4. How to Get the Best Price
Disclaimer: We apologize in advance for any grammatical and spelling errors in the slides.
About this module
In this module, I cover how to get the best price on your car. Buying a new car is no easy task. Calling dealerships, negotiating a fair price, threatening to “walk” if you can’t get the right deal is all apart of the process. After you complete this module you will be equipped with the blueprint to get your vehicle for the lowest price possible.
- Dealer terms
- What you can negotiate
- The Out the Door Price
- Best price for a new car
- The Car Buying Checklist
Resources
- Comprehensive Car buying terms article
- Out the Door Price Calculator
- Out the door price broken down in detail
- Email Negotiation Process + Content
- Negotiation Cheatsheet Article
- How to find the dealer invoice price
- How to calculate your vehicle Taxes
Full Video Transcript
Hello, and welcome to this module. How To Get The Best Price for your vehicle or auto loan, really for your vehicle. I’m not going to say you’re on loan because we covered it already more so how to get the best price so you can maximize your financing. So here is what we are going to cover. So the first thing I’m going to get into our dealer terms. So I have spoken about dealer terms previously, as you’ve been going through this, but I’m going to get into a little bit more in the weeds regarding dealer terms. So that way you’re an astute buyer, I’m also going to break down what you can negotiate, and I’m even going to include some helpful links to additional information, just so you can be a way more astute car buyer. Because at this point we’ve done everything we needed to do in order to find the car, get the financing.
Now we want to maximize the deal, right? So again, at the end of the day, I don’t want to make it seem like this, but when it comes to car sales, they’re trying to make money. You’re trying to save money. And typically, typically what ends up happening because you’re uneducated is they ended up making money and ends up costing you more. And because of you, because again, you can still have excellent credit and still end up getting the short end of the stick because you don’t know how to negotiate and you don’t know what you’re purchasing and you end up purchasing and buying things that you had no business buying. And then it, defeats the purpose. So again, I don’t want to seem like this is cold, but you really want to know what you can negotiate. The other thing is, I’m gonna break down.
What’s called the Out the Door price and why this is the most important thing you should be paying attention to throughout this entire process. When you’re purchasing a car, I’m going to break down the best price for a new car. The, and then lastly, we’re going to end with the car buying checklist. So that way you, so when you’re at a place where you’re, Hey, Hey, look, I’m ready to move forward. You already know what, what you need to have in order to get the deal done. So you’re not at the car dealership for the entire eight hours. One of the things I’ve noticed is, is that when you go to buy a car, it’s like, by the time you get to the, the, the back office and into the finance manager’s office, I mean, you’ve done. You’ve been there for so long and they need to do this and do that.
And you disagree to all of these things and you just want to get the car and leave. That’s a tactic, whether you realize it or not. And whether they’re going to communicate, they’re doing that as a tactic or not it’s happening. So you need to have this checklist to eliminate that from happening to you. So you can get out in the most efficient way possible. Cause time is money. So some common dealer terms you need to know. So I already covered this one MSRP, but the MSRP is important for you to know, because this is the Manufacturer’s Suggested Retail Price. It’s not saying that that’s what you’re going to end up paying, but this is what the is saying, that they suggest you pay. And it’s hardly the number that most people pay. Anyways, like I was saying before, 99% of consumers don’t even pay this, but you need to know what the MSRP is and what MSRP means.
The other thing is you need to know what the invoice price is. And the invoice price is also known as the dealer cost. So these are two different, these are different things just because the MSRP is saying 40,000 doesn’t mean that the invoice price, i.e. what the dealer paid for is the same. The dealer could have got the car for 38, 35, 32, 37. So the invoice price is something totally different. So if you’re in a negotiation and you’re speaking with the person, you can, you can just straight up ask me, Hey, well, what’s the invoice price, right? What was the invoice price that you guys got and got to look at you funny, and then they’ll tell you, but you want to know what that invoice price is. So that way you can see if they’re adding any additional margin, uh, unnecessarily for you to, uh, get the deal done.
