Getting a good car deal
Date posted: June 18, 2012
When buying a vehicle, everyone loves a good deal. In fact, haggling over vehicle prices is usually expected. But is there anything you can do, to put yourself in a position to get that sometimes elusive lowest price? N.C. State University economist Mike Walden responds to the question asked by his wife, Mary.
“I’m giggling here because I know you love to go haggle. You love a good deal. I don’t like doing it. So we’re different in that respect. So this is probably more information for you than for me, because I’ll let you buy my next car.
“Anyway there’s a recent study that looked at this …. And the author concluded there are three factors … that really can help a buyer get a lower price on a new car. One is information. Research shows buyers who use the Internet, they compare prices. They get facts. They look at values, et cetera. They go in armed with that information. You’re going to get a better deal, because you’ve got information on your side to counter what the dealer has.
“Secondly, and this one surprised me, avoid a trade-in if possible. Research shows that buyers who have a trade-in, even after adjusting for the value of the trade-in … have to pay a higher price on a new car. And this may be due to the fact that they’re in somewhat of a weaker position via the dealer because they want to unload that old car. So, if you can, sell your car somewhere else. Avoid that trade-in.
“And thirdly — and this gets to subjective characteristics like the difference between you and me — those people who like bargaining and who are really good at it (and we’re all not good at it) obviously can get a better deal.
“So, if you use those three pieces of information, those three facts — information, avoid a trade-in and really arm yourself with good bargaining skills — you’re going to get the best deal when you buy your next car.”
Category: Economic Perspective