Published: 13 February 2009 Topic: News,Motoring,New Cars
The recession is taking its toll on the car market. Latest figures revealed the number of new cars registered in January was 31% lower than in January last year and Nissan has announced 20,000 job cuts worldwide with its chief executive having described the global auto industry as being 'in turmoil'.
As far as motorists are concerned, this cloud has a silver lining because if you are looking to buy a car - whether brand new or second hand - there are some great deals to be had.
Here are our top 10 tips on how to negotiate the best deal:
Tip one: Do your homework
Once you've decided which car you want to buy, do some research online so that when you go into the dealership or speak to the vendor you are in a strong position to haggle. Look to see if there are any similar vehicles for sale elsewhere and see how the prices compare. Even if you are buying a brand new car, the dealer will have room for manoeuvre on the price.
Tip two: Decide how much you want to pay
Remember there is always room for negotiation when it comes to car prices, especially in the current climate, so decide how much you are prepared to pay for the vehicle (but be realistic) and stick to your guns. Be prepared to walk away though if this price isn't agreed - with a bit of luck you'll get a phone call from the seller or dealer agreeing to your terms.
Tip three: Use the internet to your advantage
As with many consumer goods, you can often find the best deals on new and used cars by shopping online. With fewer overheads and no commission to pay to salesmen, there can be extensive reductions in price if you pick up a car through an online dealer. However, even if you don't buy outright on the internet, print off some quotes and take them into a local dealership with you - you could even ask a dealer to match the internet price. This is even more effective for used cars - if sellers think you are looking at other options they will be more willing to negotiate.
Tip four: Try and uncover the invoice price
The invoice price is the amount the dealer paid to the manufacturer for the vehicle and it should be your target to get as close to this as possible - the dealer will obviously expect to make some profit. Some car buying websites will list their invoice price so if you can point this out to a dealer you stand a better chance of lowering the retail price. Similarly, look for information on manufacturer rebates as some companies offer cash incentives to dealers to promote certain vehicles.
Tip five: Buy at the right time
If you're not too worried about having a 2009 registration plate, then try and time your purchase well. Many dealerships look to shift excess stock ahead of the introduction of new registration plates in March and September so now could be a great time to pick up a bargain. If you're not quite ready to make a purchase, then consider holding off until August as the
Tip six: Let them know you're serious
Dealers will work a lot harder if they think they're going to get a deal so let them know you're there to buy a car if the deal is right. However, don't come across as desperate to buy as this could reduce your chances of picking up a bargain - play it cool.
Tip seven: Take a test-drive with a knowledgeable friend
Just as you wouldn't buy a pair of shoes without trying them on first, you shouldn't buy a new car without taking it for a spin. If you're buying a used car it's definitely worth taking someone along with you who knows a thing or two about cars and can point out any unusual sounds or movements. Even if the problems are nothing to be concerned about it could help you when haggling for a better deal. It's also worth checking the vehicle has a clean history - vehicle checks are available online for as little as £3.95.
Tip eight: Get the most for your current vehicle
If you have a car to sell, work to get the best price for it. Trading it in as a part exchange on your new vehicle is the easiest option, but make sure the sales adviser contacts a number of dealers for bids on it so you get the best deal possible. However, if you sell it privately, you'll probably get even more for it.
Tip nine: Shop around for car finance
When talking at a dealership you should only negotiate on the sales price - don't be lured in by attractive finance offers. Dealers often bamboozle prospective buyers with figures and they know how to make a car deal sound tantalizingly good, but don't just focus on the monthly repayments. Find out how much the finance package will cost over the term of the deal. And how flexible is it? For example, what happens if you want to get rid of the car before the end on the term.
Once you are armed with all the answers, compare the cost of the dealer's finance package with that of a standard personal loan. Use our car loans comparison tool to see what you could get from a traditional provider.
Tip 10: Shop around for extras
Many dealers throw in incentives such as car insurance and breakdown cover. On occasions their deals for these products can be attractive - several dealers even offer a year's free car insurance with some purchases. However, you should check that the cover is adequate and ask to see examples of repayment plans without these extras. You could potentially save a significant sum of money if you shop for car insurance and breakdown cover independently.
Finally, if you need some more tips or recommendations check out our motoring forum and see if our users can help.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.