NEW YORK, NY / ACCESSWIRE / February 23, 2024 / In recent years, due to the COVID-19 pandemic, the automotive industry has witnessed a shift in pricing dynamics impacting car buyers' negotiations. Factors such as supply chain disruptions and increased demand led to limited availability of new vehicles, prompting some customers to pay premiums above the MSRP (manufacturer-suggested retail price) to secure their desired models. However, as the industry gradually adapts post-pandemic, and supply chain challenges are addressed, the landscape is evolving once more. Whether you're currently in the market for a new vehicle or planning a purchase in the future, understanding effective negotiation strategies remains key to securing a favorable deal.
How much can I negotiate off a new car?
Before trying to negotiate a lower price for a new car, it will first be important to understand the difference between the MSRP and the invoice price.
- MSRP: The MSRP is how much the manufacturer suggests the vehicle should be sold for. This number is typically the dealership's "top dollar" or highest price.
- Invoice Price: The invoice price is the amount the dealership pays the manufacturer for the vehicle. Generally speaking, this is the lowest price most dealerships are willing to go down to during a negotiation before they start losing money. Keep in mind that some manufacturers' incentives allow the dealership to still make a profit even if the negotiations got to this point.
How to negotiate an offer
Keep the following strategies in mind when trying to negotiate a better price for a new car.
Do your research
It's very important to look up a vehicle's MSRP and invoice price before visiting the dealership. Your wiggle room will be somewhere between these two values, and the closer you can get to the invoice price, the better. During your conversations with the salesperson, be sure to be as focused on this number as much as possible.
Set a limit for yourself
Anytime you're going to buy anything, it's essential to set a limit for yourself. No matter what direction the negotiation takes, never exceed the maximum amount you're willing to spend. People who overspend on a major purchase such as a vehicle often feel buyer's remorse later and may even run the risk of financial hardship.
Get pre-approved for a loan
Securing financing is a crucial step in the car-buying process, and getting pre-approved for an auto loan can often result in better rates compared to dealership financing. By taking the initiative to find a lender independently, shoppers can potentially secure more favorable terms. Additionally, exploring alternative financing options such as a personal loan to buy a car is another avenue worth considering. Personal loans, often unsecured and without collateral requirements, may offer competitive terms and interest rates that surpass those available through dealership financing. This flexibility allows buyers to explore various financing avenues and choose the option that best suits their financial needs and preferences.
The Bottom Line
Although the dealership will try to get the top dollar they can for a new vehicle, you can still negotiate a better price. Learn the difference between the MSRP and the invoice price and steer the conversation toward the invoice price. Remember to be strategic in your negotiations by doing your homework ahead of time and exploring your options for getting pre-approved (either using an auto loan or a personal loan) before you start shopping.
Source: https://www.forbes.com/advisor/auto-loans/how-to-negotiate-car-prices/
https://www.autotrader.com/car-shopping/buying-car-how-much-do-dealers-mark-car-over-invoice-price-228247
https://www.edmunds.com/car-buying/pricing-basics-for-new-car-buying.html
CONTACT:
Sonakshi Murze
Manager
sonakshi.murze@iquanti.com
SOURCE: OneMain Financial
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