Advice

Dealing with car dealers

Doing the deal
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Buying a car is quite unlike purchasing anything else. While you might buy other goods from a retailer – whether it be a bricks and mortar shop or online – you buy a car from a car dealer.

The ‘dealer’ part is important, because it implies – accurately – that there is a deal to be done.

Unlike most other products, there are no fixed prices for cars. There is a recommended manufacturer’s retail price (RRP or MRRP) suggested by the manufacturer or importer but that is all it is, a recommendation. The dealer is under no obligation to charge that price, so the price you pay comes down to your negotiating skills.

Before you even visit the dealer, make sure you have done all your homework and research – and CarAdvice is the perfect place to help do this, naturally – and have a very good idea of the precise car you want to buy and if you have a trade in (and have a realistic understanding of what it is worth). Only then is it time to go shopping.

You should aim to visit at least three dealers that sell the car you want to buy. Start with two dealers that are not in the area in which you live. Dealers are often given incentives by the manufacturers to sell cars to people that live in their area and they might be prepared to negotiate a better deal, so leave your local dealer until last. You know what you want, so be confident and if it makes you feel better don’t be afraid to take a friend or partner with you.

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Car prices can be a little confusing to the uninitiated so it’s important to get the dealer to confirm the final price you need to pay. And if you are trading in your old car, that is the changeover price to drive away in your new car.

This is essentially the price of the new car less what the dealer will give you for your trade in plus all on-road costs.

ON-ROAD CHARGES (DRIVEAWAY PRICING)

On road costs include stamp duty, registration – including compulsory third party insurance - and dealer delivery fees.

It is vital that you get the dealer to account for these as part of the final price. Stamp duty and registration are fixed fees but dealer delivery charges can vary anywhere between $1000 and $3000 from dealer to dealer and they are free to charge whatever they like.

This cost is basically what the dealer charges to prepare your new car to drive it away and covers things such as cleaning, fuel, preparing the registration and a final inspection.

BEWARE: UPSELLS

If you have done your research and know what you want, beware of the salesperson trying to upsell you into a higher-spec model that might include features you don’t want or need. In particular, don’t be swayed to buy any of the dealer accessories unless they’re important to you.

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They may try to sell you things such as paint or interior protection, rustproofing or extended warranties and none of these are worth considering. Modern cars have very good quality paintwork, rustproofing and interior finishes that don’t need any extra protection and most come with five-year warranties. Aftermarket extended warranties also often come with very specific conditions and don’t offer any great value.

Exactly how much the dealer is prepared to negotiate on the final price varies according to the particular car you want to buy, whether or not they have it in stock and the time of the month or year.

If it’s a model in high demand, they might be more reluctant to drop the price – and don’t rule out a higher price being asked – but if the model is a slow seller or about to be replaced with a new one, they will be keen to shift the outgoing model.

Similarly, dealers don’t make any money from cars sitting on their lot so if you are happy to drive away with the particular colour and specification they have in stock, rather than having to order your specific car, you might be able to drive a harder bargain.

GOOD TIMES TO BUY

Timing is also important and, on an annual basis, you are more likely to get a better deal at the end of the financial year (June 30) or calendar year (December 31). Dealers like to reduce their stock as much as possible before tax time and, come the new calendar year, they don’t want to be holding last year’s cars.

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In relation to this, it’s also important that you check the build date and compliance plate of the car you are interested in buying. The compliance plate specifies the model year of the car, though if it was built in the previous year, when it comes time to sell, its value will be based on the build year. So although the car might be a 2013 model, if it was built any time in 2012, even the last weeks of December, it will be valued as a 2012 model and may be worth less when it comes time to change it over. This is definitely a factor to take into account when negotiating with the dealer.

Your bargaining power will also vary according to the time of the month. During the final week of the month, staff are often under pressure to meet sales targets and are more willing to reduce prices to get the sale.

Once you have agreed on a final changeover drive away price, get the dealer to give it to you in writing but don’t be pressured into signing. Take the quote and then visit another two dealers to see if you can get a better price.

Doing the deal is not as daunting as it sounds. If you go in armed with plenty of information, a confidence in what you want and how much you are prepared to pay for it, you should be able to negotiate the deal you want. And if you are not happy, be prepared to walk to away as there is always another dealer not too far away.

BEST PRICE – ANONYMOUS DEALING

If the thought of going to a dealer to try and negotiate a deal is too daunting, or too time-consuming, for you, CarAdvice’s sister site Best Price offers a service that allows you to go through the process anonymously until you’re ready to agree a deal.

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Simply select the model you want to buy and Best Price will distribute your request to your five nearest dealers. Via Best Price you will then be provided with quotes from dealers on that model – which will typically come in the form of a discounted price on the RRP or a package that throws in extra features for no extra cost. (So the best offer may not actually be the lowest price.)

Only when you’re satisfied with a quote will you be connected with the respective dealer to complete the negotiation.