New research has found that over 1.6 million motorists have made a common error when applying for their car finance. The data from Confused.com found that this amount of motorists have agreed to a finance deal without negotiating. Buying a car on finance is difficult and stressful and is often a high-pressure environment for the motorist who can feel obliged to accept. The research found that a quarter of respondents didn’t feel confident about challenging or questioning the dealer.
One of the reasons for this was by becoming overwhelmed by the technical jargon used by the dealer.
As a result, a professional negotiator has provided tips for motorists to help them get the best deal when they are at a dealership.
Tips by Steve Jones from Focal Point Negotiating on behalf of Confused.com
1. Planning is key: You’re less likely to get a bad deal if you know what you should be paying. Do your research upfront and get a ballpark estimate for the market rate – this can easily be done online before you visit the dealer.
Research different options, quotes and terminology beforehand to get your head around the different options and find the best deal for you. Remember that some dealers will be looking to make their money on a car finance contract, rather than the price of the vehicle, so know what you should be paying for both.
In fact, a previous experiment by Confused.com shows that on average, you’ll pay £1860 more using a car finance option via the dealer than if you search for options online beforehand.
2. How low can you go? Once you know what the market rate is, set yourself a realistic budget of what you’d like to pay.
When negotiating, always start by asking for a figure lower than what you’d like to pay, then slowly increase your price and have the price you would like as your ‘final offer’. From there, stick to your guns.
3. Know your alternatives: Your power is driven by the quality of your alternatives. Make sure you check a number of providers before you start to negotiate and if you can avoid it, don’t get stuck on one particular model or brand.
When you narrow your choices down to too much detail, the negotiation becomes more about ‘that specific car’ rather than the best deal which gives the dealer the upper hand.
4. Timing is everything: Don’t get disheartened if someone says no to your offer, as this is inevitable in some cases.
It can often come down to things like whether or not the dealer has hit their sales targets for that month (they’re less likely to discount if so, because the market is strong). Use a ‘no’ to your advantage and go back to the drawing table to try and find a compromise.
It’s worth considering visiting the dealer again at the end of the day, as they might be more inclined to close a sale right before they close.
5. Think outside the box: Dealer not moving on their price? Rather than trying to get them to decrease the price, why not ask them to add more in instead?
Try and have a think of things you might need and see if they can throw them in. This could be extended servicing, child car seats or free insurance for example – feel free to get creative!
6. Question everything: Details are key. Check everything like mileage, tyres, paintwork are in order and don’t be afraid to use them as bargaining chips if they aren’t up to scratch. Better still, bring a friend for a second pair of eyes.
7. Don’t play hardball: It’s easy to go straight into bad cop mode when you’re preparing to negotiate, however this isn’t always the best approach. Remember that a successful negotiation is not about a win – lose scenario but a win – win. Ultimately, a better deal for you is a smaller bonus for the dealer so focus on meeting them halfway.
Understanding the pressure from the dealer’s side, empathising with them and maintaining friendly throughout the process will ultimately help you score more points.
8. Use your poker face: If you aren’t confident at negotiating, the worst thing you can do is show it. Don’t let on if you’re baffled by terminology or it will give the seller the upper hand – just remain calm, stay confident and when in doubt, stay silent. More importantly, take your time to properly think things through before you commit to anything.