Learn the Art of Dealership Negotiation

There are 3 magic words to usebefore you start serious negotiationswith a car dealer.When the salesperson startstalking about the price and the paymentterms, tell them: "Quote it clean.""Clean" means the monthly paymentswithout all the built-ins—all theunwanted things that the dealer adds tothe price. With a clean quote, you canbegin your negotiations from the dealerinvoice up, not from the list price down.

Here are 10 other helpful Dolan tipsfor leveling the playing field and gettingthe best possible deal when buying orleasing a car:

1. Go with an attitude. Don't expressenthusiasm about any vehicle; instead,challenge the salesperson to prove toyou why you should buy something ontheir showroom floor.

2. Never allow a credit check untilyou're ready to commit. Once a dealerhas information they can use to checkyour payment history, credit rating, etc(through an application form or yourSocial Security number), they can andwill use it to negotiate. If you were lateonce with a payment, that might beammunition for the salesperson to sayyou don't qualify for the best possibledeal. To keep the salesperson from conductinga check based on your driver'slicense number, which you will have toproduce to take a test drive, insist tosign a statement saying that you're notauthorizing a credit check.

Good times to shop:

3. Shop at the right time. The besttime to buy or lease a car is when businessis slow. at theend of the month, midweek, on holidays,and on rainy days. Shopping atthe end of the model year (June andJuly) is a good time to buy a car.

When you're leasing, the best timeto look for a new model is at the beginningof the model year, generallySeptember. The bank will have just estimated the residual value (ie, the portionof the cost that you aren't paying inyour lease), which tends to be at itshighest then. You want the residualvalue to be high, since that makes thelease price lower.

Caution

Automotive News,

4. Find out how long the car hasbeen sitting on the lot. If a model's"days supply" exceeds 60 days, thedealer will be anxious to sell it.: A vehicle is usually a slowmover because it isn't well rated by consumerrating services. You can find outhow long the model has been out in a trade publicationthat is available on some newsstandsand in large public libraries. You canalso find cars that a dealer is anxious tomove by checking the white label on thedriver's door or doorpost to find outwhen the car was made. It shows thecar's month and year. The older it is, thelonger the dealer has been paying tokeep it on the lot. If your goal is to getthe lowest available price, keep an eyeout for models the manufacturer is tryingto phase out.

5. Don't go it alone. Always shopwith a friend. It's best to bring someoneto help you negotiate. But pick someonewho isn't an impulsive shopper and iswilling to play the cynic. A negativecomment from your friend will drivethe salesperson crazy. Script your shoppingbuddy, if necessary, to keep thesalesperson off-balance.

Caveat

6. Place an order. You may get a betterdeal if you order a car rather thanbuying out of dealer inventory, whichthe dealer must finance. : There'sno financing for orders.

7. Sell your trade-in elsewhere.Trade-in dollars at the dealership oftenamount to smoke and mirrors. You'llget more money if you sell it privatelyto a used car dealer. Also, keep in mindthat the dealer specializing in yourtrade-in's make may offer you morethan other dealerships.

8. Keep away from dealers' high-profitextras. Don't buy any of the followingitems from the dealer: rustproofing,glazing, undercoating, extendedor service warranties, andalarm/security systems. Buy these elsewhereand you'll save 50% or more.

9. Beware of low-interest financing.Many of those 0% deals are for 2 yearsonly, after which you'll be makingmuch higher payments than with ahigher interest rate over a longer period.Don't automatically avoid financedeals; just be aware of their terms.

10. The most powerful negotiatingtool that any buyer has is the ability toturn around and walk out of the showroom.There are hundreds of dealershipswith lots of cars for sale. Don't letthem wear you down. Feel confidentthat you've done your homework andtake control of the sales process.

Ken and Daria Dolan are the hostsof The Dolans, the nation's #1-ratedpersonal finance show, which originatesfrom WOR-AM in NewYork. For 4 years, they served asmoney editors on CBS ThisMorning and CBS News Saturday Morning. Theyalso previously hosted their own popular personalfinance show on CNBC and have appeared onmany other television shows, including The TodayShow. This article was adapted from Don't Messwith My Money, by Ken and Daria Dolan, copyright2003. Reprinted with permission fromCurrency/Doubleday Books.