The Secret to Negotiating a Great Car Deal

There are a lot of things to consider when you're shopping for a car, not the least of which is the price. Other things to consider would include the year, make and model. Do you want a new car or a used car? Will you pay cash or finance? Will you purchase or lease. Should you buy from a dealer or a private party? These are all relevant and important questions, but regardless of the answer to any of these queries, there is a bigger, more important issue to be considered. How will I know that I got the best price? How will I know if I left money on the table? I will try to answer these questions here but in order to get the most complete information you can read "The Insider's Secrets".

There are a number of ways to answer these questions. If you're going to buy a new car, it's a matter of deciding what brand and model best suits your needs. I can't help you much with those decisions but I can help you with figuring out what a fair price should be.

New card dealers of every make are desperate to move inventory; the most affordable will likely be leftover, prior year models. The value to you is threefold;

• First and most obvious is the fact that these vehicles have been sitting on the lot for too long and, in most cases, accruing flooring charges, costs that have eaten away at any potential profits. Any dealer with a supply of these vehicles will be highly motivated to get them off their books and off their lots. Salespeople will know that commissions on these vehicles are likely to be lower than on the fresher inventory and simply quit presenting these vehicles to their customers. The dealer's only defense is to offer large "mini's" on these vehicles. "Mini's" are, higher than average, set commissions that will inspire and motivate sales staff to show these vehicles. Once again, these large minimum commissions are an expense that eats away at the potential profits. The dealer has an even baser need to move these vehicles off the lot; space. The dealer has only so much space for inventory and will need to make room for the incoming, new models. The new models are the ones that occupy all of the manufacturer's advertising budget and provide the consumer rebates and incentives that bring customers onto the lot.

• Secondly; Manufactures want to deliver new inventory to their dealer base and these vehicles are taking up room, not only physically but on flooring lines of credit as well. As an added stimulus for dealers to move these vehicles off the lot, they offer secret rebates. These rebates are referred to as "dealer cash" and in some cases can be thousands of dollars, depending on the cost of the vehicle. The higher the invoice cost, the higher the rebate. In many cases the "dealer cash" will exceed the rebates that were available to consumers. This dealer cash is necessary because most of the consumer rebates and incentives will have long ago expired. If you are aware of these rebates it is very likely that you can negotiate from the invoice rather than the Manufacturer's Suggested Retail Price (MSRP). Once you have the invoice amount you simply deduct every penny of any rebate available, including the dealer cash. There are sources for this information; Edmunds.com and Intellichoice.com occasionally give this information. Automotive News displays all available rebates, both consumer and dealer. You will have to buy a subscription to Automotive News or you can simply go to your public library, usually the main branch, and find it in the resource section.

• Finally; Manufacturer's increase their costs to dealers with each new model year. The MSRP's of the newer models increases as well. A fresh model year vehicle may have no significant changes to the previous year's model, yet you will pay more for essentially the same car. Dealers will try harder to maintain profit margins on the newest, hottest and most popular inventory. Advertised consumer rebates and incentives will make the newer models seem like a better deal. Dealers and local auto dealer associations will focus their advertising campaigns on the newest models as well.

If a used vehicle is your choice, you will be well served to research the market values of whichever make and model you choose.

• KBB.com and Edmunds.com will help you with market values but it is important to remember that these companies primary source of revenue are the auto manufacturers and Dealer's. The information is a good place to start but shouldn't be your entire source of information.

• Magazines like Auto Trader and websites like cars.com and craigslist are filled with ads from private parties and dealers alike and while you won't be able to determine the real market value by looking at the ads themselves, you can call the sellers and ask what they actually got for the listed vehicle. You should be able to ask about the condition and compare mileage and equipment. Make the necessary adjustments with an educated estimate and you should be able to determine what any vehicle you are looking to buy, sell or trade is really worth.

Cash or Finance, Purchase or Lease; whichever way you choose to pay is up to you. You can find reasons for and against each in my book "The Insider's Secrets", but regardless of the answer to any of these questions the SECRET to negotiating a great deal is the same. ALWAYS negotiate as a cash buyer. NEVER reveal that you have a trade until you have the dealer's best price. If you intend to finance or lease, don't tell the dealer, let the dealer think that when it comes time to complete the transaction you will be paying cash (writing a check is the same thing). Dealers will always try to negotiate by your monthly payment and you cannot afford to play that game. The most profit is made on consumers who negotiate based on monthly payment. Once you've got the dealers best price on the vehicle you've decided is the one for you, reveal your payment method. NOT BEFORE. If you are planning to finance, know what your budget is before you ever set foot in the dealership. It is always best to have your financing in place, but that isn't always possible. The truth is that less than 60% of consumers have the credit necessary to get themselves pre-approved. Some of you are going to need the dealers help with financing.

My best advice for anybody considering the purchase or lease of a new or used vehicle and regardless of whether you intend to pay cash or finance is to read my book "The Insider's Secrets". I am a 30 year veteran of the automobile business and I am an expert on every aspect of the vehicle buying and financing process. You can find helpful information and links too many helpful websites as well as ordering information at http://www.theinsiderssecrets.net/.