Purchasing a new or secondhand car can be intimidating, but there are tips to ensure you drive away with a bargain
Outsmart your UAE car dealer with these winning tricks
It’s a very good time to be in the market for a new car right now, with many dealers struggling following a December rush for their beat-the-VAT promotions.
That’s the message from Bill Carter, chief systems and innovation officer at Autodata, a Dubai-based automotive data supplier.
“The consumer is in an ideal position,” he says. “In reality if you can walk through the front door and you are still breathing, they will give you a discount. Anyone who doesn’t even like negotiating will get a discount just for turning up.”
But despite knowing the time is right to buy a new car - and that it could also be right for something secondhand - you still need to prepare yourself to secure the very best deal possible.
“Do all your homework, do all your research on the internet, before you set foot in the showroom,” advises Mr Carter.
That way, when the sales rep tries to wow you with special features, you can nonchalantly reply, “I know that. I know all the specs”, he says.
Researching key numbers will help you steer through the negotiation with confidence by depersonalising the interaction, meaning you are relying on data rather than opinion or emotion to establish a final price.
You can find the current market value of the car you want to buy on a variety of sites including Edmunds, Kelley Blue Book or TrueCar. Also research any incentives you may qualify for, such as customer cash-back or low-interest financing; what if any the trade-in value is on your current car and any estimated or unforeseen fees, calculated with five per cent VAT.
Although Mr Carter says psychological tactics some buyers use in the West do not really work at dealerships in the UAE, they can’t hurt either.
One thing you could try, suggests Philip Reed, a writer at NerdWallet in the US, is to “be unpredictable”, as salespeople are encouraged to exert control over customers by pressuring them into a test drive and getting them into a sales office.
“When you make an offer on a car, and the salesperson leaves to ‘take the offer to my boss’, you should also leave the sales office,” he advises.
Either say you need to get something from your car or leave without explanation and walk around the showroom.
“Believe me, they’ll find you in a hurry,” says Mr Reed.
Once a discount and financing is secured, it’s not time to rest. Make sure you haggle to the end, pushing for and asking for as much as you can out of the salesperson.
“Most new cars come with a service contact, extended warranty,” says Mr Carter, “so get things that will be useful to you. There’s only so much you can actually do to a car. It’s all the little bits and pieces. Are you going to get free car mats, free paint protection coating?”
Rust proofing and insurance that will provide free repairs for minor dings and dents are also good to push for, he says.
When it comes to second-hand cars, Imad Hammad, founder and chief executive of the Dubai-based CarSwitch, which bridges the gap between seller and buyer, has encountered a lot of negotiations since launching in 2016. You can’t just treat the car as any other commodity, offering two-thirds of the price and expecting to proceed with any respect from the other side, Mr Hammad advises.
“What we’ve seen work better is to be as fact-based as possible,” he says. “And that helps avoid insults.”
One piece of information to find is what the car you are looking at is selling for new, says Mr Hammad.
“The new showrooms are almost always on discount and on promotion these days,” he says. “And oftentimes the car you are buying on promotion is almost cheaper.”
Once you have the new price in hand, apply depreciation depending on the age.
Due to a variety of factors, including the transient population, excess supply and a higher disposable income, depreciation on a car’s value is more aggressive in the UAE than in other markets. Mr Hammad puts it at 20 to 25 per cent for the first year, 15 to 20 per cent for the following years and 10 to 15 per cent after that.
Even with all that information, the seller could just disagree, which is where an independent reference point comes in handy. CarSwitch.com, for example, has a ‘car valuator’ that can help. Or you can find other, comparable cars on the secondary market.
“Just to be able to say ‘there are these three cars that are very similar to yours and they are cheaper,” he says. “Then you can have a rational discussion on what a fair price is.”
Then, if you really want to haggle, Mr Hammad advises getting into the condition of the car. Start with the history. Does it have a warranty or service contract? If not, take Dh3,000 to Dh4,000 off. Does it have a service history? If not, you can shave off more, arguing there is no way of knowing how it was cared for.
Every second-hand car should be taken to a mechanic for inspection, and while that can reveal larger issues that could impact your decision to proceed, it can also tell you whether items such as tyres, brake pads and brake discs are anywhere near being in need of replacing.
“That’s an easy Dh3,000, Dh4,000, Dh5,000, depending on the type of car you are buying,” says Mr Hammad.
Although it’s difficult to find out – unless you can find an insurance company that will tell you – and you might not want to proceed if you do, another bargaining chip is yours if the car has been involved in any accidents. Some companies, including CarSwitch, test the density of paint, which can reveal if the car has been repainted.
In the end, argues Mr Carter, buying a car these days is “all about pushing and asking for as much as you can get”.
• If you are selling a second-hand car, be aware that some people have been known to create fake listings that indicate other similar cars are available cheaper as a bargaining tool, says Imad Hammad at CarSwitch.
• Married couples have an advantage when negotiating in person when they can play "good cop/bad cop", in Hammad's experience. In response to this tactic, the seller tends to make the offer more attractive to appeal to the good cop.
• Don’t forget you can always walk away. “I had a retired friend with time on his hands who liked to go to dealerships, kicking the tyres on a new car,” writes Philip Reed at NerdWallet. “He let the salesman talk awhile, and then he would walk out - twice. On the third visit, my friend bought the car, figuring the salesman negotiated himself down to his lowest offer. Another friend of mine brought his restless two-year-old into the sales office. When negotiations stalled, he picked up his child and prepared to leave. That simple move dropped the price … Remember, body language can speak louder than words.”
• Go to a reputable dealer and avoid online and brick-and-mortar auto souks. That’s where you might encounter “grey imports”, which are vehicles imported from North America that may have been in accidents or otherwise damaged, warns Bill Carter of Autodata. Not only would the warranty not be honoured in the UAE, insurance companies are increasingly unlikely to insure them. If you suspect a car is a grey import, crosscheck the Vehicle Identification Number with Autodata’s site Vincheck.live.
• Take a minute before signing on the dotted line to make sure enticing offers are really as good as they appear. “Before you agree to any deal, ask for a breakdown of fees to see the total - or the ‘out the door’ - price,” writes Reed at NerdWallet. “In some cases, dealerships insert bogus charges or inflate the documentation fee to try to take back some profit they gave away. Once you know the total price, and if it still looks good, you can buy with the confidence of knowing that you're a savvy negotiator.”