So when we add, yes, they still have to get paid, but they don’t need to get paid on the back of you paying unnecessary money, going straight to their pockets, dealer holdback. Now, this is something that’s really important because a lot of, a lot of consumers don’t even understand that dealers get basically mostly money for units. So, so I don’t have all the inner workings of how it works. But what I do know is let’s just say, there’s a car it’s and it’s selling for the invoice price or the MSRP, but let’s just say you get it to the absolute bare bones, invoice price, what they pay you. They’re not making any money. Well, dealers also get something called the other holdback, which means even if there’s no profit for them, per se, in that deal for them to make over and above what they bought it for.
They still, because of the amount of units that they sell as a dealership are incentivize by, by the manufacturers to give you as well, to give them specific rebates and basically back in profit or back in amounts that they make. So do their whole back is something that, you know, even if the dealer says I’m not making any money, I’m on the invoice wise, you need to know that they still have something called dealer holdback. And that’s just something that they’re going to get. So most sales cars car sells me, won’t know this, this is more so like the finance manager and the upper management that will know about this, but the other whole back is something. So I don’t want you to think, Oh man, these people are making any money. Yes they are. They have something called. They have a holdback.
And then there’s another thing called incentives or rebates. So typically what happens is, is that you may not even realize that there is incentive and rebates. This is typically on brand new cars. So when you see those TV commercials that say, yeah, we have 0% financing for the next whatever months or, and or where we’re knocking off $15,000 or $5,000 or whatever, whatever their crazy incentive or rebate is. You need to be aware of that, especially for new cars, because you could literally say, Hey, look, there is an incentive or a rebate going on. And you, you may not even, you may not, they may, they may not disclose to you that there is an incentive or rebate that you’re eligible for. And if you don’t get that incentive or rebate there, they’re not going to take that off the cost of the car and you’re going to end up financing it and it’s going to end up increasing their pockets.
So you need to be aware of any incentive or rebates that are available to you. So that way you can take advantage of them, especially for new cars, and then make sure that, you know, Hey, look, you’re, you’re getting all the, all the bang for your buck. So these are just a few terms that you need to be aware of and understand how they work. Now let’s hop right into what you can negotiate. So right below this video, I’m going to include a link to a website called your auto advocate. And it’s a really, really powerful website that you can use as an additional resource to go back and really, really get into the nitty gritty of buying a car. However, I’m just going to give you some high level things that you can negotiate. So that way, you know, so the first thing, this is the best way to get a, the best price possible.
So the first thing is the selling price is absolutely negotiable because the selling price and the MSRP are two different prices. So the selling price might be 40,000. Um, but the MSRP or the invoice price may be 37,000. So moral of the story is whatever the, whatever they’re saying, they’re selling it for that price is negotiable period, point blank, end of discussion. You can negotiate the selling price. The second thing that’s, um, negotiable is a lot of people don’t don’t think to do this. They don’t think to get the selling price down to a small amount first, especially for a brand new car. Then once they’ve got, let’s just say the selling price again, 40,000. Um, but I was able to negotiate. I was able to negotiate the selling price from 40,000 down to less than say, 37,000. Well, at that point, now that I’ve already locked in that selling price, I can just easily say, okay, I want to go and make this a lease because they’ve already committed to it and they can make that happen.
So before you, before you even going thinking about, you want to do a lease or buy, and you, especially for a brand new car specifically, go ahead and negotiate the selling price to the lowest amount possible first. And if you want to lease, I’m not telling you to, but if you want to at least lock in that payment and at least because it’s going to be significantly lower than the lease that you would’ve paid because they would have, they would have really put you over the head. The other thing is, is that, am I covered this before? But I want to reiterate that ADM i.e. Additional Dealer Markup is something that is negotiable. You don’t have to pay additional dealer markup just because the dealership or the car owner felt. I mean, the car dealership felt like, Hey, because there’s a low, there’s a low supply.
I mean, there’s a high supply. There’s a, there’s a low supply, but a high demand of this vehicle, we’re going to charge an additional markup. And you know, you just gotta take the one on the chin. Nah, no. You know, so the ADM is negotiable. The other thing is dealer installed accessories. This is a big one. This even happened to me. And, um, um, I was over here sitting here laughing when I was going through this particular module for you guys about the dealer installed accessories because you’ll buy it. This happens real a lot on used car purchases. Yes. So they may say, Hey, look, we installed the low jack. Um, or we gave you tinted windows. Or we included the, the paint, uh, chip removal or whatever they chose to install with that. They chose to install. Like again, they, they installed that for every on every car just to say, Hey, look, we’re gonna, we’re gonna, we’re gonna include this price.
