesmen at their own game.
1. Learn dealer buzzwords
If you asked most people about a car’s “invoice price” versus the manufacturer suggested retail price (MSRP), you will get confused looks. These terms become important when you look for the destination (or “delivery”) charge. An invoice price includes destination fees, so there is a chance the cost (usually over $800) will get added again to a sales contract. Whether it happens through carelessness or malice, you don’t want to pay twice. Also, keep an eye out for “dealer sticker price,” which is where you find other negotiable fees.