20 secrets to buying a car only dealers know

Buying a new or used car usually involves a lot of time, stress and money. Although most people have to face this task at least a few times in their lives, there are secrets to buying a car that can make the process a whole lot faster, easier and cheaper. Whether you’re buying new or used, take the pain out of your next car-buying experience by using these secrets to buying a car only dealers know.

1. Pay With Cash

If you want to get a great deal on a used car, cash is king, said Doug Nordman, author of “The Military Guide to Financial Independence and Retirement.”

“If you’re bottom-fishing at prices under $6,000, you can negotiate a huge discount from a private seller by paying cash,” he said. “Our daughter saved $500 off a $4,700 purchase, and over four years later that vehicle is still going strong.”

It might be tough to fork over a big chunk of change, but paying cash for a new or used car will also keep you from wasting money on interest payments and give you more equity in your car.

2. Leverage Banking Rewards Programs

Your bank may offer a rewards program that isn’t necessarily limited to cash back, air miles or points — sometimes those loyalty porgrams can get you great deals on financing, too, said John Schleck, ‎centralized and online consumer lending executive at Bank of America.

“While it is not a ‘secret,’ prospective car buyers may be pleasantly surprised to learn they can potentially enjoy a discount on their auto loan interest rate through the relationship they have with their bank or current lender,” he said.

3. Don’t Pay More Than $500 Over Invoice

You can offer a car dealer anywhere from $100 to $500 over a new car invoice price and still walk away with a great deal, according to InsiderCarSecrets.com, a consumer advice website for car buyers. The site recommended offering $100 over invoice price on lower priced vehicles, or $500 on a more expensive model.

Note that the invoice price is the dealer cost, according to automotive resource Edmunds.com, and is different from the manufacturer’s suggested retail price, or the sticker price. You can find out the invoice price on your preferred car ahead of time using NADA Guides.

If your dealership won’t bite on this offer, InsiderCarSecrets said you shouldn’t be afraid to walk away because there are plenty of other car dealers who will jump at the deal.

4. Shop the Manufacturer’s Website

If you’re in the market for a new car, this car-buying tip could save you money and hours of your time. One way to get multiple quotes from dealers is to go directly to the car manufacturer’s website, choose the car you want — including model, color and features — and request quotes from dealers in your area, according to Investopedia.com.

Since dealerships compete with one another, you will likely get the best price they offer without going through a painful negotiation process. Collect as many quotes as possible before heading to a dealership, and don’t be afraid to let them know what other dealers offered. If they can’t beat the sticker price, see if you can get any other freebies like an extended warranty, free all-weather mats or coupons for detailing.

5. Give Them One More Chance to Accept Your Offer

If you make an offer, and the salesperson comes back from the manager with anything other than an “OK,” you should get up and start to leave, InsiderCarSecrets recommended. If the salesperson tries to get you to stay, the site said you should only give them one more chance to make a deal.

6. Get Your Own Financing

If paying cash for a new or used car isn’t an option, then skip the dealership financing and shop around for your own car loan. Dealerships can manipulate the interest rates and loan terms to get a bigger profit out of customers, according to Investopedia. So when you shop for financing outside of the car dealership, like through your bank or another reputable lender, you can be clearer about the terms and cost of your financing.

7. Beware of the Add-Ons

Once you make a deal with the car salesperson, it’s very common to get passed on to a “business manager.” Although it might seem like it’s this person’s job to just do the paperwork, at most dealerships, they’re also a salesperson working on commission, according to consumer advocate and former car salesman Michael Royce’s website BeatTheCarSalesman.com.

They will probably offer you several extras — like an extended service warranty, security system, paint protection or rust coating — that will add to the car’s purchase price. These items are very profitable for both the car dealership and the account manager, and probably won’t add any extra value to your car. If you are interested in one of the offers, just know the prices are negotiable.

8. Get an ‘Out the Door’ Price

Sometimes, a dealer will offer you a low quote, only to add additional charges later that bump up the sales price. Always let the dealer know you want an “out the door” price, which includes all the taxes and fees associated with the purchase of a new car. That way you won’t waste time settling on a number, only to be surprised by a much higher price later, according to Investopedia.

9. Keep Your Trade-In a Secret

If your car salesperson asks whether you’re trading in your old vehicle, simply tell him or her you aren’t planning on it. This might not be entirely accurate, but keeping the trade-in value of your car out of the negotiation can help you get a better deal on your car. Once you have a firm price set on your car purchase, you can ask about trading in your car, suggested InsiderCarSecrets.

You will probably get offered less than the wholesale value of your car, but this forces the salesperson to take the trade-in value right off the top of your set purchase price. This way, the dealership can’t use your trade-in value as a negotiation tool or manipulate the numbers and make you feel like you got a better deal on your new car, according to InsiderCarSecrets.

