Can you negotiate luxury cars ?
Haggling/Negotiation occurs for all types of Luxury Automobiles in all parts of the world.
I’ve purchased luxury (Mercedes/BMW/Audi) and high-end luxury vehicles ( Porsche & Maserati).In the higher segment, I’d use the word “negotiation” rather than haggling as it doesn’t go to and fro as often as an economical car where you haggle for every $
For any premium luxury car you have to qualify to get a seat on the negotiation table, this qualification is general perception based (whether you are genuinely interested and can afford it).
If you drive in a nice comparable car, your driver’s license shows you live in a rich neighbourhood and your dressing, all help getting you to the seat.
Once there, you should have a realistic number in mind (it usually happens after test-driving, vehicle config – options/packages and initial quote).
The form of negotiation is very different, it’s more often one step and rarely goes another.
You can’t just walk into a luxury dealership and start working out a deal. It takes time and patience, one needs to be engaged, seem interested through the process and should try to talk less.
Be straightforward with numbers and be realistic as no one has time to waste in bigger transactions.
After putting your price, keeping the mouth shut and patience is the key. Either the sales will come back with a counter or you’ll know that you have to increase your number.
In contrary to regular car sales, the more the numbers are discussed the lesser is the probability of striking a deal.
If you talk too much and try to be over assertive in all probability you’ll be booted out without a deal, and usually, there is only one luxury dealership per city per brand, it hurts future prospects as well.
Everyone thinks dealership will bend to make sales, not in the luxury segment as they have enough reputation to get the numbers anyways.
Here’s my experience of buying a 2020 Maserati:
I was initially quoted $198 K (AUD). The invoice pricing negotiation numbers were around $170K (including 5% profit) so I was willing to pay around $170–173K.
So initially, I asked them about loyalty benefits (I had a Mercedes S class) and what would the dealership do for me.
They came back with $178K (4K discount + 1k loyalty), after which I gave them my number – $150k upfront and asked how much should I put as booking amount (with utmost confidence).
The Salesperson said he’ll check with his Manager on what he can do (it is a cue that there is room).
He came back with $176.5K, to which I said I don’t have much time and I can discuss more when I have time (tad visibly uninterested).
As I was moving away, the sales manager came in for a word. He offered me to have a look at their inventory (onsite and upcoming for 3 months), usually, these vehicles are pre-ordered and in production with no customization option.
If I chose something from the inventory they could work on the numbers, I chose a couple that suited me and the number came down to around $175K.
The sales manager tried to assert that its the best deal I could get. I told him that I hate being in price negotiations and had come to them without comparing my options, I’d take some time to do comparisons and get back to them over the weekend.
I asked him to set up a time on the weekend (2 days after). He tried to convince me that’s a great deal and usual sales rebuttals, but I left the dealership knowing either they’ll call or on Saturday I’ll end up paying more than my number ($170–173K).
I got a call later that day for a vehicle from inventory for $173K if I take the delivery within August as there was some special offer (sales targets!).
I sounded happy and asked to send the details over (it kept them interested, added a bleak scope for further trimming).
I found that this vehicle was missing an option (heads-up display – $1.5k option) so I called back and told them, in addition, I said it’s not a big deal if there’s no heads-up display but I would stick to my $170K number in this case.
The manager said it was tough, I asked them to think it over, and they asked me to do the same.
On Saturday morning, I got a call to confirm my appointment from the Sales manager and he told me they found a vehicle matching my description completely.
I decided to open my mouth and take step-2 as now I had the vehicle in sight and the price was around my number, so it just needed a little fine-tuning before I wrote the cheque.
At the dealership, they stuck to the $173K number to which I put across few rebuttals like it’s my 3rd RR and I so want to buy it from their dealership, I was happy with everything and willing to book it right away. It’s just the numbers that I’m not sure about, and I didn’t wanna go around different places checking numbers, so it is them who have to help me out.
I put out $171K saying it’s a lucky number for me. After initial negative vibes, another discussion happened within the sales team.
After few minutes the sales director came in and congratulated me for my next –
I’m sure they would have made more than 5% of the MSRP as profit, if I were a business person I’d be looking at at least 8-10% on a 170k transaction which is justified by all real-world parameters!
Add Your Heading Text HereLuxury Car for Sale: 6 Negotiating Tips for Lower Prices
Allowing the dealership’s car price negotiator to arrange your financing is an easy way to give them the upper hand.
While it may appear as though they are doing you a favour by obtaining a car loan, they are actually selling you one of the most profitable products a car dealership sells.
