The car buying process of a new car can be both exciting and daunting. There are so many things to consider – from what model to buy, to what color, to whether you want all the bells and whistles. And then there’s the negotiation process.
For many people, negotiating is one of the most stressful parts of buying a new car. But it doesn’t have to be. With a little preparation and know-how, you can confidently walk into the dealership and get the best deal possible on your new car.
To help you out, we’ve compiled a list of 11 expert tips on how to effectively negotiate the car price.
Are you paying cash?
If you’re paying cash for your new car, you’ll likely have more negotiating power than if you’re financing. This is because dealerships make a substantial amount of money on financing – often more than they make on the sale of the car itself.
So, if you pay cash, be sure to let the dealer know upfront. This will give you more leverage in the negotiation process. How much is the sales tax?
The sales tax on a new car can vary depending on the state in which you’re purchasing the car. In some states, the sales tax is included in the purchase price while in others it’s not.
If you’re financing your new car, the dealer may roll the sales tax into your loan. This means you
Do your research
One of the best ways to prepare for negotiating is to do your research ahead of time. Know what the car you want is worth, both in terms of the sticker price and the trade-in value. This will help you know how much wiggle room can you get off the manufacturer’s suggested retail price.
The actual purchase price is just one part of the negotiation process. You’ll also want to consider things like trade-in value, extended warranty, financing terms, and extras. By doing your research ahead of time, you can be sure that you’re getting the best possible deal on your new car.
Car salespeople are trained negotiators when it comes to negotiating. They do this day in and day out, so they’re likely to be better at it than you are. As such, it’s important to be prepared before you head into negotiations.
Know what you want and don’t be afraid to stand your ground. With a little preparation, you can get a good deal on your new car.
Get multiple quotes
If you’re not sure what a fair price for the car you want is, get multiple quotes from multiple dealerships. This will give you a good idea of what the going rate is and will help you negotiate from a position of strength.
Similarly, if you have apples to apples comparison, negotiating the price of one vehicle against the other will put you in a much better position when dealing with the salesperson.
Make sure to visit local dealers as well as those in neighboring cities. Prices can vary significantly from one location to another, so it’s important to get a few different quotes before you start negotiating.
If you have multiple dealers quoting you the same price, you can use this to your advantage in negotiations. By letting the car salesperson know that you’re getting the same quote from other dealers, you can put pressure on them to match or beat the price.
Be prepared to walk away
If the dealer won’t meet your price, be prepared to walk away. It’s often said that the best deals are the ones that you don’t do. So, if the dealer isn’t willing to negotiate, don’t be afraid to walk away and look elsewhere.
In general, you should only buy a car if you’re getting it at a price that you’re comfortable with. If the dealer isn’t willing to meet your price, move on.
On the other hand, unscrupulous dealers may try to strong-arm you into a purchase by telling you that someone else is interested in the same car and that you need to buy it now or lose out. If this happens, be firm and tell them that you’re not interested. Then, walk away.
Car shoppers need to be aware that there are other options available to them, especially with similar vehicles. You can also check Kelley Blue Book as well as Edmunds to find out the worth of your trade-in and the value of the car you’re looking to purchase.
Keep in mind that a car salesperson will get you to buy the car, so they may not always have your best interests at heart. As such, it’s important to be prepared before you go into negotiations.
Take your time
When you’re buying a car, there’s no need to rush into things. Once you’ve found the car you want, take your time and be patient during the negotiation process.
Car salespeople are often paid on commission, so they may try to pressure you into making a decision. However, if you’re not ready to buy, don’t be afraid to walk away and take some time to think about it.
It’s also a good idea to sleep on it before making a final decision. This will help ensure that you’re comfortable with the car sale and that you’re not being pressured into anything.
Know what extras you want
Before negotiating, know what extras you want and what you’re willing to pay for them. Common extras include things like gap insurance and service contracts.
Extended warranties, in particular, can be very expensive and may not be worth the cost. Be sure to do your research before deciding whether or not to purchase this add-on.
A better deal may be had by negotiating the price of the car without extras and then shopping around for these add-ons later. You can often find gap insurance and service contracts for much less than what the dealership offers.
Pay attention to financing
If you’re going to finance your car purchase, pay attention to the interest rate that you’re being offered. Dealerships often mark up the interest rate on car loans, so it’s important to negotiate this before agreeing to finance.
