Car Buying. The Art of Negotiation.
One of the hardest parts of buying a car is negotiation. Dealers are reluctant to adjust MSRP while car buyers are overly optimistic as to what they think they can purchase the car for. It is a dance that has gone on for decades. While both sides have opinions, negotiation relies on both sides working together to find a solution.
What is MSRP
When it comes to MSRP (Manufacturer’s Suggested Retail Price), for a majority of sales reps, this is their bottom line. What most buyers don’t understand is that auto reps typically have little wiggle room when it comes to MSRP. Aside from the list price of the car, there are several business factors that the dealership is accountable for, and buyers really don’t understand the intricacies of owning a dealership. Walking on to a lot and expecting thousands of dollars off MSRP, unfortunately may not be up to the sales rep.
“Let me talk to my manager,” often results in, “I can’t do it, sorry.
Financing vs. MSRP
While auto reps may not be able to negotiate on MSRP, they can negotiate on financing. Depending upon the financial institution and the duration of the loan, many reps have stated that this is where they have some wiggle room. Topics like trade-in’s and extended warranty can all be used as leverage when negotiating with an auto sales rep. The trick is transparency.
Many dealerships are still using old business tactics, and sales management has changed little when it comes to sales tactics. Also, the proliferation of the internet has educated consumers even further, putting more power into the hands of the buyer. The old adage still holds true:
Never be afraid to walk out.
It is not advantageous for automotive sales reps to “walk you off the lot.” If you expect that you are being taken advantage of or cannot come up with a mutual negotiation, always be ready to leave.
Private Auto Brokers.
Unlike dealers, automotive Brokers on the other hand, have a mutual interest in advancing the best rate and the best car. Because brokers work independently from dealerships and financial institutions, they make money on trust and referrals. More than commission, they are interested in referral business. This makes them reliable because their business is dependent on good customer service.
And because an auto dealer has independent skin in the game, it’s easy to discuss with them, rather than argue. Consultative selling should be the goal and if you witness an auto dealer giving you sound advice and providing multiple financing and buying options, chances are you have a winner.
Lastly, they do the leg work. They find the car and find the financing options for you and your family. They can ]find multiple offers and present you with multiple options from multiple manufacturers.
In Conclusion.
Find an auto broker that will put your interests first and you and the savings will follow.
