Avtorentacar.com presents you “How Much Money Should I Offer the Dealer When Buying a New Car?”, an article written by Mia LeCron. We hope you’ll find a lot useful information in here.
Avtorentacar.com will present you every article we find interesting and educating, and which has no copyright protection. If available we’ll link the source.
When you go into a dealership, you want to know all of the pricing and costs of the car that you are looking into buying, as mentioned in my previous articles.
You should know the manufacturer’s cost and the dealer’s cost. You need to calculate the cost that the dealer paid for the car and then make a reasonable offer to him if you want to get somewhere. You should also know that the dealer’s price is not the invoice price from the factory. You should know that the dealer’s cost is much lower than the factory’s cost.
| Avtorentacar recommended article: Headlight Restoration Increases Driving Safety If you have cloudy or worn and yellow headlights you are taking a big and unnecessary risk when you drive at night. According to the AAA Foundation For Traffic Safety: An average of 9 out of every 10 cars on the road today has dirty or yellowed headlights that greatly reduce vision and need to be replaced, repaired or restored. |
In order to make a fair offer to a dealership, you need to learn to read a factory’s invoice. Here is what you can expect to find on the factory invoice.
• Base model of the car on it
• All of the options packages
• Destination charge
• Holdback and dealer flooring help
Quick Tip: DO NOT confuse the invoice with the MRSP window sticker because they are not the same.
Contrary to popular belief, dealers don’t have to tell you the invoice on any car. This often gives the dealer leverage over you. They can offer you one dollar over the invoice. You should know that there are hidden factory incentives in the invoice price that lowers the cost of the car for the dealership. It’s no bargain for you.
If a dealership is very quick to show you the invoice, you should be aware that they are fully aware that they will be making money on that car off of you and they can settle at a lower price for the car.
| Avtorentacar recommended article: Highway Bump Tests Needed If you have done much traveling in the nation by automobile or other such surface transportation you have no doubt driven on roads, which were in a state of disrepair. Recently the United States Congress and Senate voted on a huge bill $286.4 billion transportation spending bill, much of which is going to the repair and/or resurfacing and repaving of these roads, highways and interstates. When retired folks buy motor homes to see America, they often put a hundred thousand of dollars into a vehicle and put hundreds of thousands of miles on that vehicle in less than five years. These vehicles after traveling around our great nation, the greatest civilization ever created in the history of the human endeavor, are rattled apart and become as much in a state of disrepair as the New York Toll Roads which they may transverse. |
Knowing this before you walk into a dealership can be your best negotiating strategy. See, they will tell you that you can afford to buy the car at MSRP hoping that you will not then wonder what the actual worth of that car is. Knowing this information can let you make them the same offer.
If you offer a few dollars over the factory invoice (which is the actual worth of the car) then you can open your bid and let them know how much profit they can make off of your offer. Check out these websites if you want to know the factory invoice of a car:
http://www.InvoiceDealers.com
http://www.CarsDirect.com
http://www.Car.com
http://www.Autoweb.com
Dealers are always going to try and tell you that they paid less for the cars than they actually did so that they can make a higher profit off of the sale. Salesmen often try and make you feel guilty by telling you “I’m losing my shirt off of this deal”. In truth, you are the one that is losing your shirt off of the deal, so don’t buy into it.
To calculate what your offer should be to the dealership, you should get the factory invoice price (don’t forget to include the options in this price), and add 5% to that amount. That is how you should calculate your offer the dealership.
When I mention the options, I mean the ones that you can’t avoid. Some cars come equipped with a CD, sun roof etc. and these are fees that you can’t avoid paying so sure to account for these at the beginning. You should also be sure to account for any buyer rebates as well in calculating your offer. So in the end your offer should be calculated like this:
Calculating your offer to a dealership is as simple as that. When you are considering how much you can afford for a car, be sure that you don’t get sucked into paying more than that. If you are unwilling to pay more than your opening offer, let the salesman know that your offer stands firm and how they will profit from the offer. In the end you will get what you want on your own terms. To be certain that you get the drift I will set an example for you.
You are hoping to buy a Toyota Camry. You do your research at DealersInvoice.com, and find that the invoice price is $19,922; MSRP is $22,385. The dealer may offer you the car for $22,000, and shows you the invoice.
You learned by researching that there is a $500 factory to dealer incentive; and a $447 holdback on the MSRP (2%).
Based on the above calculations, the dealer’s real cost is $19,922 (invoice) - $500 (incentive) - $447 (holdback) = $18,957. This is far below the factory invoice number. Now, if you add the 5% for your offer to that price, which will up the car price to $20,379 due to the addition of $455 for the destination charge that is always present, you will see that based on the offer that the dealership offered, you just saved yourself $3410. This may seem complicated but if your use a pre-designed spreadsheet from CarsDirect.com or AutoUSA.com, the program does all the calculation for you.
|
Mia LaCron is the founder of How-To-Buy-A-Car.info - http://www.how-to-buy-a-car.info - devoted to helping individuals buy the right car for them at the absoulute best possible prices. |
Keywords assigned to this article by Avtorentacar: car buying, buying a new car
| Avtorentacar recommended article: How To Escape a Speeding Ticket By Getting Away With A Warning Learn the tips on how to act when stopped by a police officer and what to say to increase your chances of getting away with a warning and not being ticketed. If you want to save yourself from the worries and expenses of dealing with a speeding ticket then after reading this article you'll know what to do when stopped by an officer. If a police patrol car pulls up behind you with lights flashing, the key to the next few minutes is keeping things safe for you and the police officer. Slow down and carefully pull over to the right shoulder, making sure to use your turn signal. |