Does the thought of buying a new car elevate your blood pressure? If so, this post is for you.
There really isn’t any other purchase more bizarre than buying a new car. Here in the age of online commerce, we are expected to walk into a showroom and accept an inflated sticker price, or engage in the tired ritual of negotiation.
The visit to a dealership can wipe out an entire evening or even a weekend. It’s as if car dealers believe that they have a one-of-a-kind, rare product for sale. It may be expensive, but it’s certainly not rare.
There’s Always A Middleman Standing By
Of course, with any inefficient marketplace, there’s always a middleman that’s ready to help—for a price. New-car buying is no exception.
First came the concierge services charging large fees in exchange for their “negotiation expertise.” Now we have “free” online buying services, backed by big data and powered by your personal data. They get their cut, of course, but it’s hidden in the dealer price.
(How’s your blood pressure?)
I Have Good News
Here’s the good news. As long as you’re not in the market for a Ferrari or Maserati, it’s likely that your car of choice is essentially a commodity—it’s produced in large quantities and is widely available. So, like any commodity, if competition flourishes, prices fall and the buying experience improves.
But First, The Bad News
The auto industry knows that robust competition pushes down prices, so they do their best to limit it at every turn. I don’t blame them—it’s simply good business.
Take negotiation, for example. The process is so painful and time consuming that very few car buyers engage with more than a few dealers. They’ll sell you a car without negotiation, of course, but you’ll overpay by thousands of dollars.
There’s A Simple Solution
So, how do we boost competition without the typical back and forth negotiation hassle? Well, until dealers start listing their cars on Amazon (don’t hold your breath), it’s up to us to make the marketplace work efficiently. Fortunately, it’s really quite simple.
First, get ready to make an immediate purchase before you contact dealers. I mean, immediate. As in, the instant you have a great offer in hand, you’re ready to sign the sales contract.
Second, contact multiple dealers (I recommend 7 to 10) and invite them to give you a nonnegotiable price. Let them know you’ve contacted multiple dealers. Give each dealer a time-limited opportunity to make their best offer.
Done. It really is that easy.
Immediate Buying is Game Changing
The work is in the preparation, but you have to do it eventually anyway, right? Determining your budget, selecting your car and nailing down the details, taking a test drive, and obtaining a preapproved loan.
When you become an immediate buyer, you immediately become a hot prospect for car dealers.
Dealers spend a lot of time and money to locate potential buyers, but rarely make the sale (1 out of 10 times). However, immediate buyers are a sure sale if the price is right. Savvy dealers know the value of a quick sale and will respond accordingly.
When an immediate buyer requests a nonnegotiable quote from multiple dealers, those same savvy dealers will go directly to their best price.
You’ll likely receive multiple, good offers and the winning dealer will know it. As a result, your visit to the dealership will be transformed for the better. One day soon I’ll write a blog post about my last new-car purchase. The dealership visit was actually fun, believe it or not!
I’ve written a new e-book on negotiation-free car buying with step-by-step instructions called The 15-Minute Guide to Negotiation-Free New Car Buying: Simply Save More and Stress Less. Take a look at the preview if you think you might be interested.
I’d love to hear about your last car-buying experience—good, bad, or ugly! Take a moment and leave a comment below.
Until next time, happy shopping!