Stop Leaving Money on the Table

Holdback, the Mysterious Dealer Profit Center

You may have heard of “dealer holdback” This is money the dealer gets from the manufacturer on each new car they sell. It’s usually about 3% of the sticker price, although it varies from manufacturer to manufacturer.

“Holdback” really just lowers the dealer’s cost below the invoice price.

However, don’t expect the dealer to give up any of the holdback. On rare occasions the dealer will give up some of this money, but as a general rule of thumb you shouldn’t expect it.

Rebates, they’re Your Money

The next step for you to take is to find out if there are any Rebates on the car or truck that you want to buy.

When the time comes for you to make a deal, if there are any rebates, be sure to negotiate your new car price without the Rebate.

In other words the Rebate is YOUR money that you will deduct AFTER the price is negotiated!

Know Your Trade –In Value

Research the value of your car; go to sites like Kelley Blue Book, Edmunds.com, NADA, and Black Book. Get an idea of what your car’s wholesale value is. Dealers will not give you over wholesale for your trade.

DON’T TALK ABOUT YOUR TRADE IN UNTIL YOU HAVE NEGOTIATED A FINAL DEAL. When you do this the dealer will give you a true value on your trade, not an inflated figure they can show you on paper

Negotiations

1. Go on line and find out what invoice price of the new car is (remember to include holdback).  Realistically the dealer has to make some money, usually it’s anywhere from $300 to $1000 depending on the price and availability of the car you’re buying.
2. Once you’ve agreed on a price now is the time to talk about your trade in.  You know what the wholesale value is, don’t accept less.
3. Now it’s time to get your rebate of the negotiated price.

Financing

When it comes to financing your purchase there are several things you need to know.

1.  Never negotiate a monthly payment, always negotiate the price of the car, and then work on your financing options.
2. Often car manufacturers have very good rates for financing and leasing that are competitive with your own bank. Because of regulations these days it can be harder to get a loan from your bank than with the manufacturer.
3. Lease your car if you want to trade every 2 or 3 years and don’t drive a tone of miles … buy if you keep your cars a long time or drive a lot of miles.

Buy Now or Wait Until The End of the Month

The public has this perception that you should wait until the end of the month to purchase.

That may have been true many years ago, but not now.

Remember buy when you are ready, not when the dealer tells you to.

As your automotive advocate I can help with buying new cars. I’ll help take all of the confusion and hassle out of this process; just let me know what I can do for you.