Buying a new car can be daunting, especially given the money you are likely to spend and the amount of choice available.
But it doesn’t have to be a stressful experience if the buyer has the power during the purchase.
The South African vehicle market is still depressed and the vehicle manufacturers have acknowledged this by only slightly raising prices on new vehicles despite increases in their costs including an emission’s tax increase of R10 per gram of CO2 above 120g/km and a five percent rise in the maximum ad valorem excise duty for imported vehicles.
TransUnion recently released their Vehicle Pricing Index for 2018’s first quarter.
It showed, over the past year, a dramatic drop in new car price increases from 8.8% to 2.3%.
It is most definitely a buyer’s market with showrooms looking for multiple ways to move vehicles off their floors – the same goes for online sales platforms.
So what are some tips for getting the best out of your purchase process?
- First things first – don’t bring your old car into the sale as trade-in value. By all means, trade-in your old car to offset the cost of the new one but get the best price for your new car first. This makes it impossible for dealers to hide the risk factor they account for on the trade in into the pricing of the new car. Most dealers will leave money on the table if they know there is a potential trade-in, to cover themselves for the risk of taking ownership of a used car. The customer then has no way to know how much was left on the table.
- Try to arrange your financing beforehand yourself. This certainly gives you an upper hand in your negotiation and also helps with your budgeting.
- Research, research, research – if you don’t have all the information at your fingertips you will be at a disadvantage. Information like exactly what you are looking for in a vehicle and what your ‘deal-breakers’ are is powerful to have in a negotiation.
- Remember that the salesperson’s job is to sell – they will sometimes sell you their best car, not necessarily the best car for you.
- Shopping online means you are no longer bound by geography and time limits. Platforms like Beat the Price allow you to negotiate with multiple dealers across the country to find exactly the car that you want, at the best possible price. Bottom line is – your purchase power gives you the upper hand, so find a tool that allows you to speak to multiple sellers and get them to bid for your hard-earned cash.