Make sure you give the agent the exact model, including engine type and other specifications, to get an accurate quote.
5. Nail down financing before you visit the dealer
Don't let your eagerness to test-drive a car send you to the dealership just yet.
Dealers don't just want to sell you a car; they want to give you the car loan because they typically receive a flat fee or a commission on the car loans they facilitate. They get that kickback regardless of whether the loan is from the manufacturer or a local lender.
As a result, dealers sometimes promise a great interest rate before they have final approval, which can get you in a pickle if you sign a contract.
Instead, secure financing from a bank or credit union in advance and then compare it with what the dealer offers. Use Bankrate's rate search tool to see current interest rates. Check with local lenders, including credit unions, which offer loans that are 1% to 2% lower on average than conventional banks. Many community credit unions are open to anyone living in their area, eliminating the need to work at a certain company or in a specific industry to join. Use CULookup.com to find a credit union you can join.
6. Automaker's promotion may not be the best interest rate
You probably have seen the ads from automakers for 0% interest rates or low interest rates and have decided the car was within your budget because of the low monthly payment quoted, but the likelihood is you won't qualify.
Only about 10% of car buyers qualify for the 0% or low interest rate deals. Even if you do, you may be better off taking the cash rebate and getting your financing at a bank or credit union.
Once you've found the best interest rate, use the car rebate vs. low-interest calculator to determine which is the better deal.
7. Know the invoice price
While invoice pricing on auto research websites isn't completely accurate, it's a good indicator of what the dealer paid for the car. You'll want to keep this number in mind as you negotiate the purchase of your next car.
If your research didn't include the invoice price for new cars or the wholesale price for used cars, go back to the auto research website you visited earlier to check it.
You'll want to aim for a sale price that is close to that number before any applicable discounts. Keep in mind that running a dealership is a costly endeavor with a lot of overhead. The dealer needs to make at least a few hundred dollars of profit to cover costs.
8. Find all possible discounts in advance
While automakers usually promote cash-back rebates that apply to all buyers, small rebates that apply to specific groups may be available but not widely publicized.
Many automakers offer additional rebates for students, current and former military personnel, and even certain membership-based groups.
These discounts can be combined with each other as well as with the cash-back rebates. Check the automaker's website for these incentives in their "current offers" section.
9. Don't rush the test drive
Now that you've done all your research, you are ready to visit the dealership for a test-drive. Call in advance to make an appointment for a test-drive with the Internet or fleet manager.
If you decide you are ready to buy after the test drive, you already will be working with someone who is less likely to strong-arm you into a deal.
Since you are likely going to keep your car for 5 years or more, don't hesitate to ask for more time behind the wheel to ensure you like the driving experience.
Also, take extra time with the car parked to adjust the seats and experiment with the controls and make sure all of your typical passengers are comfortable and any regular cargo fits well.
10. Use smart negotiating strategies
When you are ready to buy, be sure to keep in mind all the discounts you researched.
It's easier to get the best price for each if you negotiate the sale price of your new car and the trade-in value of your old car separately, so don't factor in trading in your car as part of the deal for the moment.
Make sure you do your research about your current car's value online in advance so you know whether you are being offered a fair price.
Go over the list of fees associated with the deal to ensure they are accurate, and make sure you aren't paying any unnecessary dealer fees.
Once you've agreed to the price with the dealer, be prepared to say "no" to all the extras you may be offered. You can always buy them separately later, after you've researched pricing.