A woman is handed a key at a car dealership
Vehicles

Ask an expert: how do I negotiate a new-car deal?

A professional broker shares five tips to save money on your next car purchase.

By Shell on Mar. 15, 2022

Buying a car can involve a lot of negiotiating – something that makes many of us nervous. So how do you ensure you don't turn to jelly and spend more than you need to? Todd Simpson, managing director of Melbourne Car Brokers, Sydney Wide Car Brokers and Brisbane Car Broker, has these suggestions.

1. Get your game face on

Car dealers want to close a sale, not become friends, so don't fall for their charm. "They use a stepped process," says Simpson. "The first thing they do is be really, really friendly because there's a chance then you'll pay full tilt for the car. They'll then use the fear of missing out, give you an idea of scarcity so you feel you need to take action now.

"Then they'll stop becoming friendly. They'll say, 'Okay, what price do we have to get to, to get your business?' So you give up a price. If that doesn't work, they know if you walk into another yard that next dealer will get the sale, so they'll try to keep you on that yard for as long as possible.

"What you need to do is stick to your guns and don't necessarily accept the first price."

2. Do the groundwork

A car broker talks to multiple dealers to find the best price on a car. If you want to maximise your returns, you need to do the same.

"You need to say, 'Look, I want to buy a car, I'm here to buy a car, but I'm not here for a contract today, I need to read through it and I am going to a number of other dealerships," says Simpson. "Then shut up and see what price they come up with."

3. Don't forget your finance and trade-in

Buying a car is typically a multi-pronged deal involving finance and a trade-in. Just like the car, you should shop around for the best deal, not just take the first offer.

"There are a lot of deals at the moment where they're making very little on the car, but they want the sale for the finance, which they can make really good money on," says Simpson. "I also get trade-in prices from multiple people, not just the one person who's going to sell their car, and you can easily make up a couple of thousand dollars there."

4. Beware the upsell

Accessories are a handy profit source for car dealers, but you’re likely to find a better price elsewhere.

"They've got what I'd call their builder's margin," says Simpson. "The classic example is the ceramic coatings. I'd suggest you don't get them to do it, get the aftermarket to do it. But it is relative. For a tint they'll often take your door linings off. Now if that guy who does a tint for $150 scratches your door linings on your brand-new car, I guarantee he'll blame you."

5. Any good deal is tough right now

Just getting a new car is tricky in 2022. With supply-chain issues causing demand to exceed supply, a lot of buyers are now paying above-retail prices.

"At the moment most people are paying sticker price or even above it," says Simpson. "I've got two clients who both paid $10,000 above the recommended retail price for a second-hand Suzuki Jimny. It's becoming even harder to get a deal on a car and I think that trend's going to continue for a while yet."

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