What do you say when a car dealer asks your budget?
Counter the monthly payment conversation: Your dealer may ask what you're hoping to pay for your car each month. Instead, tell your salesperson that you'd prefer discussing the car's out-the-door price and fair market value. If need be, you can always discuss refinancing your car loan down the road.
Go ahead and share your budget estimate, even if it's a broad range. Cite a high- and low-end, or give a more specific figure if you're comfortable doing so. If your budget depends on a variety of factors, be open about that. What considerations will impact how much you can spend?
"This Is the Maximum I Can Pay Each Month"
Tell a car salesperson your budget for monthly car payments, and guess what? That's what your payment will be, no matter how much the car should have cost. That's why you first want to negotiate the total price, interest rate, and trade-in value.
- 'I'm a doctor at University Hospital. ' ...
- 'I'm looking for monthly payments of no more than $300. ' ...
- 'How much will I get for my trade-in? ' ...
- 'I'll be paying with cash,' or 'I've already secured financing. '
When negotiating, it helps to be able to justify what you're asking for, he adds: “Instead of saying, 'I want to pay this,' try something like: 'I've looked at five or six different cars that are similar to yours in the market. The price range goes from $19,500 to $20,700. I'm comfortable making an offer of $19,100. '”
In the 50/20/30 budget, 50% of your net income should go to your needs, 20% should go to savings, and 30% should go to your wants. If you've read the Essentials of Budgeting, you're already familiar with the idea of wants and needs. This budget recommends a specific balance for your spending on wants and needs.
- Calculate your net income. The first step is to find out how much money you make each month. ...
- List monthly expenses. Next, you'll want to put together a list of your monthly expenses. ...
- Label fixed and variable expenses. ...
- Determine average monthly cost for each expense. ...
- Make adjustments.
Car dealers, new and used, make more money in financing than they do in the initial sale. So never say you intend to pay cash. If asked, just say you want to hear all the financing options available.
The short answer is yes. However, for many, even the thought of negotiating new car prices can seem intimidating. Treat this experience like any negotiation and go in with a plan. The more thought you put into it upfront, the more confidence you'll feel about speaking with your dealer about the price of your new car.
The MSRP is the Manufacturer Suggested Retail Price. Note the use of "suggested." Both the shopper and the dealer will start from different places. Also note that the invoice price is what the dealer pays the automaker for the car, so you cannot go that low. A realistic offer is 5% below the market value of the car.
What is a red flag in a car dealership?
The Red Flags Rule (the Rule), enforced by the Federal Trade Commission (FTC), requires automobile dealers to develop and implement a written identity theft prevention program designed to identify, detect, and respond to warning signs—known as “red flags”—that indicate that a customer or potential customer could be ...
- Answer: I'm not concerned with a payment goal right now. ...
- Answer: I don't have a preference. ...
- Answer: Give me a deal I can't refuse and I'll buy today. ...
- Answer: Here's the link. ...
- Response: Tell them to assume excellent credit (if you know you have great credit).
One of the biggest mistakes made by car dealerships is not having a target audience or not knowing their target audience. While you may want to try to sell to anyone who walks into your dealership, that isn't the best idea. If you don't have a target audience, it will be much more difficult to market to anyone.
What Is the Best Month to Buy a Car? In addition to certain times of the week or holidays, some months are better to buy or lease new vehicles or purchase used cars than other months. In general, May, October, November and December are the best months to visit the car dealership.
- The day has come to buy a new car. ...
- Never Negotiate. ...
- Choose The Timing Of Your Follow-Up Call Wisely. ...
- Know What The Car is Worth And Offer Up To $1,000 Less. ...
- Always Be Polite and Respectful. ...
- Tip Your Sales Guy.
The total invoice cost on a vehicle typically ranges from several hundred to several thousand below its sticker price. For example, a midrange 2018 Honda CR-V with a $30,000 sticker price may have an invoice that's around 7 percent lower, or about $27,900.
The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
- Housing. Whether you own your own home or pay rent, the cost of housing is likely your biggest monthly expense. ...
- Utilities. ...
- Vehicles and transportation costs. ...
- Gas. ...
- Groceries, toiletries and other essential items. ...
- Internet, cable and streaming services. ...
- Cellphone. ...
- Debt payments.
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.
- Calculate your total monthly income from all sources. ...
- Categorize your monthly expenses. ...
- Set budgeting goals. ...
- Follow the 50/30/20 budget method. ...
- Make changes to your spending habits. ...
- Use budgeting tools to track your spending and savings. ...
- Review your budget from time to time.
How do you start a budget for dummies?
- Make a list of your values. Write down what matters to you and then put your values in order.
- Set your goals.
- Determine your income. ...
- Determine your expenses. ...
- Create your budget. ...
- Pay yourself first! ...
- Be careful with credit cards. ...
- Check back periodically.
to plan to spend money for a particular purpose: [ T ] They budgeted $6000 for property taxes this year. To budget is also to plan how to use something of which you have a limited supply: [ T ] You will have to learn how to budget your time to get all your work done.
Stay strong on your offer.
If the dealer won't meet your price-point, say it's more than you wanted to spend, and that you know you can find a similar car for a better price. Be willing to walk away if the dealer refuses to drop the price to an amount you're willing to pay.
If you want to beat car dealerships at their own game, you need to first understand the true market value of what you're buying and trading in. You should also get quotes via phone or email before you physically go into the dealership, and then skip all the extras they'll push you to buy.
- 1. “ So can I get a discount” after we've told you that is the best price we can do.
- 2. “ I just need to check with my wife/husband/business partner/boss…”
- 3. “… and I'll call you right back!”
- 4. “ I'm not interested, I don't care what you're selling”
- 5. “ ...
- 6. “ ...
- 7. “ ...
- 8. “