Shopping for cars online allows you to save time and save money. In the past, to get the best deal on a car involved going from dealership to dealership and haggling for hours over a few thousand dollars. Buyers often get taken simply because they don’t know how to negotiate.
The process is emotionally draining and very taxing. Even if you get a good deal, chances are you would have still left some money on the table simply because you didn’t know what the rock bottom price you could have gotten was.
Today, online car shopping has changed all that.
Why Online Car Shopping is the Way to Go
Perhaps the biggest change in the auto industry in the last two decades is the publication of invoice prices on the internet. Before, consumers had to do a lot of research to find the invoice price. They had to find a book like Consumer Magazine or research it in a trade journal.
Now, all they have to do is go to Google.
With the internet, everyone can find out the invoice price of a car in seconds. The invoice price is what the dealership pays for the car (not including kickbacks.) This puts consumers on even footing with dealers and forces dealerships to price themselves more fairly.
Invoice Up v.s. MSRP Down
When you walk into a dealership and start negotiating on a car, you negotiate from the MSRP down. You start with the sticker price and try to get the dealer to go as low as possible. Unfortunately, by starting from the MSRP, you’re already putting yourself in a disadvantaged position.
You’ll never get as good a price as possible starting from the MSRP. However, when you do your shopping online, you buy from the invoice up instead.
You know what the invoice is. It’s clearly disclosed. You then buy based on how much you’re paying over invoice. Typically you can expect to pay between $100 and $800 over invoice.
What to Look for Before You Go to the Dealership
There are a few things you should look for before you step foot on the dealership.
First and foremost is price. You want to make sure you have a solid price locked in before you go to the dealer. Don’t just look at the price on the website. Get in touch with someone in the dealership and confirm the internet price before you go.
It often makes sense to get quotes from several different dealerships. That way, you can go to the dealership closest to you and ask if they can match or beat a price. This allows you to create a mini-auction between dealerships so they’re all bidding to give you the lowest price possible.
You also want to make sure they have the actual color you want in stock. Beware if the dealership says “we can get whatever color you want.” Generally salespeople will try to force you into buying whatever they have in stock.
It’s true that a car dealer can indeed order a car in whatever color you want; however it may cost you a bit more money as they have to move the car from one dealership to another. You also won’t be able to drive off the lot that same day. In short, try to find a dealership that has your exact car in stock before you go.
Know Your Trade-In Value
One of the biggest ways dealers make money is by discounting a consumer’s car. Before you step on the lot, research what your car should be worth. Know your Kelly Blue Book value.
If you have any imperfections your value will go down. So it’s best to understand how trade-in’s work.
Buying a car online is both less stressful and less expensive than buying a car in person. Use online resources to create competition between dealerships and get the best deal possible. Lock in the price before you go to the dealership and you’ll be in and out in less than 2 hours – Instead of having to spend all day haggling over price.