You walk on to the car lot and are greeted by a friendly car dealer. He doesn’t seem too pushy and seems to listen to what you want. He’s built up your trust, and now you’re certain that he is the kind of guy who’s gonna give you the best deal on Auto Loans and on your specific auto financing.
No, no, no. If you’ve ever sat in on a teaching class, you will have heard the instructor say “Don’t smile the first few weeks of class.” Why would someone tell you to do this? The thinking behind this statement is simple. If you are too open and too friendly at the very beginning, you will never be thought of as responsible or capable.
When you are trying to negotiate Auto Loans, you have to keep this “beginning teaching” mindset. Just like students may want to run over a teacher who is too friendly and easygoing, someone offering to finance your vehicle is probably going to “run you over” if you are too friendly, naive-acting, or smiley. Now, don’t take this the wrong way. You shouldn’t be rude, but you should be courteous and firm.
Always negotiate the PRICE, not the monthly payments. If the person with whom you’re negotiating a car loan asks you “How much are you hoping to pay per month?” I wouldn’t answer the question at all. Tell them instead how much you want to pay for the car overall. Work with that price and negotiate it.
Once you’ve negotiated the price, move on to the interest rate. Interest rate on your loan terms can almost always be negotiated. Every little percentage that interest rate is lowered will help your financial situation.
Say no to the extras. This isn’t a hard fast rule, but usually, the extras that might be offered to you are unnecessary. If you think one of these options sounds great for your car, remember two things. First, you can probably get it somewhere else for a better deal. If you don’t feel like going through the hassle though, and want to negotiate that at the car dealership be careful. The second tip I’ll give is that if you decide to negotiate for the extras, don’t let it be a part of your monthly auto loan payments. You should be able to negotiate that service or product as an item all to itself.
The key to negotiating really lies in your demeanor and your preparedness. When you go to negotiate your car loan,
- stand tall
- make good eye contact
- don’t smile too much, but be courteous
- act confident (even if you’re not)
- take the upper hand.
You need to lead with the questions and with the statements. Rather than asking the auto loan offerer to make suggestions, have something very specific in mind and make statements and ask questions that will guide the decision to match what you’ve planned for your budget. It might help you to work all of your questions out ahead of time–write them out if you need to! The more prepared you are, the more control you will have in your negotiation of Auto Loans.