Discounts That Car Dealers Get

It seems like getting a new or used car today is still very much a science.  Consumers seeking new and/or used vehicles must conduct considerable research if he or she is to get a good price on a vehicle when it comes down to negotiating price.  Reading a few car reviews isn’t enough to ensure that the consumer will get the upper hand during price negotiations; the consumer must also be fully aware of what types of discounts the dealer gets, how a car dealer makes money, and what types of sales tactics to avoid when seeking great prices from discount car dealers too.


Dealer Secrets and MSRPs

Car dealers have plenty of secrets and that is how they make their money.  Consumers need to learn the secrets that discount car dealers hold to ensure that they are really getting the steepest discount on a vehicle possible.  The way for the consumer to learn about discount car dealers secrets is through plenty of research.  Thankfully, consumers can conduct such research right online and thereby increase their price haggling power.

Car dealers might not always be forthright with how much they have paid for a vehicle. The wholesale price may be marked up considerably so that the car dealer can then, in turn, get a higher retail price for the car; this means that the consumer ends up paying more than he or she has too if they are not aware of the actual wholesale price.  By researching wholesale prices online before sitting down to negotiate price, the consumer can rest assured in knowing that they are not overpaying for the car of their choice. 

Kelley Blue Book® (www.kbb.com):  This website allows the consumer to look for specific makes and models through a simplified site search engine.  Consumers can also search based on the body style of the car they are interested in or by price range.  Once vehicles are selected, the Kelley Blue Book® online offers an overview of the car, information on pricing, information about vehicle specifications, and consumers can also avail themselves of free price quotes. When researching pricing at Kelley Blue Book® the site instantly provides the consumer with the manufacturer’s suggested retail price (MSRP) so that the consumer can then compare the MSRP to the actual price of the car on the discount car dealers’ lot.


Discount Car Dealers and Trade In Secrets

Dealers also manage to make a significant amount of money on trade in vehicles too and if the consumer is not careful, he or she can wind up losing out at the price negotiation table.  If the consumer is bringing vehicle to trade in on a new vehicle, the Kelley Blue Book® should be used to determine the estimated value of the car before the consumer visits the car dealer.  Sometimes discount car dealers will provide the consumer with fantastically low retail prices but will later give the consumer far less than what he or she deserves on a trade in.  
 
It is a little known fact that the Kelley Blue Book for consumers is not the same book as the Kelly Blue Book for discount car dealers.  The latter book has a profit already established for the dealer in its wholesale suggested price offerings so if the dealer offers you less than the suggested trade-in value, the discount car dealer is making even more money.  This fact may seem duplicitous and may leave the consumer not trusting the Kelley Blue Book® for unbiased trade-in value information.  The consumer can then compare such values presented in the Kelley Blue Book® with the present asking price for similar cars in local classifieds so that he or she can get a general idea about a car’s trade in value.  If the consumer is informed beforehand, he or she can get a good price and a great value for a trade in vehicle too.


More Discount Car Dealer Secrets

If a consumer wants to get the biggest discount on a vehicle, he or she is better off paying cash for the car.  Believe it or not, discount car dealers get as much as a two percent kickback from various lenders if they get the consumer to take out a loan on the vehicle purchased.  This action typically occurs behind the scenes and the consumer is never notified or even aware about the two percent markup which is tacked onto the vehicle.  While paying cash for the entire vehicle, it is recommended that the consumer put a sizeable down payment on the car in question.  If the down payment is sizeable, that means a diminished kickback for the discount car dealer and reduced interest payments for the consumer over the term of the auto loan.


Discount Car Dealers and Financial Considerations

It is also better to finance a vehicle so that the vehicle is purchased rather than choosing to lease the vehicle.  First off, a leased vehicle is one that will never be officially owned by the consumer so the money he or she spends does not go toward the ownership of the vehicle.  Secondly, some leasing options are far more expensive in the long run when compared to financing to own options. Further, many consumers fall into the mistake of believing that leasing prices are fixed and therefore non-negotiable.   If possible, the consumer should pay in cash for a car which is the best option, but the second best option is getting a loan to buy the car over time.

Consumers seeking great value from discount car dealers need to arm themselves with knowledge before entering into price negotiations.  Familiarity with vehicle MSRPs, wholesale prices, and financing options ensures that the consumer is appropriately prepared to haggle car prices with discount car dealers.  Thanks to the Internet there are plenty of sites offering full vehicle reviews, information about trade in values, information about fair retail prices, and information about financial lending options too.  Several hours or even days of research can be conducted from one’s home computer: the effort is more than financially worth it.