We’re going to install this on every car. And then we’re going to tell the consumer that they just got to pay that. So that’s why you need to know that, Hey, look, the installed accessories are negotiable, right? They, you don’t have to, you, they can eat that. Like you don’t have to pay for that. So you need to know when you’re getting to your, your application and you’re feeling you, you’re looking at the app, the, um, the invoice, so to speak. And you’re seeing all these itemized things and you see dealer and solid accessories. You can get pushed back on that. If you don’t want that dealer installed accessory, you can have them take it off or just say, Hey, look, I will understand that you, you paid 995 for that, but I need you to drop the price by 995. I’m not paying for that or we can meet in the middle.
So again, moral of the story it’s negotiable. The other thing is the doc fee. Now this really typically is not negotiable. You’ll notice that the doc fee is always going to be included on every type of thing invoice when you’re purchasing a car. And the doc fee is really just a fee that the dealership just makes money off of. There’s nothing really that they do. It’s just, the doc fee is not going to, it’s not going to go away. You’re not going to get the doc fee eliminated. So generally speaking in doc fee is anywhere between 200 to $400. Sometimes it can be $600, but there’s that additional documentation fee that you’re paying. So instead of, and it’s not going to come off the invoice, they’re not going to remove it. What you can do is instead of trying to get them to remove whatever the dock fee is just happened, lower the amount of the vehicle by that amount.
So I eat lower the selling price by the doc fee. So for instance, if the doc fee is $600 and you’ve negotiated your $40,000 car down to let’s just say, 39,000. Well, and you see that there’s a $600 dock fee. You say, Hey, look, let’s, let’s renegotiate the selling price at 38 four. So that way the doc fee is still included, but you lower than the selling price of the car too, to really cover the dock fee, so to speak. Uh, the other thing is interest rates and li lease factor rates. Those are negotiable. So especially if you’re getting dealer financing. So like I’ve covered before on getting financing. You want to already have your financing in place, in my opinion, before you even go and step foot in a dealership, however, it still is negotiable. You can still get them to run that particular, that particular deal to see if they can get a better deal.
Because again, they’re getting all of these incentives in some cases for the amount of loans that they do. So if you have already, and this is why it’s so important to already have a pre-approval on the front end. And then if you do, they’re going to try to beat that. Pre-approval because it doesn’t make sense to try to pay more interest for that car, which is why you need to look at the total cost of the car. And like, I’m, I’m, I’m communicating to you. You need to know the total cost of a car before you, you finance it, and then ensure that that total cost is going to be in alignment with the amount you’re financing while at the same time, ensure that you are getting the best interest rate. But the other thing holds true for at factor rates. So the lease factor rate is negotiable.
So once you get that price to where it is, if you want, if you want to get that factor rate down from, let’s say 7% to 3%, it’s negotiable. Because again, all this doin is gone, especially if you have excellent credit, which you wouldn’t be going through this process, if you didn’t have excellent credit. So that’s negotiable, let’s get that down. Uh, the other thing is the auto loan tiers. And like I was saying this more so has to do with if you’re getting financing from the dealership specifically. So like I covered before you may be at a tier four, I mean like a tier, a tier one prime or subprime, and you may be able to get bumped up a tier based off your, your, your relationship with the lender or the finance person’s relationship with their lender or the amount of volume that they do.
