Chapter 1: Smart Vehicle Shopping: A Step-By Step Guide (continued)

This chapter contains a quick reference guide in the form of bulleted lists that cover the important points to remember when you:

• Choose the right vehicle
  
• Set the price you want to pay
  
• Decide on Leasing or Buying
  
• Count the Costs
  
• Buying a vehicle
  
• Leasing a vehicle
  

Buying a Vehicle

1. Dress well and be confident. Know the vehicle you are looking for, the options package you want and be prepared with a folder full of information, including your opening bid and final price target (decided in advance).
   
   
2. Specify the vehicle, model, options package and price over invoice that you have decided to open the bidding with and don't let the topic shift.
   
   
3. Get the salesman talking in terms of price over invoice instead of MRSP. Let them know you will be including the other factors, like any applicable customer rebate or a trade-in, after the price over invoice is determined.
   
   
4. Don't wait around while the salesperson consults with others. Give them your contact information and let them know that they have a limited amount of time to accept your offer because you are buying soon and will buy from another dealer who is prepared to meet your price.
   
   
5. Counter their protestations that the price is to low by returning to the information you have at hand. Let them know the invoice price, the holdback, the demand and so on. Tell them the profit they are making on your offer with everything factored-in, let them know you are not prepared to give them more than that.
   
   
6. Don't make any bids after the first one. It is tempting to say "Meet me halfway and we'll talk." especially when the halfway mark is your real target. However, this is a mistake. Tell them "No thanks, it is still a little too high." until they offer close enough to or meet your real target. Then, don't jump at the deal once this has happened! Take a day to check your figures and make sure that this is the vehicle you want. Say you'll get back to them within a couple of days and let them know where to contact you if they decide to go down to your opening bid.
   
   
7. Phone or visit a few more dealers and see if you can improve on your firm price.
   
   
8. If you've got the deal you want, the car you want and the options you want, it is time to get the rest and see the finance manager. Make sure that you get any customer rebates, full trade-in value for your existing vehicle and any other special offers that may apply to you.
   

Leasing a Vehicle:

Many of the strategies for leasing are the same as those for buying, including the key strategy: being well informed!

1. Dress well and be confident. Let the salesperson approach you. Know the vehicle you are looking for and the options package you want and be prepared with a folder full of information and price-target decided in advance.
   
   Note: The price in the case of the lease is the total cost of that vehicle to you for the duration of the lease. See Chapter 7, Leasing a Vehicle for a full description on how to determine your price-target.
   
   
2. Specify the vehicle, model, options package and mileage allowance that you want but discuss the price in terms of capitalized cost (purchase price), residual value and the money factor. Make sure they know that you know what you are talking about and feel free to show them your information folder.
   
   
3. Continue your strategy to control the context of the negotiation. By keeping the focus on the elements of the deal that you know the most about, you take away the dealer's ability to work in profits you are unaware of.
   
   
4. Make sure you have a warranty that lasts for the duration of the lease. Don't put yourself in a position where you have to pay expensive repairs after two years only to have to return the vehicle six months later.
   
   
5. Counter their arguments by returning to the information you have at hand. Let them know that you know the invoice price, the holdback, the demand, dealer incentives and so on and that you have based your offer on an appropriate capitalized cost, residual price and money factor. Tell them the profit they will be making on your lease and let them know you are not prepared to give them more than that.
   
   
6. Don't make any offers after initially stating what you are looking for. It is tempting to say 'meet me halfway and we'll talk', when the halfway mark is your real target. This is a mistake. Tell them "No thanks, it is still a little too high." until they make a satisfactory offer or meet your real target-then say you'll get back to them within a couple of days. Let them know where to contact you if they decide to go down to your opening offer.
   
   
7. Phone or visit a few more dealers and see if you can improve on this lease offer.
   
   
8. Don't allow your negotiation to go bad at this point by signing a bad deal with the finance manager and remember to be wary of low monthly payments. In a lease, the dealer usually compensates for these with a low mileage allowance, a high residual value or other fees, leading to a higher total price in the end.
   

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