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

What to say when a car dealer asks your budget?

You want to be able to get the best car you can while spending the least amount of money possible to buy it. If you are asked if you have a budget, reply that the amount you'll spend depends on the car and attractiveness of the overall deal.

What to say when car dealer asks for 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.

How do you respond when asked about your budget?

Go ahead and share your budget estimate, even if it's a broad range. Cite a high- and low-end, or give a more specific figure if you're comfortable doing so. If your budget depends on a variety of factors, be open about that. What considerations will impact how much you can spend?

Should I tell the dealership what my budget is?

Don't be that passive. You don't need a car dealer to “sell” you anything. You should already know what you want and what it costs (in general) before you go to a dealer. If you tell a dealer what your “budget” is, that's how much you will pay.

Why not to tell car dealer you are paying cash?

Paying cash may hinder your chances of getting the best deal

"When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains. "So if you tell them up front you're paying cash, the dealer knows he has no opportunity to make money off you from financing.

What should my budget be for a car?

Financial experts recommend that your monthly payment should be around 10% to 15% of your monthly take-home pay. Additionally, your total monthly car expenses should be no more than 20% of your monthly income, and this includes your car payment, insurance, maintenance and gas.

What is a budget simple answer?

A budget is a plan you write down to decide how you will spend your money each month. A budget helps you make sure you will have enough money every month. Without a budget, you might run out of money before your next paycheck. A budget shows you: how much money you make.

How do you explain over budget?

costing or being more than the amount alloted or budgeted: The building is half-finished and it's already overbudget.

What is the reason for having a budget responses?

A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home. Overall, a budget puts a person on stronger financial footing for both the day-to-day and the long term.

How much less should I offer in a car dealer?

The MSRP is the Manufacturer Suggested Retail Price. Note the use of "suggested." Both the shopper and the dealer will start from different places. Also note that the invoice price is what the dealer pays the automaker for the car, so you cannot go that low. A realistic offer is 5% below the market value of the car.

How much can you talk a dealer down on a new car?

The main difference will be how much you can negotiate off the retail price: New cars. It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.

Why do dealers ask how much you owe on your car?

If you still owe money on the car, things get a bit more complicated. The dealership needs to factor in the payoff amount to settle your loan as part of the trade-in process. This affects the trade-in value they can offer you.

Will dealers come down on price if you pay cash?

Paying Cash Can Help Negotiations

Making an attractive cash offer prompts many dealers to provide bigger discounts – especially on cars languishing on their lot. Time your cash offer strategically after negotiating vehicle pricing down.

Why shouldn't you tell a dealer you have a trade-in?

If you tell the dealership that you have a trade-in first, and you need another vehicle, they're likely to appraise the trade-in before anything else. This means they may over-offer on your trade-in before you settle on the price of the next car.

What is the biggest mistake a dealer can make?

One of the biggest mistakes made by car dealerships is not having a target audience or not knowing their target audience. While you may want to try to sell to anyone who walks into your dealership, that isn't the best idea. If you don't have a target audience, it will be much more difficult to market to anyone.

Do car dealers talk to each other?

It's a tight knit community and the employees (sales, finance, admin, management) typically churn over from one dealership to the next. They talk in day to day business, at car auctions, selling trade-ins to lower end lots, during happy hour, etc.

What is a good down payment on a 30k car?

Consider putting at least $6,000 down on a $30,000 car if you're buying it new or at least $3,000 if you're buying it used. This follows the guidelines of a 20% down payment for a new car or a 10% down payment for a used car.

Is $500 a month too much for a car?

The average monthly car payment is now a record $733, according to Edmunds. And even if your monthly auto loan payments are around $500 per month, that still may be uncomfortably high. And that's before adding up the cost of maintenance, fuel, and auto insurance.

How much should I make to afford a 50k car?

If you wanted to stick to this rule of thumb and buy a $50,000 car, you would need a monthly take-home income of at least $7,240 if you got a car loan at a below-average rate and stretched out your payoff time for a long time. Many people will find that purchasing such an expensive car really isn't affordable.

What is the 50 30 20 rule?

The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).

What are the 3 types of budgets?

The three types of annual Government budgets based on estimates are Surplus Budget, Balanced Budget, and Deficit Budget. When the revenues are equal to or greater than the expenses, then it is called a balanced budget. You can read about the Highlights of the Union Budget 2021-22 for UPSC in the given link.

What to do if expenses exceed budget?

⇒ Move to cheaper housing. ⇒ Get a roommate or rent out a room. ⇒ Share housing & expenses with others. ⇒ Find services that will cut expenses in specific budget categories (e.g., food banks or free food distribution, vouchers for gas or laundry, etc.).

What is it called when you exceed a budget?

A cost overrun, also known as a cost increase or budget overrun, involves unexpected incurred costs. When these costs are in excess of budgeted amounts due to a value engineering underestimation of the actual cost during budgeting, they are known by these terms.

What does a budget show you responses?

Detailed categories on your budget will help you make better spending decisions. A budget says what will happen with your money, while a cash-flow statement shows what already happened.

What is a fair offer on a 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.