So you may be able to get that tier bump up, which is going to lower your interest rate in lower the overall cost of the vehicle. So these are all things that are negotiable. My suggestion is before you get to the dealership, you do all your due diligence on the front end, which is what you’re doing now, but watching this module. So that way, you know, going into it, what is negotiable? The other thing we’re going to go and happen is talk about the products and finance in, in, in the products and the finance and insurance office. So at
The end of the day, you’re going to have
To put yourself at a place where you want to move forward with the vehicle. So now that you’ve like, say, look, I want to move forward. I want to, I want to get this. I want to take care of this. Now you go to the back office and then that’s when you sign all the paperwork, all of those products that they break down and cover is negotiable. Even the amount that you pay for gap insurance, if your lender doesn’t provide gap insurance, you’re going to need to purchase gap insurance. So you want to make sure that if you’re, if they’re saying, Hey, look, gap insurance is going to be a thousand bucks, might be able to negotiate that down to 200 bucks. I mean, negotiate $120 off of it. It’s negotiable, but anything, any other thing that they tell you, you don’t have to give because they’re going to do their job.
And they’re really good at their job. That’s why they are in the finance department. They were really good at selling cars. Then they got really good at being in the finance. Cause all they’re doing really is checking their rates, but they’re really upselling you to purchase other things so they can increase their, their incentives and increase profits to the dealership. And they’re really good at the job. So you don’t want, you don’t have to feel bad because you’re telling that person, no, but again, this is a transaction. They don’t care about you. They want to increase their profits. So all of that stuff is negotiable. So this is the price that you need to be really, really paying attention to. And this goes back to how much car you can afford. And you have to think about this, not just the amount of the car, but we need to know what the out the door price is right below this video.
I’m going to include another link to where you can get access to an outdoor price, estimator calculator. So that way you can kind of know roughly how much you’ll be paying once you go through and you get the dealership because you’re not going to just be paying the, the, the price that you see online, right? You need to know all this stuff going into the transaction. So that way you can know how you can start negotiating as much down as possible. So the total bill, the outdoor price is the total cost of the vehicle, including the following. So the first thing is the selling price. So I already spoke about how this price is absolutely negotiable period, point blank in the discussion because the MSRP and the selling price are never the same. The invoice price in the selling price is never the same.
You can get this price marked down. If you don’t negotiate the selling price and you just end up paying in the selling price, then shame on you try to negotiate that. Because again, this is a big purchase and is a transaction, and it’s a transaction that doesn’t have that much, you know, transparency. So let me tell you a story. Let me, let me help you understand the outdoor price to kind of bring this home. Imagine going to the grocery store and you buy a packet of chicken and the packet of chicken. When you’re at the, when you’re picking up the chicken, it says, Hey, look, this chicken is going to be 10 bucks. Then when you get to, to, um, to the checkout line that the, the, the cashier says, okay, well, it’s going to be a dollar for the wrapping and the packing.
Then we’re going to charge you on another 25 cents. Um, another 50 cents, excuse me, we’re going to charge you 50 additional cents because we had to, we had to put that up. So instead of you paying $10 for this chicken is actually going to be $11 and 50 cents. You’re gonna be like, why don’t you just tell me it was $11 and 50 cents from the get go. That’s how car buying is, right? So you need to know that they’re going to be tacking on all these additional gotchas and fees and you don’t have to pay them. So, but, but you do in some scenarios do have to pay some of them. I already talked about which what’s negotiable, negotiable, but you need to also know, are these are, these are things that’s going to be included that I absolutely have to pay. The other thing is going to be taxes.
So there’s really no way around taxes in most States. So this is typically something you’re going to have to pay, and it will be included in the total cost of the vehicle or the outdoor price, so to speak. Uh, the other thing is the title. So you have to pay for that title fee at the DMV, and they’re going to help you. You do that, but this is going to be a price that’s going to be included in the outdoor, in the outdoor price. The other thing is the registration. This is another fee. Typically it’s not that much, but again, this will be included in the outdoor price. Then there’s those accessories I already spoke about at nauseum about these accessories. But again, you don’t have to pay for all of those new accessories, especially if it’s a used car and they added the accessories on.
But again, when it comes to the outdoor price, the price that you see online, isn’t going to be the outdoor price. That’s really what I’m trying to drive home here, because you may see a vehicle going for 67,000 and I showed you some that we’re going for like 40 whatever the vehicle is going for. That’s just to get you in the door. Then once they get in the door, that’s when all the sleeves comes, right? All of this stuff, Hey, they’re trying to get you with this and try and get you with that. So you need to know that typically the accessories is going to be included in the outdoor price. So all of these things you need to know will be included in the outdoor price. So what you want to do going into the transaction is have a good, clear picture of what this is going to be, because this amount is what you’re going to ultimately be financing.