By incorporating financing into the negotiation process, they gain another, frequently perplexing, lever to work with.
Lenders compensate dealerships for loan origination and permit them to mark up the interest rate.
Dealers are not even required to disclose that they have increased the rate they are offering, depending on the state.
Occasionally, a dealership will recommend a financing deal that benefits them the most, rather than providing you with the best deal.
Distinguish the Trade-In
Additionally, the salesperson will want to incorporate the fact that your car dealer is contingent upon the value of your trade-in.
That is something you do not want to happen, as it adds another ingredient to the confusion recipe.
If you do, you must closely monitor the transaction to ensure that they are not manipulating other numbers.
A skilled salesperson can show you a great deal on a new car by undervaluing your trade.
They can demonstrate an incredible trade-in value by increasing the price of your vehicle or adding another year to your financing.
Timing Is Everything When It Comes to Savings
Let’s get this one over with quickly. Arriving at the dealership shortly before closing time will not result in a good deal on a car.
It’s an urban legend that if you arrive late, they’ll give you a great deal so they can lock the doors and leave.
What is more likely is that you will irritate them and they will ask you to leave. A motivated salesperson will stay late if necessary.
A more accurate method of timing your purchase or lease is to consult the calendar.
As is the case with many businesses, car dealerships and their salespeople are compensated with commissions and bonuses at the end of each month, quarter, and year.
Purchasing a car near the end of those periods significantly increases your chances of negotiating a great deal.
Of course, this is true only if the salespeople and their dealership have not yet accomplished their objectives.
Avoid Expensive Extras
Just as you believe you’ve reached an agreement on price and are nearing the conclusion of the car-buying process, you’ll be ushered into the dealership’s financing department.
Without due diligence, the financing and insurance (F&I) department can be a dangerous place for your wallet.
This is where you will be pressed to purchase add-ons. Certain items may be inexpensive, while others may cost thousands of dollars.
There is a sense of urgency because the dealer wants to include the add-ons in the deal and possibly finance them.
They’re excellent at selling products and can make it appear as though you’re required to purchase items such as gap insurance before leaving the dealership.
There Are Multiple Car Dealers
Obtaining quotes from multiple dealerships used to be significant pain. It’s simple now, and it helps you avoid one of the most common car shopping mistakes: obtaining quotes from only one dealership.
You can compare car prices by obtaining quotes from multiple dealerships. It makes no difference if salespeople are aware they are competing for your business.
It’s simpler now that you don’t even have to leave your house.
You can request offers and barter back and forth by visiting multiple dealers’ websites and initiating conversations with their internet sales managers.
Following the coronavirus pandemic-related shutdowns, the majority of dealerships now have robust online sales processes.
Do Not Be Afraid to Leave/Walk Away!
While it may appear as though the dealership has complete control over the negotiation and purchase process, the truth is that you have complete control.
You have the greatest strength, and it is the ability to walk away from a bad deal. It’s a resource that far too few shoppers utilise.
Many people will not walk away out of embarrassment or because they like the salesperson. You must overcome this and remember that this is a business transaction.
Others are hesitant to abandon the time and effort they’ve invested in the process.
The reality is that if you’ve invested your time in a bad deal, failing to walk away will result in you continuing to spend your money on that bad deal for the duration of your loan.
It’s a poor choice that can wreak havoc on your finances for years.
Do rich people Negotiate car prices?
Yes, buyers of luxury automobiles do negotiate with dealers.
Concentrate your negotiations on the dealer cost. For a typical car, a premium of 2% over the dealer’s invoice price is a reasonable price.
A hot-selling vehicle may leave little room for negotiation, whereas a slow-selling model may allow you to negotiate even lower. Typically, salespeople will attempt to negotiate based on the MSRP.
Preparation is the key to avoiding the anxiety associated with purchasing a new or used car.
Negotiating a price with a dealership is one of the final steps in the process. It begins with a clear understanding of the car, truck, or SUV you desire, down to the trim level, options, and colour.
Our new car rankings and reviews, as well as our used car rankings and reviews, are excellent places to start, as they aim to answer the questions shoppers have when shopping for a new or used car.
Learning about the best way to finance your purchase, deciding between leasing and buying, and avoiding common pitfalls all help alleviate some of the stress associated with the car-buying process.
In the following sections, we’ll walk you through the steps necessary to arm yourself with the knowledge necessary to negotiate successfully.
We’ll then discuss some negotiation strategies that you can employ, as well as those that the salesperson and finance manager employs.