Negotiating a deal on a new car is a Texas cage match between you and the salesman, and he has the metal folding chair to wield as a weapon.
In other words, advantage: dealership.
The sales person and the finance manager have you outgunned at the closing desk. They have a variety of gimmicks to make a deal appear more attractive than it might actually be.
Phil Reed is the senior consumer advice editor at Edmunds, and a guy who knows a lot about the dos and don'ts of buying a car.
He said that all too often a consumer focuses on a monthly payment amount and forgets to pay attention to details of the deal like financing rates and trade-in value.
"People are sitting at home watching TV and see a $299-a-month deal and think to themselves, I can afford that," he said.
He advises against basing your purchase of a car on a monthly payment in the first place; it opens negotiations to all manner of mischief.
But if you have some magic number in mind, like a great road trip, negotiating a monthly payment is more about the journey than the destination.
There are a number of ways to get to that $299 monthly payment and all of them might not be good for you.
Edmunds created a unique new calculator that provides you with the numbers from the four key areas of any new-car deal:
- The price people in your area are actually paying for the car you want.
- The value of your trade-in based on its appraised value minus what you owe.
- The amount of your down payment, if you are making one.
- The monthly payment and total interest to be paid based on the length of the loan and its rate.
It's called the Foursquare Simplified Car Pricing Calculator.
It is easier to use than to say.
You can access it by clicking on Simplified Pricing under New Cars at the bottom of the Edmunds.com home page.
Reed said many car dealerships use a similar worksheet in their new-car negotiations. This simplified pricing calculator makes you look at yourself the same way a car dealer does.
Often a dealer will juggle the numbers -- adding here and taking away there -- to arrive at a monthly payment.
Most car shoppers will have a difficult time keeping up with how these numbers are created and can easily wind up getting less for their trade-in or paying too high a finance rate than they should.
This calculator provides you with a defense against a dealer cooking the numbers. It arms you with the correct number for each of the four key pieces.
In negotiating a new-car deal, more information is always better than less.