How to Buy a Cheap New Car (Tip 6 of 10)


Almost every aspect of buying a new car is negotiable – except the statutory charges. Most people hate negotiating, and they especially hate negotiating over money, and extra-especially they hate negotiating over a big-ticket item like a new car. Many – most – new car dealers understand this disinclination to bargain hard, and exploit it to their advantage.

Here are a few strategies:

First, don’t get bogged down in the technicalities. Find out the ‘drive-away’ price of the new car in question. Confirm that it’s in stock at the new car dealer now. Pitch your initial offer at least 15 per cent below the drive-away price. For example: if the dealer says $40,000 drive-away, offer $34,000. Remember, you can always come up $1000 or $2000 – if you want to.

Say words to the effect of: “OK – I like this car, but I don’t want to spend $40,000. I can afford to pay you $34,000 today if you like.” (You need to have your finances sorted to say this.)

If they respond with: “We can’t let it go for less than $38,000,” what you need to do is fob the responsibility to negotiate off on someone else on your team. Me? I’d say: “Mate, my wife [husband/girlfriend/fiancé/parents] will kill me if I blow the budget by that much. I can probably get away with spending $35,000 right now. Anything more and I’ll have to go home and see what they say.”

At this point the dealer is under considerable pressure – a sale that they can make right now to help them achieve their target and cut their interest bill is looking like walking out the door. This is where you get to see how motivated they are to achieve that sale. If the answer is ‘very’ then there’s no way they want you to walk. They’ll either put you under pressure to spend more right now. (Advice there: stick to your guns.) Alternatively, they’ll capitulate and you’ll get the car for $35k (a 12.5 per cent discount in this hypothetical example).

While negotiating, tell them you’ll probably get the car serviced at the dealership, because the dealer will mentally factor in how much they might make out of your servicing business over the next few years.

Another favourite way for dealers to gouge you is in accessories – like paint protection, rust-proofing and over-priced window tinting. Say ‘no’ to them all – they’re either useless or priced way too high. (But they are quite profitable for the dealer.)

If you really, really hate negotiating down the price, you can always use a car brokerage. Car brokers put your sale out to tender across a network of dealers – and the lowest priced tender from among the dealers contacted wins the sale. Best news? The car gets delivered to your door with a full tank of fuel. They can also assist you in the sale of your old car. Fill in my contact form and I'll put you in touch with one.