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Buying a new car is an exciting time - until you realise you have to negotiate with a car dealer.
Whether it’s a Toyota or a Porsche, the best thing you can do before setting foot in a dealership is to be prepared. This includes researching your desired car model, taking time out of your day to visit a few dealerships, talking to a trusted family member or friend, and also taking time to assess your finances. Keep in mind that you likely won’t take just one trip to the dealer. Inspecting, test driving, and paying for a new car often involves at least two or three trips.
Even before you step into the dealership, research is key. This includes the car you want, plus the trade-in value of your current car. There are numerous resources online to see what particular car makes and models sell for both as a recommended retail price, and what dealers are actually selling them for. Part and parcel of the dealership experience is the negotiation step, where both you and the dealer haggle to meet at an agreeable price. Note any optional extras you could pay for, such as window tinting, floor mats, paint protection and more. These may be bargaining chips you could use when negotiating.
Once you’ve done a little research, it’s time to start test driving some cars. Many towns and cities have a ‘magic mile’ where there are multiple dealerships next to each other. If you’re not yet set on any one make or model, it can be useful to pick a few and test drive them all. Some small town dealerships may also combine makes into the one lot, selling Nissans and Toyotas side by side, for example. Aside from the stats on paper such as power, features and fuel consumption, note differences in cars that matter day to day. Driver comfort, visibility, boot space, ease of parking, the turning circle and more could all contribute to driver satisfaction. Remember to bring your licence and be prepared to sign an insurance waiver before test driving.
When you arrange a test drive, it could be a good idea to bring another person along with you. Walking into a dealership can be an intimidating experience, especially as a first-timer or if you feel like you don’t know much about cars. This is where mum, dad, partner or mate can step in and provide their valuable two cents. You may get caught up with talking about mud flaps with the dealer, while your friend points out that the boot isn’t big enough for Maxine, your Great Dane puppy. Or they could be researching online, where they discover the same car at another dealership is being offered for $3,000 less. Either way, a third party can ease your nerves and give you confidence.
You’ll need to decide how you’re going to pay for the car, and how you can afford it. You’ll also need to decide just how much you can afford to repay every week or fortnight if you decide on a car loan. If you’re trading in a vehicle, it could be wise to secure an offer from the dealership and weigh it up against selling the vehicle privately, or working how much you could negotiate off the price of the new car.
Remember, the dealer wants their margin in there somewhere - whether that’s via the new car’s price, a lower price on the car you’re trading in, selling extras to you such as paint protection, or via their finance options.
Weighing up your budget could mean the difference between getting a base model, or a premium model, or choosing another model altogether. The car’s price is just one aspect of car ownership - you’ll need to look into various ongoing expenses such as insurance, registration, maintenance, tyres and more.
Not sure about only buying from a car dealership? Read our guide on private sellers vs car dealerships.
If you don’t have cash, you’ll most likely need to finance the vehicle, either via an unsecured or secured loan.
At loans.com.au, we offer secured car loans, which attract a lower interest rate, and the car is used as collateral.
Once you’ve figured out a budget and how much your car costs, consider getting car loan pre-approval. This allows you to secure a low rate for a certain amount, and walk into the dealer prepared. A pre-approval gives you peace of mind when it comes time to pay, without the dealership encouraging you to sign with their finance.
loans.com.au makes it easy to get pre-approved for a car loan and has competitive car loan rates.
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.