Industry Secret to Getting the Best Car Price Quote
In any negotiation, the more options you have as a buyer, the better price you will end up with. This fact is especially true when buying a new car. It is an important part of the strategy that we discuss in our new car buying guide.
It may not be clear to you why we recommend that you submit quotes to many different services simultaneously. It might seem like a pain to do and you might decide to only submit one or two. In this article, we will explain some industry secrets that point out the advantage of filling out all of these forms.
Not All Services Have the Same Dealer Network
Each quote service has to negotiate deals with individual dealerships in order to get quotes for you or put you in contact with the staff responsible for internet sales and pricing. Due to contractual situations, it is unlikely for any one service to have a deal with every dealership in your area.
You want to make sure that you are working with all the dealerships around you. You will typically get better pricing if you've made contact through an online quote service instead of just cold calling the dealership. Using a quote service will get you in contact with staff dedicated to internet sales. They will know that you are likely in contact with the competition as well.
Once you fill out several quote requests, there will probably be overlap where a couple of services contact the same dealer. You don't have to worry about this. You can just rest easy knowing that you are negotiating from the position of the most strength.
Why Multiple Quotes are Important
You might think that you can "bluff" and tell the salesperson that you are working with other dealerships and you will get the best price. Your assumption is that they are all selling the same exact car so if you negotiate well you will get the rock bottom price which will be the same for any dealership.
There are many factors behind the scenes that determine what price they are willing to sell for. Once you know about these factors, you will understand why we recommend going through the process of making so many contacts and getting so many quotes.
Different Dealerships Have Different Sales Goals
Every dealership has its own monthly and yearly sales goals. These goals are set based on incentives they can get from the manufacturer as well as their own business model. It is not always a case of trying to get the highest volume possible. Due to factors like the cost of carrying inventory, sometimes a dealership can make more money selling fewer cars. Other times, by selling more cars they will get incentives from the manufacturer that lead to higher profits.
You may find the exact same car available from two different dealerships that are ten miles from each other. The first dealer might be within a handful of transactions of their sales target while the second may be very far from their goal. Therefore, the second dealer might be wiling to go to a much lower price and cut their profit margin just to make an additional sale.
Different Inventory
When we talk about different inventory, we are talking about both the quantity of a model that are on the lot as well as the different configurations. If you are dead set on a red car, you will want to make sure you are in contact with a dealer that has red cars. If they don't they will have to order one for you and typically they will not give you as good of a price on a special order.
The other factor that comes into play in the price quote is the quantity of a particular model available on the lot. If one dealership is selling a lot of the model while a second has a bunch of the model getting stale on the lot, the second dealership will likely give you a better price quote. Sometimes a dealer will nail the sales forecast and order the correct number and other times they will be wrong and have too many or too few.
Other Factors
Other factors also come into play when it comes to what price a dealership will quote you. If a dealership is very busy on a particular day, they may not be willing to go as low because they are selling cars left and right during that time. The mood of the salesperson or floor manager could also have an effect on the price.
Conclusion
As you can see, the "formula" that determines a car price quote is very complicated and many factors go into it. It is due to this complexity and the variation in pricing from dealership to dealership that we recommend using as many quote services as possible.
Recommended Quote Services
Every service that we recommend has been vetted to ensure that you will have a good experience and that they will protect your personal information. The first place you should go is to TrueCar. They will give you a guaranteed price which will be the baseline to use in all of your negotiations. You will also be able to use the data provided on the TrueCar Curve to build your case because you will see what others in your area have actually paid.
Your next stop should be Edmunds.com. In addition to getting you quotes from multiple dealerships, they have many research tools to help you in your decision making process. Cars.com and RydeShopper are also great resources to use to expand your reach to as many dealers as possible.
We mention a few more sites in our new car buying guide. If all of the dealerships in your area aren't covered by the services mentioned in this article, you will have to use some of the additional sites we recommend in our complete guide. We also have a ton of negotiating tips to use so we always recommend you read our entire guide before starting your negotiation. Remember, the price is only one part of the deal!
About The Author: Lyle Romer is a consumer advocate, Founding Contributor and Vice President of CarBuyingTips.com. A 20 years veteran of the auto industry with a high level of expertise, Lyle has been researching all aspects of the automotive sales industry.
Lyle's expertise and research played a vital role during the creation of CarBuyingTips.com in 1999 after years of industry research. He carefully observed every aspect of his own car buying experience as the internet began to take a foothold in the process. He also designed the site to make sure that consumers had easy access to the best consumer advocate education.
Lyle has been an auto industry insider since 1999. He also has worked with other automotive websites to help improve their offerings based upon feedback from CarBuyingTips.com users. He covers important industry events and gathers off the record sources while attending industry conventions.
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