What steps should I take before negotiating the purchase price of my new car?

What steps should I take before negotiating the purchase price of my new car?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: How can I figure out an offer on a new car?; What steps should I take before negotiating the purchase price of my new car? and more...

There are three steps you need to consider before you buy a vehicle. The first step is to know your credit score so that you know approximately what sort of percentage financing you should get if you use the financing at the dealership. Know the maximum you are willing to pay for a car, and know the value of the vehicle you are willing to buy. With those three things you can negotiate with a strong degree of confidence. Another thing to definitely avoid is becoming a payment buyer. Don't go in thinking, “I'm willing to pay $399 a month for that vehicle”, and then negotiate to that number. Dealers and their salespeople are very savvy at getting people to their stated $399 per month price, but doing so at a cost that you don't recognize until much later. Car salesman can do this by increasing interest rate over a longer period of time to get that particular price. It's very common for a salesperson very early in the negotiation process to ask you, “How much are you willing to pay per month?” Never ever answer that question because you are basically giving that salesperson the tool they need for building a program which will be to the benefit of the dealer and not to your benefit as the buyer. The point is never ever share that information; have an idea personally, but keep it to yourself and let the salesperson develop a program for you which hopefully will be below that threshold. Then you'll be a happy customer.