10. Shop for Less Popular Models

Dealerships usually buy cars directly from the manufacturer. In this deal, there is typically a “holdback,” which is 2 to 4 percent of the total invoice price, reported ABC News. Once the dealership sells the car, it receives that money, or holdback, back from the manufacturer. If you are shopping for a new car, it might benefit you to look at less popular models so you can take advantage of the holdback and offer a price that’s lower than the invoice.

However, if you are shopping for a popular model, the dealership might be less likely to bite. It’s the simple rule of supply and demand: If demand is high for the car you want, you’re less likely to negotiate the holdback price. If demand is low, the dealership will be more open to negotiating.

11. Research the Extended Warranty

New cars come with a variety of warranty options, which the sales manager presents to you once you settle on a sales price. These extended warranties claim to offer extra protection should anything go wrong with your car, but according to Consumer Reports, the fine print might keep you from actually being able to use it. They are also highly profitable for the dealership — stores usually keep 50 percent or more of what they charge the customer.

Carefully read the fine print on the extended warranty to be sure you understand the coverage before purchasing it, Consumer Reports suggested. You might also already be covered on certain items through your homeowners and auto insurance.

12. Email a Salesperson Directly

A single email can help you get the best deal on a new car, according to MoneyUnder30. Collect at least one salesperson’s email address from each of the dealerships you’re considering. You want the salespeople to know who they are competing with, so make each email address visible in the CC line.

In the email:

• State that you’ve selected the car you want, and you’d like to buy it by a certain date.
• List the options you need, and that you’re aware of the costs associated with them.
• Include any special deals or rebates offered by other dealerships.
• State that you’re preapproved for financing but are willing to finance through the dealership.

Finally, give the salespeople 24 hours to respond to with their best offer and hit send. You might not hear from everyone on your email list, but you should get some competitive quotes.

13. Know Your Credit Score

If you need to finance your car purchase, your credit scores and history will majorly impact your monthly payments. Before you start shopping for a car, pull your credit reports and credit scores from the three major credit bureaus: Equifax, Experian and TransUnion.

The scores can vary by credit bureau, as can the history information. This way, you’ll be armed with your own knowledge instead of relying on the dealership to interpret your credit info and potentially charge you a higher interest rate, according to Lifehack.org.

14. Buy a Year-End Holdover

Toward the end of the year, dealerships need to make room for the next year’s models. It’s costly for dealers to hold on to old inventory, so they’re usually willing to make a quick deal, reported Lifehack.org.

This is especially true if the manufacturer has made major changes to the body style, engine choices or trim for the new year, so always pay attention to the new styles coming out. If there’s a major change, the dealership will want to get rid of the old styles as quickly as possible.

15. Rent Before You Buy

Test driving a car at a dealership is fun, but you’re not going to get a truly accurate feel for what owning the car is like. A car is usually one of the bigger purchases you will make, so it’s important to make sure the purchase is going to work for you.

Renting the same model of car before you buy is a great way to give ownership a test run, according to Edmunds. Give yourself a week to drive the car and really see how it meets your needs. If it’s a match, then you can feel good about your decision to buy.

16. Shop at Larger Dealerships

In March 2015, Popular Mechanics interviewed an anonymous car salesman who gave away some of his best car-buying secrets. Shopping at a larger, popular dealership will help you get a better price on a car, according to this expert.

“The larger dealers move a ton of inventory each month, so they can afford to sell a few cars at ‘Back of Book’ or $100 to $200 under invoice,” he said.

17. Have a Good Attitude

You’ll catch a lot more flies with honey than vinegar — especially during the car-buying process. Buying a new car can be stressful and unpleasant, but maintaining a good attitude and keeping calm can make the experience easier. It might be the salesperson’s job to be nice to you, but they’ll be more willing to help you get a great deal if you treat them well in return, according to InsiderCarSecrets.

18. Don’t Fall for No-Haggle Pricing

No-haggle pricing sounds like a dream, and it is — for the dealership. Road and Track said that this gimmick is most likely a worse deal for you. If you’re financing through the dealership, you’re likely going to have to haggle for that anyway, so you might as well prepare yourself to negotiate on price, too, to ensure you get the best deal.

19. Negotiate Like a Pro

When it comes to negotiating, don’t lose sight of what you want to pay. Oren Weintraub, who negotiates car deals for a living, told Edmunds that he keeps in mind the number he wants to arrive at when he’s in the midst of a deal.

He also said to avoid salespeople who intimidate or might pressure you, be aloof about the car — even if you love it — and play to your own strengths when you’re negotiating.

“If you can make a person who has what you want feel good about giving it to you — that’s the art,” he said.

20. Give One Final Inspection Before You Drive Off

If you haven’t done this already, give you car a careful once-over. If you notice any scratches, dings or any other issues, you might be able to schedule time with the dealer to get them repaired for free, according to insurance marketplace website TrustedChoice.com. You can even do this after you’ve signed the contract and received the keys — just be sure to do this before you drive off the lot.