What to say when a car dealer asks your budget? (2024)

What to say when a car dealer asks your budget?

Counter the monthly payment conversation: Your dealer may ask what you're hoping to pay for your car each month. Instead, tell your salesperson that you'd prefer discussing the car's out-the-door price and fair market value. If need be, you can always discuss refinancing your car loan down the road.

Should you tell car dealership your budget?

The dealer does definitely need to verify your income, but not your monthly budget. Hammer out the cost of the car before you ever begin talking about financing, interest rates, loan terms, and monthly payments.

What not to say to a car dealer?

What should be included in a car budget?

It is generally recommended that you cap transportation expenses at 10% of your monthly income. Beyond the sales price, buyers should also budget for other expenses like repairs, registration, and insurance.

Why do people ask what your budget is?

It proves you've done your homework.

Having a budget number, or at least a range in mind, shows that you have some idea of what you're looking for and how much it should cost. This is a great way to very quickly demonstrate that you're a savvy buyer, and you won't be hoodwinked.

How much off MSRP can I negotiate?

How much off the MSRP can I negotiate? The discount you get off MSRP will depend on the market value of the vehicle. You can expect to see larger discounts on slower-selling vehicles. But on a popular vehicle, even a couple of hundred dollars off might be considered a good discount.

Is it OK to haggle at a car dealership?

With traditional dealerships, you expect to negotiate on price. According to the Federal Trade Commission, you can bargain on the dealer's profit margin on the car — the difference between the manufacturer's suggested retail price (MSRP) and the dealer's invoice price (what the dealer paid for the car).

What is the red flag rule for auto dealers?

The Red Flags Rule (the Rule), enforced by the Federal Trade Commission (FTC), requires automobile dealers to develop and implement a written identity theft prevention program designed to identify, detect, and respond to warning signs—known as “red flags”—that indicate that a customer or potential customer could be ...

What are 3 things to never tell a car salesperson?

How do you beat a car salesman at his own game?

If you want to beat car dealerships at their own game, you need to first understand the true market value of what you're buying and trading in. You should also get quotes via phone or email before you physically go into the dealership, and then skip all the extras they'll push you to buy.

What is the 50 30 20 rule buying a car?

Set your car payment budget

50% for needs such as housing, food and transportation — which, in this case, is your monthly car payment and related auto expenses. 30% for wants such as entertainment, travel and other nonessential items. 20% for savings, paying off credit cards and meeting long-range financial goals.

How much should I spend on a car if I make $300 000?

According to our research, you shouldn't spend more than 10% to 15% of your net monthly income on car payments. Your total vehicle costs, including loan payments and insurance, should total no more than 20%.

What is a realistic budget for a car?

To determine how much car you can afford, financial experts recommend keeping your total monthly car payment at 10% or less of your gross monthly income, spending no more than 15% to 20% of your take-home pay on car expenses, and ensuring that total vehicle costs, including loan payments and insurance, don't exceed 20% ...

How do you answer a budget question?

Example: “When I create a budget for an organization or project, I start by identifying funding and financial assets. Then, I make sure that the set benchmarks, goals and priorities are aligned with available funds. I then follow a process where I identify cost points, forecast revenue and gather department budgets.

Is it OK to ask a customer their budget?

Asking a client what their budget is right away set expectations for both parties and allows for an accurate assessment of whether or not you can accommodate them or if you need to refer them elsewhere. It also lets the client know that you take cost seriously and will strive to provide them with value for money.

How do you answer a budget interview question?

To answer this question, describe the strategies you use to ensure that a budget is accurate and up-to-date. These could include regularly reviewing the budget, tracking expenses against the budget, proactively communicating changes with stakeholders, and using forecasting tools to anticipate future expenses.

Should I pay MSRP for a 2023 car?

Market value takes into consideration several factors, including current demand, supply, options, and dealer incentives. If the car you're interested in is in high demand, a market value of $5,000 over MSRP might be a good deal. Generally, a sale price slightly under MSRP will be a reasonable target.

Do dealers really pay invoice price?

Please note, however, that the invoice price is almost always higher than the amount the dealer actually ends up paying to the manufacturer.

Should you ever pay MSRP for a new car?

These days, a dealer demanding the full MSRP isn't cheating you. You're paying the manufacturer's assigned price to that car. In this economy, it's probably a good deal. Brands with the deepest inventory may have dealers more inclined to negotiate or stick with the MSRP.

Can you talk dealership down on price?

The short answer is yes. However, for many, even the thought of negotiating new car prices can seem intimidating. Treat this experience like any negotiation and go in with a plan. The more thought you put into it upfront, the more confidence you'll feel about speaking with your dealer about the price of your new car.

When should you not haggle?

You're not supposed to bargain if an item has a price tag, nor should you bargain in a restaurant. Do not haggle for items from local cooperatives as many of them have fixed prices which makes it unsuitable to bargain.

How much can you usually negotiate off a used car?

Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds.

How do you know if a car deal is too good to be true?

The price is below market value: If the price of a used vehicle seems too good to be true, it probably is. Fraudsters will often post pictures of rare or exotic cars at low prices, and when you contact them about the vehicle, they'll say it's located in another state or outside the country.

Why do car dealerships have so many flags?

Boosting Curb Appeal

A well-placed flag can add visual interest and make a dealership stand out from the rest, attracting the attention of passing customers and potentially driving more foot traffic into the showroom.

What three guidelines are suggested when buying a car?