Showing Millennials How to Buy Cars
According to Yahoo, 1 in 4 millennials would rather have their mom and dad negotiate prices or haggle for them. That sounds unflattering but it's not a diss. Millennials are used to having things taken care of. Everything they need is online. Haggling over a price is old-school to them, and it's not surprising they feel like their parents could do a better job. After all, vehicles are expensive; it's not unusual to feel apprehensive about the process of buying one.
Keep in mind that wishing your parents could negotiate for you doesn't mean you're lazy. According the study we mentioned above, the average millennial reads 6 online reviews, asks 6 friends for opinions and watches 4 videos online when searching for a vehicle. We can assume they test drive at least a few vehicles, in addition. Millennials do their homework, they're just not particularly comfortable negotiating vehicle prices. Many say negotiating makes them stressed, probably because over half of them say they don't have any negotiating skills. Makes sense, right?
What Car Buying Skills Do Millennials Need?
Well, obviously, learning to negotiate would be helpful, but negotiation is an art form. It takes years to achieve proficiency in negotiation. A crash course may help a little, but learning the numbers behind a car's price can go a long way to help a millennial (or anyone else) save money.
A simple way to shop around for decent price is to get quotes online. You can request quotes from all your local dealers at once here at Top Car Lease Deals. The dealer that makes the best offer is the place to go, unless you want to find out if another dealer can beat that best offer (*wink *wink). Once you find out where to go for negotiations, you have two options to choose from when determining your offer.
Option number one is using a fair market price estimator, such as Edmunds's True Market Value®. It's straightforward but it takes all local purchase prices into account, which means the estimate will be a little inflated. You want to buy a car for less than the average purchase price in your area, not more or the same.
We recommend calculating the dealer cost and adding four percent. The process looks like this:
- Take the advertised price of the vehicle and subtract a couple thousand dollars (skip this step if the car has been on the lot for a long time and has been discounted. Just take the new advertised price, in that case.
- Multiply by 0.03 (that's 3%) and then subtract the result from the beginning price. Example: if the advertised price is $10K, you multiple $10,000 x .03, which will give you $300. So, we get $10K - 300 = $9,700
- Subtract any incentives such as rebates and military discounts. Let's say you're getting $500 off because you're active military. We would subtract $9,700 - $500, which equals $9,200.
- Take the number you get ($9,200 in our example) and multiply by 1.04 Example: $9,200 x 1.04 = $9,568. That's it! There's your offer! If it's not accepted, you can simply thank the salesperson for their time and go try somewhere else, or you can make another offer. A couple hundred dollars more may do the trick, if you can afford it.
How Do We Teach Them How to Buy Cars?
What's the best way to teach a millennial these methods? There's no better way than to sit down and practice with him or her. You could probably use the practice in preparation for your next car purchase, too. Get started on that homework! Happy shopping.
Don't forget to compare prices from all of your local dealers. It's free and there's no obligation involved. Click here.
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