Car Buying Guide - XII

During the car buying process it is very easy for the waters to get muddied up and confusing for you. During any negotiating process you don't want this to be the case... it will cost you money.

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Previously in our car buying guide we talked about the necessity to keep the three basic areas of the car buying process (new car, trade, financing) separate. Although difficult, you must do this in order to negotiate your best car deal.

Let's start with the new car you are looking at.

First and foremost in your new car negotiations you will negotiate from the invoice price up! Never, never, ever, negotiate from the sticker price down.

Just don't!

Focus on the selling price of the new car. Oh, by the way, I am writing under the assumption that you have been a good student to this point and haven't even started this process without knowing exactly what the numbers are, both on the new and the trade in side of the ledger.

Focus on the selling price of the car you are looking at.

Don't worry about the trade at this point. Even if the used car manager is out evaluating your trade as you speak with the salesman. Remember, you already know what a fair price is for your trade in.

Once you make an offer of price for their new car do not allow such tactics as the salesperson telling you something like "I can't get you that price on this car, but I am pretty sure I can on that (other) car". Well, that car isn't the one you have researched and want. Do not let them switch cars on you. This would be a big mistake.

Stay calm, know your numbers. Don't let the sales person walk you around the lot looking at other possibilities that will fit your numbers.

Don't be ridiculous with your numbers you present. Be realistic. Sure it may take some work to get them, but don't take yourself out of the game by offering up something so ridiculously low that you aren't even taken as a serious car buyer.

You have to get their attention as a serious buyer... a sale for them is definitely possible if the numbers come together to your satisfaction.

Ultimately, the best advice I could give you on this process is that after you have done your homework on both your trade in and the new car and you have a target price for both; you will now have a number known as the trade difference. In other words, the price you are willing to pay for the new, minus the value you want for your trade is the "trade difference".

This number in your mind is extremely important in keeping your rudder straight.

Because, no matter what set of numbers the car salesman tosses at you between the new car and your trade, you know the trade difference number is your goal.

For example let's say you know that if you can get a trade difference of say $15,000 you will be satisfied with the car deal. This means that you will have met your goal getting the prices you want for the new car and your used car you traded. It also means that you have satisfied your budgetary constraints as well.

If you persist, in getting your trade difference goal you may end up a bit higher on the new car price, but also get a higher value on your trade than you thought. Or even vise versa.

For example, if the sales person comes back and asks you... "if I can get you this much more for your trade, can we earn your business?" Again, take this dollar value and subtract it from the new car price they have penciled in and then does this meet your trade difference goal?

If not, and you feel that there is still some money left on the new car, but you know they are indeed at a good price on your trade, then encourage the sales person to redirect back at the selling price of the new car and go after that last few hundred dollars that you know is fair.

I know that this is a lot to talk about. I have talked about hours if not days of work on your part. But if you want to negotiate your best car deal this is what you must be prepared to do.

Remember stay calm, cool, and collected during all parts of negotiating car prices. And most of all, know a fair price for the selling price of the new car and a fair price for your trade, so you will then know the trade difference number. Then it will be up to the car salesman, the car dealer and you to get to that number.

Be sure to stop by and check out the details of the whole car buying process and my complete car buying guide.