10 rules for dealing with an auto dealer

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Haggling is virtually essential when purchasing a vehicle, or else you’ll pay more than you need to. And then you’ll pay interest on that higher price.

Dealing with a dealer scares a lot of would-be customers, but it shouldn’t. The key is doing your research on the vehicle of your choice before you go to the lot.

When you are dealing with dealers, it’s hard to recall every fact you’ve researched, but keep these key points in the back of your mind.

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10 tips for dealing with an auto dealer

1. Dealers have a profit margin typically between 10 percent and 20 percent. Usually, this is the difference between the sticker price (the price they want you to pay) and the invoice price (the price they paid for the car).

2. If you don’t see exactly what you want on a new car lot, consider ordering it. This may take time, but at least you’ll be paying for what you want and not paying for extras the salesperson talked you into.

3. Now reverse that last idea. If you are sure of what you want and don’t budge, a dealer may offer to let a car go cheaper if it’s “almost” what you want. Have an idea in your mind of what your second choice would be, and if the offer comes you’ll know whether to say yes or no and won’t be confused. Here’s a chance to pay a lot less and get something very close to what you wanted.

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4. Emotions can cost you money. If you let a dealer get you too “high” on a vehicle, reveal you must have a certain vehicle or are excited but not well researched, you’ll almost always pay more.

5. Don’t be too embarrassed to walk out. Many dealer tricks are designed to keep you in the showroom.

6. Consider beginning the process by phone. Getting competitive prices is your first step, but there’s no need to get involved with a salesman just for that. Don’t accept a refusal to talk over the phone. A dealer who demands your presence before offering any numbers is not speaking your language.

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7. Get all the dealers you talk with to use the same figure. Use the factory invoice price as a basis. Then each dealer must give you a number you can compare with other dealer prices. (Every dealer pays the same for the same car — the factory invoice price.)

8. Dealers sometimes get extra factory incentives and may be able to sell below factory invoice price.

9. Negotiate for a price, not a monthly payment. Price first, then payments!

10. Don’t pay for things you don’t have to pay for. Be prepared to pay extra for taxes, registration, licenses and destinations charges. Don’t pay for delivery, promotion, handling, sales charges, floor charges or any other fancy words the dealer is using to have you pay for something you don’t have to pay for. Be prepared to turn down fancy extras like rust proofing and pin striping. They’re expensive and you don’t need them.

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