Best Tips: How To Negotiate A Used or New Car Price at A Dealership

How to negotiate car price - The very 1st thing we have to figure out when thinking about buying a car is to know if we really need a car or we just want one. We have to know what we need, not what we want.

May be you bought an SUV since you had a family on the way and needed the room.
This is you weighing needs versus wants when it comes to cars, and really is the very first step in the car buying process.

The next step in the car buying process is to save some money. We need money either to buy the car with cash and not take out a loan, or to put a decent down payment on the car so that we don’t have to take out a large loan.

We need to take some time to list everything down and then check off the list what we really need in a car. But don’t forget about the other features. We might be able to use them in negotiations later.

The first step in the negotiating process is to figure out what the invoice price of the car is that we want.

Then get an idea for what the car is selling for in our area. Prices vary by location, so knowing what others paid will help us. It won’t tell us what we should ultimately pay, but it will help us if we were planning on paying more.

Finally, we need to do a search to find the car we want, with the features we want at some local dealers.

I would say pick 4 dealers max. A few close by and then one that is a few hours away (this is another key for how to negotiate a car price).

Try to follow the process of how to negotiate a car price to get a great deal on your next car.

The only trick is that we have to be willing to walk away. If we can’t walk away from the deal, we're going to pay more than we should.

There are many other cars out there and many other deals. If this deal falls through, it’s not the end of the world. Be smart and be patient and we will get a great deal on our next car.

How To Negotiate Car Price When Paying Cash?

Saving up enough money to buy a car with cash is certainly more difficult than getting a loan, so people assume they should be rewarded for this achievement.

Most of us know that dealers make a certain profit on the sale of the vehicle (and the trade-in if we have one), but what most don't realize is that dealers sometimes make the bulk of their profit on the financing - by charging a loan mark-up.

Most salesman will ask us upfront if we will be financing or paying cash.

The trick is NEVER tell them we're paying cash!

When asked, just respond by saying "probably". If they keep hounding us, tell them we're interested in financing but that we want to agree on the price of the car first.

If we tell them we're paying cash, they will automatically calculate a lower profit and thus will be less likely to negotiate a lower price for us.

If they think we're going to be financing, they figure they'll make a few hundred dollars in extra profit and therefore be more flexible with the price of the car.

Once we hammer out and agree to the price of the new car, then we can tell them we changed our mind and would like to pay cash.

How To Negotiate New Car Price?

A successful negotiation starts long before we talk numbers with someone.

Our first step is to arm ourself with research that informs our position. In this case, that’s the price we’ll feel comfortable paying for a new car, also known as our “walk-away number.”

One way to help determine this is to find out the dealer’s wholesale price for the vehicle. It's the amount the dealership pays for a vehicle.

Big car sales dot the calendar, from President's Day to Labor Day to other non-holiday events.

We certainly may get a good price at those times, though salespeople may also be a bit tougher to negotiate with because of the “huge savings” they’re already offering us.

We also may not push as hard, because the marketing makes us think we’re already getting a large discount for a limited time.

When it comes time to negotiate, be polite but firm. Let the salesperson know we’ve done our research and that we’re ready to make a deal.

The goal is for everyone to be happy at the end of the negotiation.

Start below our target number and negotiate up slowly. If the salesperson keeps pushing the price, see what additional features we can get thrown into our deal.

Don’t be afraid to ask for the number we want. Be patient and persistent to reach it.

Set aside a whole day to go to the dealership, and plan to be there that long. Dealers will try to wait us out and go back and forth with their sales manager with offers and counter offers to wear us down.

Remember: We can always walk away and buy our new car elsewhere and that means the power in the negotiation is ultimately ours.

How To Negotiate Used Car Price?

When we're shopping for a used car make sure we take into consideration the money we will spend on up keep when we are negotiating the price.

We may consider paying a little more up front if the dealership will include a used car warranty or offer discounted oil changes.

As we are negotiating the price ask the salesperson for what we want and what we expect.

If the dealership can’t meet our expectations walk away and let the salesperson know we will be back when a good deal can be reached.

The dealership isn't going to give away the car and we need to be realistic about the price.

If we are always polite, show up with our folder filled with research about the car and stand our ground when speaking with the salesperson, we can get a great deal on our perfect used car.

How To Negotiate A Used Car Price At A Dealership?

It's very important we gather as much pricing information as we can find on the vehicle we want to buy.

Depending on how long a vehicle has been sitting on their lot, most used cars have anywhere from 10-25% marked-up in the asking price of the vehicle.

A dealer will always attempt to get us to come in to the dealership. They know they have a better chance of selling us a car at a higher price if they get us to come to the dealership, rather than trying to sell us a car over the phone.

It is okay to look at cars at a dealership, just do not start the negotiation process.

If we go to a dealership, let the salesman that approaches us know we are not buying a car today, we're just gathering information.

Use online used car listing sites such as Car Clearance Deals, Edmunds and CarsDirect to get as many quotes from multiple dealerships as possible on the particular vehicle we want to buy.

We start with the vehicles that have the highest prices first. It's okay to let the dealers know the price and mileage on the lowest quoted vehicle.

This will give them an opportunity to decide on how aggressive they can be on matching or beating the other dealers price.

When we give them the information, make sure we let them know we're ready to buy a car NOW.

Dealers will be more aggressive on discounting the price if they know they have someone who is willing to purchase right away.

Keep playing dealers againts each other, if a dealer discounts their car lower than the lowest price we have, they become the front runner.

Make sure we contact the dealer that had the lowest price first to give them a chance to play.

Once the dealer stops responding or refuses to discount the vehicle further, we'll know they've discounted the vehicle as far as they can.

Once we're at this point, we should have several vehicles to choose from. Before running off to the dealership, go for one last discount.

Contact the dealership and tell them we will come in and buy the car right now if they will discount it another $389.

This is an odd number and they may or may not discount the vehicle anymore but if we don't ask, we don't receive.