If you’re not happy with the interest rate being offered, tell the dealer that you’re going to shop around for a better deal. They may be willing to lower the rate to keep your business.
Use this time to check on the same vehicle from another car dealer or bank to see if you can get a better interest rate. Once you have a few different offers, you can go back to the dealership and use these offers as leverage in negotiations.
Down payments
A down payment is often required when financing a car purchase. The size of the down payment will affect your monthly payments, so be sure to take this into account when negotiating.
If you have a trade-in, be sure to factor that into your down payment as well. The dealership may try to lowball you on the trade-in value, so it’s important to know its worth before heading into negotiations.
Consider financing options
If you’re financing your car purchase, be sure to consider all of your options. In addition to traditional bank loans, there are several other financing options available, including dealer financing and lease-to-own programs.
An auto loan from a bank will likely have a lower interest rate than dealer financing. However, dealer financing may be easier to qualify for if you have poor credit.
Bank or credit union loans also typically have longer terms than dealer financing, which means you’ll have a lower monthly payment.
Lease-to-own programs can be a good option if you’re not sure you want to commit to owning a car long-term. With this type of program, you make monthly payments for a set period, after which you have the option to purchase the car or return it.
No matter what type of financing you choose, be sure to shop around for the best rates and terms.
Shop around for the best interest rate and terms before deciding on a loan. And, be sure to let the dealer know that you’re shopping around for financing. This will give you more leverage in the negotiation process.
Likewise, the financing process itself can be used as a negotiating tool. For example, you could tell the dealer that you’re not interested in their financing offers and that you’ll be using your bank. This could help you get a better price on the car.
Know your bottom line
When you’re negotiating, it’s important to know your bottom line – the absolute maximum amount that you’re willing to pay for the car. Once you’ve reached your bottom line, be firm and don’t budge. This will help you avoid overpaying for your new car.
Car buying becomes expensive when you get over your set budget. Remember, your mission is to get a lower price than the dealer invoice price. You should aim for the final price which is around 3-5% lower than the dealer invoice price.
Likewise, pay attention to your monthly payment, rather than the total price of the car. It’s easy to get caught up in negotiating a lower purchase price and forgetting about the monthly payments.
If you’re not careful, you could end up with a car that’s out of your budget. So, be sure to keep the monthly payment in mind when negotiating.
Be willing to compromise
While it’s important to know your bottom line, you should also be willing to compromise. If the dealer is only willing to come down a few hundred dollars, it might not be worth walking away from the deal. Instead, try to negotiate on other terms, like the trade-in value or financing terms.
When you start negotiating, it’s important to have a clear idea of what you want. But, be willing to compromise on some of the smaller details to get the best possible deal on your new car.
A good price usually has some room for negotiation, so don’t be afraid to haggle a bit. The goal is to get the best possible deal on your new car.
Keep emotion out of it
One of the most important things to remember when negotiating is to keep emotion out of it. It can be easy to get caught up in the excitement of buying a new car and make decisions based on emotions rather than logic. But if you want to get the best deal possible, it’s important to remain calm and rational.
A car salesperson is trained to take advantage of emotional buyers and can easily convince you to pay the highest price. So, before you start negotiating, take a step back and make sure that you’re thinking with your head, not your heart.
In addition, you have to keep the out-the-door price as your focus. This is the total price of the car including all taxes, fees, and extras. Once you have this number in mind, it will be easier to stick to your budget and not get caught up in negotiating for a lower purchase price.
Get multiple offers
If you’re buying a new car, it’s a good idea to get multiple offers from different car dealers before negotiating. This will give you a better idea of the market value of the car and will give you more leverage in the negotiation process.
To get multiple offers, you can visit different car dealerships or use an online car buying service. When you have multiple offers, you can use them as leverage in the negotiation process.
For example, if a car dealership is offering a lower price on a particular car than the others, you can use this offer to encourage the other dealers to match or beat the price. The fair market value of the car you’re buying should be close to the offer price, so don’t be afraid to use this as leverage.
Test drive different cars
If you’re not sure which car you want to buy, take the time to test drive different cars. This will give you a better idea of what you like and don’t like and can help you narrow down your choices.
When you have a few cars in mind, it’s time to start negotiating. On the other hand, car buyers tend to shy away from negotiating when they haven’t test-driven the car. This is because they don’t have a good understanding of the car’s value.
