Ah, the dreaded process of having to buy a new car. What should be an exciting experience can quickly turn into a frustrating and expensive disappointment if you’re not careful. Being patient, doing your research and sticking firm to your budget can help you nab a great deal.
Avoid being stung by pushy salesmen and follow the On Road Finance tips for buying a new car.
Do your research
This is the first and most important step to making sure that you are in power, not the salesman. Arriving at a dealership without first researching the car you want to buy is a mistake which will cost you a lot of time and money.
You can find just about anything you want to know about a car on the internet. Redbook, Car Advice and consumer reports are a great place to start but I find the best sites to be the online forums. Reading about the prices, upgrades and locations from other buyers like yourself will give you a better understanding of the deals that are out there. All you need to do is Google the car you are purchasing and the word “forum”. For example, if I was in the market for a new Hyundai i30, I would simple search “Hyundai i30 forum”. The search results will show a number of different forums and communities for Hyundai enthusiasts like you. Here, buyers share their deals with others across the country. When you know what discounts other buyers have received, you know you can receive the same deals.
You should never rush into purchasing a new car. If you know what car you intend to purchase, hop onto the manufacturers website and make note of the retail price (MRDP). Do this on a monthly basis to see how the retail price fluctuates depending on promotions.
Simply waiting a few months and being patient can save you thousands of dollars. Knowing the median retail price is where the next step comes in handy.
Expect 15% off retail
“This man is crazy” is probably what you’re thinking right now, but I assure you, a 15% discount off the recommended retail price is not a crazy expectation.
If the vehicle is advertised at $35000 RRP, the dealer may lean forward and whisper “I’ll look after you and sell it for $32500, but don’t tell anyone”. Oldest trick in the book! Imagine the look on his face when you whisper back “$29750 or I go to another dealer”. 15% off $35000 is $29750. This is your price, take it or leave it. Stick to your guns and be firm with this price. Let the dealer know that you are a serious buyer and are willing to commit if they come to the table.
It may not work the first time but eventually you will get what you want, if the timing is right. This is where the next step becomes important.
Make your offer at the end of the month
Car salesmen wages are paid in two formats. They receive a base minimum salary plus a commission every month depending on how many cars and how many bonuses they sell. They have targets to reach every month and going over these targets provides them higher incentives. Basically, the more cars they sell, the more commissions they are paid.
The last week of the month is crunch time. Salesmen are eager (and sometimes desperate) to sell you a car to meet target, even if this means selling the car at a loss. The sales person will usually know if the offered price (15% off retail) is doable, but must always get the approval from the dealer manager.
A few circumstances will determine whether you’ll receive a yes or no answer. How have sales been this month? Are there any price incentives from the manufacturer? Does the dealer want volume sales for internal stats? Is the car in stock or would it have to be ordered into the country? Is the manager in a good mood or bad mood?
The last week of the month, or better yet, the last few days of the month are the prime time to purchase a new car. If the dealership has had a quiet month and are struggling to meet target, they will sell you the car at your price to make ends meet. If the dealership has had a busy month and are well above target, the manager may agree to your offer simply to make the books look better. The more cars the dealership sells, the better incentives the manufacturer provides that dealership.
If you contact the dealership too early into the month, they may refuse your offer simply because another customer will pay more than you!
Have your finance pre-approved
If you intend to purchase your new car on finance, obtaining the car loan from the dealership may not always be the best option. Franchise dealers and their business managers have access to only a handful of credit providers, and even then, they prefer to usually work with two or three at a time. Not a lot of shopping around for best deals when you only work with two or three lenders.
On Road Finance has accreditation with a panel of over 25 lenders and credit providers. Our relationship with some of the largest brands in asset finance and insurance ensure we provide our customers the cheapest interest rates and fastest possible turn around, while still maintaining the greatest level of service in the industry.
Retrieving an On Road Finance pre-approval before committing to a purchase of a new car is the wise thing to do for a few reasons.
Firstly, with a pre-approval, there is no doubt of being declined. The assessments have been completed and the credit providers are happy to have you on board. Many previous customers have complained to me about applying for finance through the dealership, only to find out that they can’t get approved. They approach me to assist them after the dealership has already taken their deposit and left credit enquiries on the applicants credit file.
Secondly, with a pre-approval, you know your buying power! The lender may approve your application but not the amount you want to purchase. No point shopping around for a $30000 car when you’re only eligible for $20000.
Lastly, you may think you can afford that $30000 car until you find out the repayments are over your budget. Retrieving a pre-approval will be more precise than a quote and will advise you of the exact repayments. This will allow you to shop around for a car that fits the budget.
On Road Finance specialise in arranging asset finance for people from all walks of life. Our vehicle finance and insurance brokers provide dedicated online financial services throughout Australia, direct to customers. With over 7 years of industry experience, the staff at On Road Finance are equipped with the knowledge and professional expertise to assist customers with their finance applications, ensuring a smooth and seamless process. Our relationship with some of the largest brands in asset finance and insurance ensure we provide our customers the cheapest interest rates and fastest possible turn around, while still maintaining the greatest level of service in the industry.
On Road Finance have suitable finance options for consumer and business customers. Apply for a new car loan pre-approval today or feel free to speak to me on 1300 518 580.
In conclusion, buying a new car is a major purchase and it’s important to educate yourself so you can go into negotiations well prepared. Following the On Road Finance tips will ensure you get the best deal possible.