So just because you were approved for a $45,000 vehicle, and you find a bill that’s 45,000 to the nose, or at least that’s what they’re selling and online as if you don’t get all that stuff negotiated down below the $4,500, $45,000 loan, you’re going to end up paying more money out of pocket. And that’s not what you want to do. You want to get all of these things included if you’re trying to pay no money out of pocket and don’t forget about taxes, that’s a big, gotcha. That really gets a lot of people. So you’re like, Hey, look, I want you to get this car for 30,000, but taxes were three grand. So now you’re, you’re going to end up either paying an additional three grand, or you’re going to end up financing an additional three grand, but you only got approved for, for 30 grand.
So you got to negotiate. So all of these things are included in that outdoor price. So take picture, take the user resources right below this video. So that way you can make sure you can get the lowest out the door price as possible, especially if you’re not putting any money down because all of these things will financed. If you’re not paying cash. Now the car buying checklist. So you already know you’re going to buy a car. You’ve done all the due diligence up to this point. You want to have this list of items when you get to the dealership, assuming they can’t deliver the car. So my first suggestion is that they can deliver the car to you and you don’t have to go into the dealership, so to speak. And you’re okay with that type of transaction that I would suggest you ask them to deliver it to you.
And you take a peek at it. But if that’s not an option, which nine times 1 of 10, it won’t be. But if that’s not an option, then you want to have this car buying checklist already before you get to the dealership. The first thing is you want to have obviously your payment. So as I’ve already told you, and adviced do not go to the dealership without already having financing in place. So when I say your payment, what I’m referring to is, is your financing. You want to have either the cash, if you’re paying cash, or you want to have the check from the dealer, or have the ability to obtain the confirmation number, to give them the check and that’s going to be something that’s on the cover? Obviously you want to have your identification documents. So you want to have your driver’s license.
So that way they can identify you. And you have typically, I would say your passport, but you really need your driver’s license because you’re going to be driving a vehicle. So they need to be able to identify you. Uh, the other thing is proof of insurance. This is another thing that is another God. They get you because you don’t have the proof of insurance. So I’ve already covered this, but again, call your insurance company up front and just say, Hey, look, I’m looking, I’m considering getting this. If I, number one, this is a twofold thing. You can get temporary insurance or just say, look, I want to add this vehicle to my insurance, or these have your proof of insurance for your current insurance. And most insurance policies say, Hey, look, when you get a brand new car will automatically include it on your policy for the first 30 days or whatever the case is.
So just have your proof of insurance. So that way, you know, uh, the other thing is you want to have, if you are looking into a trade in, you want to have the title of the trading. So if you’re looking to trade in your vehicle and it’s, it’s, it’s, um, you own it. You want to have the title to, to prove that you own that, that title outright. And if it’s another party involved that you probably want to have that other party involved before you get to that point of the transaction. The other thing is you want to have a current registration for the, trade-in assuming you’re doing a trade in. So whatever your registration is, you want to have that information handy. Then you want to have the loan account number for the trade in. Assuming there still is a balance on that, on that particular trade-in, because you, you want to know, okay, and this is another thing you want to do, especially when you’re trading in a new car, you want to try to get as much possible for that car.
Basically, you wanted, so the car, you owe 25,000 on a car and they’ll say, Hey, look, we’ll give you 24. You want to house yourself into, you will either get $5,000 off your existing car or get them to meet you as much low as possible. So that way you don’t have to finance an additional 5,000 in a deal, right? But the moral of the story without me going into that perspective is you want to have your loan account number for your current current vehicle and know what your current seven day civically your 7 to 10 day payoff. So and.. The loan account number will be able to provide them that information so that way, you know, but have this checklist handy. So that way you can be efficient and effective when you go in there as a, as a, as an informed buyer. But you now have everything you need to be able to go out and purchase your vehicle. So use the resources right below this video. They’re going to help you really, really enhance getting the cheapest price possible for your vehicle and follow everything that we’ve covered. So congratulations, I’m excited for you. Let’s go take action and get the car that you deserve.