Whether you buy a car from a dealership, Carmax, or Facebook marketplace, buying a car can be a confusing, frustrating, and downright irritating experience. But behind the haggling, the anxiety, and the dramatic theater of the salesman “going to talk to the manager,” what are the top 5 tips before embarking on this adventure to buy a new car? 

The Right Time to Buy a New Car

Some experts say the best times of the year to buy a car are during the last two weeks of December and, to a lesser extent, between July and October.

Car lots are often deserted during the winter holiday season, which motivates dealers to cut costs, making it a great time to buy a new car. Also, it’s the end of the year, and they’re trying to break sales records. But from July through October, dealers clear lots to make way for the following year’s models, which means they will be ready to make a deal and may be willing to give up all or part of any incentives to make a sale.

Most dealerships chart sales every month, and sales managers will build campaigns around monthly sales quotas. Bonuses are set up for the salespeople who meet or exceed quotas, so shop at the end of the month and hope for a hungry salesperson.

Don’t feel rushed. The salesperson will want to close the deal with you and move on to the next prospective buyer but make a counteroffer. Once you have the lowest figure, ask for it in writing and say you need a couple of days to think it over. This might prompt the salesperson to go even lower on the price to make a faster sale. Have you ever been stuck at a dealership for hours and hated every minute of it? Well, so have the salespeople. Be patient and firm when negotiating to buy a car.

Get a Good Deal?

For most of us, negotiations can be the biggest headache. Don’t bother dangling that “all cash” offer to a salesman. He doesn’t care. They make less money on cash deals. They make more on financing and get the money from the bank within the same time frame.

But no matter what the deal looks like, the hardcore hagglers get the best prices. 

There are definitely those “grinders” who go into the dealerships and keep those salesmen in the process, chiseling the price of the car down and asking them to throw in all kinds of perks on top of it. These buyers are successful. But I’ve seen some customers win by being the nice guy. They let you know how much they can afford, and the salesman actually wants to work with them in buying a car.

Learn to Compromise

Even if the dealer has the model you want, the car might not have some of the features you were looking for (and may have more than you want or need). Decide which options are essential and whether you should consider a different car without having all of them. This is essential when choosing whether to buy a new car.

New or Used

According to the National Automobile Dealers Association, the average person owns 13 vehicles during a lifetime, with each averaging about $30,000. If you purchased each of these vehicles and they were three years old, during your lifetime, you could save almost $130,000 instead of purchasing new ones.

Used. In addition to saving on financial costs by letting someone else take the depreciation hit on the vehicle, there are other advantages to buying a used car when considering to buy a new car. You can often find a late-model used car priced at half the cost of a new one. Pre-certified dealer programs feature strong warranties as well.

The biggest downside of buying a used car is that it might need to be more reliable or that you need to do more repairs on it, and there is no warranty. You don’t know how the owner treated the car or why they traded it in.

New. All new vehicles are considered perfect, so you don’t need to evaluate the condition. It’s also easier to determine how much the vehicle costs, even if you still need to negotiate. You will have more financing options and advanced technology in a new model when you buy a new car. 

The biggest downside to a new vehicle is that you lose money the minute you drive it off the lot. Yeah, that rule still applies, and the biggest depreciation happens in the first three years. Of course, higher insurance costs are involved since the replacement values are higher. 

The Dealership

Everyone thinks the salespeople are always pulling a fast one on them. People in other sales jobs are especially suspicious. When real estate brokers come in to buy cars, they may assume the salesperson makes the same percentage they do on every deal. But it’s not true. From the mouths of babes, some salesmen have reported deals where I earned $100 on a car after negotiating with a customer for 4 hours. Buyers won’t accept that on many deals, margins are slim for the salespeople. Used cars are where the money is made. A salesperson can earn more on a used car with 95,000 miles than on many brand-new ones.

“Let me go talk to the manager to see what I can do.” They call this “desking it,” where they take the customer’s offer to the manager’s desk. Approximately 90 percent of the sales force at every dealership has to do this. It’s the manager’s job to help structure the deals to earn the most profit for the dealership or to move stagnant inventory quickly. There’s a psychology behind the dealer’s desking practice. 

The Car Lot Salesguy

You see, salespeople are very hungry. If they knew the bare-bones, bottom-line price that the manager could sell a car for and still make a commission, they would expedite the sale and say to the customer, “Okay, I know your budget is $35,000. Well, my bottom line is $32,000, so I’ll just sell it to you for that, and everyone will be happy.” That situation would be awful for the profitability of the dealership when they are trying to sell you a new car.

Often, salespeople can get enticed by bonuses tied to the number of cars sold. Some salesmen would be offered a $4000 bonus for reaching a goal of 20 cars for a month. Well, if I’m at car 19 and within $500 of closing my 20th deal, he’d be willing to eat that $500 himself, sell the customer his car, and get that juicy bonus. So that’s why they have to talk to the manager every time, especially when you want to buy a new car.

The bottom line is that buying a car is one of the top five biggest financial decisions you will make in your lifetime, along with homes, Cars, Weddings, and Vacations. Sadly, none of these are forever in this day and age, so take your time, don’t get upset with the process, lean into it, and learn from it. And don’t worry… it’s not forever. 

“As soon as I saw my first car, I knew it had a big future.” Karl Benz