by STAFF WRITER Published July 27, 2009 Credit Unions Online
If you are one of the lucky individuals that can take advantage of tax incentives available for new car purchases and/or the Cash for Clunkers program, you might think you are getting a great deal on that new car purchase before you walk onto the car lot. Remember that you should negotiate on the price quoted after any tax incentives, otherwise you will effectively be paying the full retail price of your new car.
Even though the government is offering some great financial incentives to purchase a new car, that does not mean you should pay whatever price a car dealership says. Car salespeople are likely to claim you are getting the best price because you can reduce the price of the car through incentives. These incentives come from the government, not the dealership or manufacturer. The lower price resulting from government incentives does not mean you should pay the full retail price that remains after applying any incentives. You can, and should, negotiate lower, just like any normal car purchase.
Also, remember when you are negotiating the price of a new (or used) car, never negotiate on the monthly payment. Always negotiate on the final price. Negotiating only on the amount of your monthly payment makes it very easy for car dealerships to charge a higher price, hide unreasonable fees, or add features that you did not intend to purchase.
One last thing, before visiting a car lot, make sure you take the time to drop by your locally-owned and operated credit union for a pre-approved car loan. If you have the financing in place prior to visiting the car lot, your negotiating power increases even more.