Making a Car Bargain

Take control of the bargaining process. You control the deal when you handle it in the following order:

1. Get pre-approved

Avoid hassles over financing and focus on prices and rebates by getting your loan pre-approved. Tell the loan counselor the type of vehicle you want and the amount you want to borrow. Remember that tax, title and tags will add to the price, so actor those costs in. When your loan is approved, you’ll get a“ not to exceed” Navy Federal draft you can use just like cash when you go car shopping. The draft is good for up to 60 days.

2. Negotiate the purchase price

The “sticker price,” otherwise known as the Manufacturer’s Suggested Retail Price(MSRP), is not what the dealer paid for the car. Ask to see the invoice price—the cost to the dealer when the car is delivered to the lot. The final cost to the dealer is normally even less than the invoice amount. That’s because the dealer gets rebates from the manufacturer of 2% to 3% of the invoice price.

Never negotiate down from the MSRP. Always negotiate up from the invoice price. To research MSRP and invoice prices, use the Web Car book  at navyfederal.org. Dealer options—extended warranties; undercoating, rust proofing, upholstery and paint protection; insurance; add-ons; and fees for tags, title and taxes—all add to the price. They’re high-profit items for the dealer, and their prices are negotiable.

Most new cars today don’t need undercoating or rust proofing. Extra warranty insurance is usually less expensive if bought from an insurance company rather than the dealer. If at any time you feel pressured, hurried orconfused—leave.

3. Get it in writing

Make your final offer and state that the price includes all of the agreed-upon items. Get it in writing. Now ask if there are any rebates in effect. After you and the salesperson have agreed on the price, only hen should you mention your trade-in.

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