The average cost of buying a car is about $33,200, according to Kelly Blue Book, making a car one of the largest purchases you'll ever make. Not only will it likely cost you a lot of money to buy a new car, but the buying process is not always pleasant.
Buyers want cheap cars but hate dealing with car salespeople, according to a survey by Nationwide. In fact, several buyers cite dealer negotiations on car lots as the most dreaded part of the entire experience. This may be because buyers are unsure of what to say. Saying the wrong thing could give the dealer the upper hand, which could lead to you overspending and walking away with buyer's remorse.
Your wallet relies on you knowing what not to say when you buy a car. Read on for five things you should never say to a car dealer.
"I love this car."
Car dealers hope you fall in love with a car. The logic is that if they know you love the car, you might overvalue it in your head.
Some car dealers give great deals to customers they know will be excited about their car, but it's better to completely remove emotion from the car buying experience, regardless of the effect it may have on the dealer.
Keep your emotions close to the vest and let the seller know that you are interested, but that if you can't get a good price, you are happy to continue looking. Dealers don't want to lose money on trades, but if you walk the line between showing interest and appearing over-enthusiastic, you can generally come closer to ensuring the dealer just breaks even.
"I'm a doctor at University Hospital."
Most car dealers engage in a technique called "price discrimination" which is legal under the law in most casesFederal Trade Commission. Price discrimination involves selling the same product to different buyers at different prices based on factors such as their income. Dealers do this to maximize profits. The goal is to charge each customer the maximum amount he or she is willing and able to pay.
In general, you should avoid revealing more information about yourself than necessary, especially when it comes to your profession. It's normal for people to make their job titles sound as famous as possible. It is also common for a car salesman to ask a buyer during a conversation what he does for a living. However, this information may indicate that the buyer is able to pay more.
If a buyer has a minimum wage job, dealers are less likely to sell more than if they are dealing with a businessman. There is no need to lie; just don't show too much. If you're a cardiologist, just say you work in a hospital.
“I'm looking for monthly payments of no more than $300.”
Although the monthly payment is the most important factor for many buyers, you should never discuss it with the dealer during negotiations.
The first step is to determine the price. Dealers often bring monthly payments into negotiations to confuse the buyer as to what he is actually paying for the car. They use this approach to sell buyers more expensive vehicles. Once you start talking about your monthly payment, everything gets confusing because you don't know if it's for 24, 36, or 60 months, or how much of that would include interest if you financed through the dealer.
If the dealer asks how much you want to pay each month, simply say that you don't want to talk about it until you determine the total price of the car.
"How much do I get for my loot?"
If you have a transaction, try not to talk about it until you've negotiated the deal. Buying a new car and trading in an old one are two separate transactions, and it benefits you to do them in that order.
Once your trade-in is brought into the discussion, the dealer can take advantage of this to confuse you about how much you're actually paying for the car you're buying. The other pitfall is that if the dealer knows he owes you a certain amount for the trade-in, it may be harder to get him to budge on the MSRP of the car you buy.
If you trade, don't mention it. If the dealer asks, just say you're thinking about it or you haven't decided yet.
'I will pay in cash' or 'I have already arranged financing.'
Most people don't have $33,845 in extra money lying around. According to figures, more than 84 percent of people who buy a new car finance the purchaseConsumer Reports. Car dealers count on this and want you to borrow through their in-house financing programs.
If you're one of the few who have enough money to pay for your car up front, or if a third-party lender has already pre-approved you for a car loan, you can often get a better car deal if you keep track of this information. yourself.
If dealers think buyers are financing through their dealers, they are more likely to give away more because they expect to make up for it with interest on the back end.
If you have external financing or pay in cash, do not mention this. If the dealer asks if you want to finance, just say that you are strongly considering it. When it's time to pull the trigger, say you've changed your mind.
When negotiating a deal – especially the price of a major purchase like a car – knowing what not to say is just as important as knowing what to say. Remember: don't reveal too much, soften your emotions, and always negotiate the sticker price first.
More about buying a car:
23 things car dealers don't want you to know
30 biggest do's and don'ts when buying a car
The best and worst times of the year to buy a new car
This article originally appeared onGOBankingRates.com:5 things you should never tell a car salesman if you want the best deal
