Dear Terry, If I know I'm going to pay cash for a car, should I let the dealer know that -- or should I pretend I'm interested in his financing package as leverage to try to get a lower sales price or higher trade-in value? -- KathyDear Kathy, While subterfuge may seem like the best defense in the car-buying process, it doesn't have to be that cloak-and-dagger. The car-buying process should be thought of as three distinct negotiations:First, determine the price of the vehicle and deflect any attempts to discuss trade-in or financing. When that price is determined, then bring up any vehicle you may want to trade. Know the wholesale value of your trade beforehand. Lastly, bring up the issue of whether you're going to finance or lease the vehicle.By treating all three processes separately, you're less likely to wind up paying more overall than you should.Here are this week's reader questions:Secrecy at heart of car-sales animosityShould I withhold my payment preference when negotiating price?Isn't an extended warranty good -- at least -- for peace of mind?Do dealers have something known as a secret warranty? advertisementRelated Links:7 best off-to-college carsNational auto loan averagesWhat changes auto loan rates?Related Articles:All new cars for 20105 steps to 'clunker' dealTake the 'cash back?'
Dear Terry, If I know I'm going to pay cash for a car, should I let the dealer know that -- or should I pretend I'm interested in his financing package as leverage to try to get a lower sales price or higher trade-in value? -- Kathy
Dear Kathy, While subterfuge may seem like the best defense in the car-buying process, it doesn't have to be that cloak-and-dagger. The car-buying process should be thought of as three distinct negotiations:
First, determine the price of the vehicle and deflect any attempts to discuss trade-in or financing. When that price is determined, then bring up any vehicle you may want to trade. Know the wholesale value of your trade beforehand. Lastly, bring up the issue of whether you're going to finance or lease the vehicle.
By treating all three processes separately, you're less likely to wind up paying more overall than you should.