Is negotiation always worth it when buying a car?
Unlike second-hand cars, it is quite easy to do like-for-like comparisons between new vehicles. If you know what type of new car you want and what you can afford or are willing to pay, you are in a strong starting position to find exactly what you want at a good price. The challenge is to find a dealer with the right stock at the best price.
Why can different dealers have different prices for the same new cars?
“Sometimes manufacturers offer specials on selected vehicles to dealers in order to meet their sales targets for a specific period. Some dealers may then have access to volume stock bought at a reduced wholesale rate. Others may still have cars which were bought before there was a price increase which they are willing to sell at the original price,” explains Marius du Toit, experienced car dealer and founder of Beat The Price.
“All dealers have to bear holding costs in mind, so they may be willing to sell at cost price or even lower when they are overstocked or want to move units quickly to pay less interest or meet certain targets,” Du Toit explains further.
What about the time it takes to negotiate?
Doing online research and even buying online can save you a lot of time and trouble, provided that you deal with trustworthy service providers.
“There are many online platforms selling used cars but first prize would be to engage with a platform that helps buyers get the best price for a new vehicle from dealers around the country. This saves both parties a lot of negotiation time”, adds Du Toit.
For example at Beat the Price buyers request a specific new car. This request is sent to the dealers of that specific brand who compete for the sale by submitting the lowest price they can offer for the vehicle. The whole process happens online, so there is no need to phone or drive around.
The number of offers received per car requested differs depending on the popularity and availability of vehicles and other factors. According to Du Toit, the most offers a buyer’s request on the site has received to date was 55. It is hard to imagine anyone phoning, emailing or visiting even half that number of dealers to get quotes.
But Du Toit warns against trusting all online providers equally. “Be sure to check that the service is using reputable dealers who are official agents for the manufacturers. Buying through unofficial dealers can often lead to problems with warranties and service plans. If you’re not sure, then phone the service and ask them about how they vet their dealers.”
What about trade-ins as part of your negotiation?
If you already own a car, you are most likely wondering how much you can get for it to help pay for your new car. That is often where negotiation can become tricky. Dealers will want to account for the risk factor on a trade-in because people are most likely to want to sell their cars when they start developing issues. As a buyer you will not know how much money the dealers you’re negotiating with are leaving on the table for exactly that reason.
Du Toit’s advice is to first get the best price possible on a new vehicle. “Thereafter you have the option of either selling your second-hand car through a used car selling platform or to negotiate further with the dealer who is offering the best price on your new car.
So, the good news is, if you go about your search and purchase with the right platforms, you won’t have to settle for a dealer trying to sell you the car they have on their showroom floor when it is not the colour or specs you wanted nor will you have to navigate around bully tactics without all the information about the availability of a specific vehicle or the discounting possibilities on a specific model.
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