One of the most exciting yet stressful experiences in a person’s life is purchasing a new car. Part of what makes this process so frustrating is the dealership experience. Many of us feel intimidated when it comes to negotiating a price. Furthermore, you may not know what questions to ask to ensure that you are purchasing the right vehicle and getting the best deal possible. As you consider the many different vehicles and dealerships around, you should look at several factors before deciding, from the dealer incentives to the car models. The following are some questions you may want to ask to help inform your final decision.
1. What is the out-the-door price?
When looking at vehicles, you may be frustrated to find that the price you see is generally not what you end up paying. This is mostly due to additional fees. Some of these fees, such as titling, taxes, and licensing, are imposed by government bodies and are not negotiable.
However, some of the fees come from the dealership, so be sure to ask about them.
New vehicles often come with a delivery fee or destination charge not reflected in the manufacturer’s suggested retail price. Sometimes, dealerships charge document fees as well, and you can try to negotiate these fees to bring the total cost down. Asking about the out-the-door price helps break down everything you will owe when you make the purchase.
2. What kind of warranty is included?
Another important point to consider as you purchase a new vehicle is the warranty. Ask about what exactly the warranty covers and how long it lasts. Most manufacturers will offer a three-year basic warranty and a five-year powertrain warranty, but this can vary.
Often, dealers place mileage limits on these warranties for people who drive more than average. Importantly, warranties can vary not just by manufacturer but also by model, so always ask about coverage. Some dealerships offer a lifetime warranty, which is generally not cost-effective as they only cover parts least likely to break and require you to maintain very strict maintenance records. Likewise, extended warranties often cost more money than they are worth.
3. Can you beat my preapproved interest rate?
One of the most essential things to do before going to purchase a new vehicle is to get a preapproved auto loan. You can do this through your bank. Having this preapproval is a great bargaining chip. Typically, dealerships have a network of lenders that allow them to increase the interest on loans to increase profits. To combat this, you can come with your own interest rate and ask the dealership to beat it. When you do this, you put pressure on the dealership. Often, you will end up receiving a lower offer (unless your preapproved rate is already extremely low, at which point it makes sense to go with that).
4. Does the vehicle have dealer-installed options?
Some vehicles come with options installed at the factory. These options cannot be removed from the vehicle. However, dealerships will also install options to boost profits. These additions include upgraded floor mats, window tinting, wheel locks, and more. These options can increase the price by a significant amount.
Understanding that the dealer controls these additions gives you some important information when it comes to bargaining. You can also ask to see the buyer’s order, which outlines all the things you are paying for and the cost. Asking for this document can help you see exactly what extras come with the car and how much they are costing you, which can further drive negotiations.
5. Is there a used version of the vehicle?
Asking for a used version of the vehicle you plan to buy may not make sense at first, but the reasoning is that almost all new vehicles will drive smoothly. However, driving an older version of the vehicle can help you see how the vehicle feels after a few years of use. If it still drives well, you can rest assured that you are making a good investment. On the other hand, the car may drive much differently once it has some mileage on it, which is great information for making an informed decision.
6. Do you have any incentives?
Dealerships often advertise their incentives to the point that they become difficult to miss, but it never hurts to ask outright. Often, there are incentives you can get only if you go with a certain financing company, so be sure to ask about the stipulations and read the fine print. Factory incentives are not always advertised, which is why it is important to ask.
Further, incentives are more likely to occur toward the end of the month, so you should keep this in mind when timing your purchase. Also, ask about manufacturer rebates. While these rebates will not reduce the overall cost of the vehicle, they can help make them more accessible by refunding some of the purchase price.