If you take the time to test drive different cars, you’ll be in a better position to negotiate a fair price. Remember, the goal is to get the best deal possible on your new car
Likewise, car dealerships are more likely to negotiate when they know you’re serious about buying a car. So, if you want to get the best possible deal, it’s important to take the time to test drive different cars.
You also have to do this with private sellers, but the test drive is more important when you’re buying from an individual. This is because private sellers are not bound by the same laws as dealerships and may not be as upfront about the condition of the car.
Get a loan before negotiating
If you’re financing your new car, it’s a good idea to get a loan before negotiating. This is because the dealership will try to get you to finance through their in-house lender.
While there’s nothing wrong with financing through the dealership, you’ll usually get a better interest rate if you get a loan from your bank or credit union.
The reason the dealership does this is that they make money off of the interest rate. So, if you’re financing your new car, make sure to get a loan before negotiating. This way, you can use the interest rate as leverage in the negotiation process.
Know much can you negotiate off a car price
The answer to this question depends on several factors, including the dealership, the car you’re interested in, and current market conditions. In general, however, you can expect to negotiate anywhere from 3% to 10% off the sticker price of the car.
Your car purchase negotiation strategy should be based on your circumstances. If you’re not comfortable haggling over price, then it’s probably best to avoid negotiating and take the sticker price. On the other hand, if you’re an experienced negotiator or are buying a car that’s in high demand, then you may be able to get a significantly better price.
How much below MSRP should you negotiate on a new car?
The Manufacturer’s Suggested Retail Price (MSRP) is the starting point for negotiation, but it’s not necessarily the final word. In general, you should aim to pay no more than 10% below MSRP for a new car. However, this number can vary depending on the car you’re interested in and current market conditions.
The lower price you can get either for a new or used car, the better. You don’t want to be “that guy or girl” who overpays for a car’s price. A car’s purchase price is one of the most important factors in negotiating, but it’s not the only thing you should be considering.
Other factors should you consider when negotiating a car’s price
In addition to the purchase price, there are several other factors you should keep in mind when negotiating the price of a car. These include:
- The trade-in value of your current car
- The interest rate of your loan
- The length of the loan
- The options and features you want
- Any dealer incentives or rebates
Keep these other factors in mind when negotiating the price of your new car. By getting a good deal on these factors, you can save a lot of money over the life of your loan.
Know what is the best time to buy a car
The best time to buy a car is typical during the end-of-year clearance sales. At this time, dealerships are trying to clear out their inventory to make room for the new models. As such, you can usually get a good deal on a car during this time.
If you’re not able to buy during the end-of-year clearance sales, the next best time to buy is during the spring and summer months. This is when most people are looking to buy a car, so dealerships are more likely to negotiate on price.
Things you should never say when negotiating the car price
When negotiating the price of the car, there are a few things you should avoid saying. These include:
I really like this car
This statement gives the dealer the upper hand in negotiations as they know you’re interested in the car.
I can’t afford this car
This statement puts you at a disadvantage as the dealer will know you’re desperate to buy the car.
I’ll think about it
This statement gives you time to think about the offer, but it also gives the dealer time to come up with a better offer.
What you should say when negotiating the vehicle’s price
When negotiating car prices, here are a few things you should say to get the best price possible.
I’m not interested in this car
This statement shows that you’re not desperate to buy the car and that you’re willing to walk away from the deal.
This is my final offer
This statement shows that you’re not willing to budge on price and that you expect the dealer to accept your offer.
I’m not interested in any extras
This statement shows that you’re only interested in the purchase price of the car and not any additional features or options.
By following these tips, you’ll be in a better position to get the best price possible on your new car and avoid the common mistakes most first-time car buyers make when buying a new car.
In Conclusion
Remember, the goal is to get the best deal possible on your new car. That means you have to get the out-the-door price as low as possible.
To do this, you need to be calm, rational and prepared. You also need to keep the out-the-door price in mind and use it as leverage in the negotiation process. You aim to get a good deal, not to win the negotiation.
If you follow these tips, you should be able to get a great car deal from a car dealer. It’s always good advice to speak with different dealers to get the best idea of what each one is offering.
When you have all the information, you can make an informed decision and choose the car that’s right for you – at the best possible price.
If you’re looking for a new car, let us know what you’re interested in and we’ll help you to get the best deal possible. We can provide you with a no-obligation quote and help you to find the right car for your needs.
