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How to Get the Best Price on a New Car

Buying a vehicle can be one of your biggest financial decisions. There are a ton of options, prices, payment methods and ways to finance your new ride. And when it comes to negotiating what you’ll pay, that part of the process can feel as painful as a root canal. It doesn’t have to be, though.

When you have the right information and go into negotiations with confidence, you can drive away in the car of your dreams knowing you got a great deal. Follow these buying-new-car tips and you’ll be an expert in how to negotiate car price.

How do I get the biggest discount on a new car?

Research! That lets you find the exact vehicle you want, know how much you should pay and set up financing before you even leave your house.

  • Find the right car to meet your needs, budget and lifestyle. In addition to make, model, color, features and purchase price, be sure to consider fuel, maintenance and insurance costs. Car finder sites like Autotrader, Edmunds and Kelley Blue Book , and your insurance company, can be good places to start.
  • Figure out an appropriate price range for the car you’re interested in. You’ll likely come across these terms:
    • Invoice Price − What a dealership paid the manufacturer for a vehicle.
    • Manufacturer’s Suggested Retail Price (MSRP) − What the manufacturer thinks the dealership should sell the car for.
    • Fair Market Value − An estimate of what you should expect to pay based on the make, model, features and recent area sales of similar vehicles.
    • Pricing tools from Edmunds and Kelley Blue Book show the invoice price and MSRP, along with the fair market value for new and used cars.
  • Read reviews of the models you’re interested in. Kelley Blue Book , Consumer Reports and other research companies collect maintenance information on vehicles and can show you the full cost of ownership.

Here’s more research you should do to get the best price on a new car:

  • Read assessments of dealerships in your area from recent customers. You might pick up valuable information about their sales tactics and negotiating styles.
  • If you’re trading in your current car, decide what you’re willing to accept. Check the National Automobile Dealers Association website to get an idea of a fair price. Also look at live prices online and at local dealerships.
  • If you finance your new car, check with banks, credit unions and online lenders first to find the best rates. Car loans from dealers often have higher interest rates, and may contain extra charges. You can use a preapproved car loan as a bargaining tool when you negotiate with the dealership. Applying for preapproval is fairly easy.
  • Determine whether you need gap (or credit) insurance, which covers the difference between the amount you owe on your auto loan and what your insurance pays if your vehicle is stolen, damaged or totaled. You can usually buy this coverage from the auto dealer or directly from your insurance company.

When is the best time to buy a car?

The busiest times at most car dealerships are on weekends. Also, they typically have monthly, quarterly and annual sales goals. Look for deals during these events when salespeople are trying to meet them.

You can often find more savings during these time periods:

  • Holidays − While dealerships may offer special rebates, cash back or financing deals at any time of the year, they’re often available on major holidays like New Year’s, Memorial Day, Labor Day or Christmas.
  • End of a model year − You might get a better price on last year’s model if you wait for the new model year to come out.

How to negotiate car price

You’ve done your homework, become an expert on the car you want and are ready to shop. When buying a new car, tips like these can help you seal the deal.

  • Know the total price, including costs like sales tax and registration, title and dealer fees that aren’t included in the MSRP. Focus on this number to avoid going over your budget.
  • Get quotes from several dealers. Starting with the lowest price, ask other dealers if they’re willing to beat it. You might be able to drive the purchase price down even more with counteroffers. If you don’t have time to do this in person, check with the dealer’s internet sales department to get the no-nonsense price instantly. Use the phone numbers, email addresses or contact forms you’ll find on every dealer’s website. You can also go to the manufacturer’s website, choose the specifications, color, etc. for the vehicle you want, and then request quotes from all of the dealers in your area.
  • Focus on the price, not the payment. To save money in the long run, push for a lower purchase price, not a lower monthly payment.
  • Stay away from things like an extended warranty, tire protection plans, antitheft protection, infotainment upgrades and VIN etching. You can always buy these add-ons later if you really want them.
  • If you’re able to, consider paying cash. It sends a message that you mean business, and can give you the upper hand in the deal. You’ll also end up paying less.
  • Be prepared to walk away if you’re not getting the deal you want. Don’t let a salesperson pressure you into buying at a price you’re not comfortable paying. You may be able to find a better deal elsewhere.

Can you negotiate used car prices at a dealership?

If you’re shopping for a used car, you want to make an offer that’s as low as possible but still in the ballpark. Use the estimated trade-in value as a guidepost for what the dealership might have paid, and compare that to its estimated dealer retail value. The goal is to land between those numbers. You can also look for comparable used vehicles near you to see what others are listing. Know ahead of time what your opening offer will be, how you’ll counter the dealer's offer, and what your highest price will be.

What should you not say to a car salesperson?

One of the most important elements in how to get the best price on a new car is being careful about the information you give a salesperson. Offer only what they need to complete the transaction, and only when they need it. Most definitely avoid talking about money − price, trade-in, payment − until you’re ready to buy. If you’re a first-time car buyer, it’s also a good idea to stay quiet about that. You don’t want the salesperson to steer you to the wrong vehicle.

Congratulations! You’ve found the car of your dreams and negotiated a great deal. Amica representatives are standing by to help you with the right insurance protection for your new ride.

Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.

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