28 Tips for Negotiating With Car Dealers

DuxX / Getty Images/iStockphoto

DuxX / Getty Images/iStockphoto

Getting a new car is exciting. Buying one, on the other hand, is stressful, time-consuming, overwhelming and riddled with ways to lose money.

When you’re considering getting into a new set of wheels but you’re not sure what to expect or how to handle yourself, consider the following tips before you walk into your first dealership.

Do Your Shopping at Home

Never begin your shopping journey in a dealership showroom. In fact, visiting a dealer is one of the last steps in the process. Always start by narrowing down your choices based on your needs, wants and budget — at home online, not at the dealership. Know the exact make, model and trim package you want.

If you walk into the dealership blind and announce that you’re just “looking around,” you give all the leverage to the salesperson who will then gladly “help” you find the car that’s right for you to buy — but really the one that’s right for them to sell.

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Do Your Homework

Before you ever walk into a dealership, make sure you gather as much information as possible about the car you have your eye on. That includes the resale value, average cost of ownership and the commonly paid price.

That’s not the MSRP. Instead, use a tool like the Edmunds True Market Value (TMV) finder, which will tell you what people in your area actually end up paying for the exact car you want.

Learn About Incentives

According to Credit Karma, many dealers, including Ford, Toyota and Honda, offer both consumers and dealerships incentives to buy. It’s up to you to learn about those incentives on your own. It’s also up to you to make sure the dealer includes those rebates and other incentives in the car’s final price.

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Bring Your Research With You

When you do learn about your car’s actual market value, cost to own, manufacturer rebates, etc., print it all out, put it in a folder and bring it with you to the dealership. First of all, it’s handy to be able to refer to your materials when you’re actually looking at the car — it all tends to blur together when you’re researching so many vehicles. Also, it’s good to be able to refer the dealer to what you’ve learned if there are any discrepancies. Finally, it lets the salesperson know you’ve studied up, you know your stuff and you’re not likely to be oversold.

Don’t Let the Salesperson Take the Wheel

You might encounter a salesperson who starts with an “if you like that, you’ll love this” approach in an attempt to steer you away from the vehicle you’ve chosen. According to Car and Driver, this is rarely because they truly think they’ve found something that’s a better fit for your needs and budget. In most cases, they’re trying to unload a vehicle that they need to get rid of and that they think they can sell that day.

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Bring Someone With You

According to Edmunds, you do yourself a service by not strolling into a dealership alone. It’s not unusual for two salespeople to work with you at the same time, and while they might not intentionally be ganging up on you, it might feel like they are. Even if you’re dealing with a solo sales rep, it’s always good to have a second set of eyes on the car and the paperwork, a second brain crunching the numbers and a second opinion on the entire process.

Avoid the Weekends

According to Edmunds, the best time to shop for vehicles is on a weekday early in the week. The worst time is the weekend. Weekends are busier, which means the process takes longer, service isn’t as good, you get less individual attention and, most importantly, prices are higher.

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Shop Around

Buying a car is exciting, and you might be tempted to jump into the first deal you’re offered if it seems like a steal. It might be, but despite what the dealer says, it will still be there in a few days. Shop around. It’s likely that several dealers in your area are selling the car you want. Visit as many of them as you can — at least three — compare offers and let them know you’re doing it to try to stoke a bidding war for your business.


If you are shopping around at multiple dealers, Credit Karma suggests emailing all the dealers you’re considering and trying to negotiate a price online. This is obviously faster and easier than physically visiting multiple dealerships, but the real benefit is that it allows you to conduct a side-by-side comparison of the same vehicle right there at your laptop.

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Go In With a Long-Haul Mindset

According to Edmunds, you should plan to make a day of it — between the test drive, negotiations, trade-in, paperwork, financing discussions and everything else, you could easily spend four hours or more at the dealership. Don’t schedule anything else that day and eat before you go.

Let the Dealer Know You’re Serious

While you shouldn’t fawn over a vehicle, you also shouldn’t overplay your hand and make the dealer feel like you’re just a mildly interested window shopper. Don’t play hard to get or make the dealer chase you. CNBC recommends letting them know up-front that you’ve chosen your car, you’re ready to buy if the deal is fair and that if you walk away satisfied, you’ll let your friends and social media networks know about your experience.

Get Preapproved

One of the best things you can do to get the best possible deal is to walk into the dealership armed with preapproved financing. When you get preapproved, you’re not at the mercy of the dealership’s financing arm, where they make most of their money. You can always apply for financing to see if they can beat what your lender offered, but if not, you’ll be able to drive away knowing you got the best rate possible.

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Consider a Credit Union

Unlike banks and other traditional lenders, credit unions are member-owned nonprofits. Because they don’t answer to quarterly profits-obsessed shareholders, they are often able and willing to give better rates on loans to their members. Sometimes, they’re even able to work with members whose shaky credit might keep them from getting a traditional loan.

Ask To See the Loan Offer

If you do decide that dealer financing is right for you, always ask to see the loan agreement. Most dealers work with third-party partner lenders — dozens of them in some cases. Many of those outside banks allow the dealer to tack on a higher financing rate in exchange for getting them a new customer and doing all the work — and they’re under no legal obligation to tell you if you’re actually getting the rate that the lender offered.

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Don’t Reveal How You Plan To Pay

A dealer is likely to ask if you plan to finance the vehicle through the dealership. Say you haven’t decided and you’ll discuss financing after you come to an agreement on the price of the car. If the dealer knows you’ve secured a preapproval, the salesperson might go higher on the price of the car to make up for the fact that they won’t be making money on financing. If they know you plan to finance through them, they might go lower on the vehicle price because they know they can juice the loan rate.

Keep Trade-In Negotiations Separate

Just as the financing and purchase negotiations should be kept separate, so, too, should any discussions about trade-in and purchase. If you’re trading in an old car, negotiate the price of that deal first and separately, and get the trade-in value in writing. Here, too, if you allow the dealer to bundle the negotiations, the salesperson can seesaw the discussion — giving what seems to be a great offer on the trade-in only to make up for it by boosting the cost of the car you’re buying.

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Don’t Overestimate Your Trade-In Value

Many sites, like Kelley Blue Book (KBB.com), offer free appraisal tools that will tell you what you can expect to get at sale or trade-in. A common mistake, however, is to overstate the car’s condition when it comes time to enter those values into the tool — sometimes because of a sentimental connection to the car that only applies to you and never to the dealer. According to KBB, most cars, 54%, are in “good” condition, one up from the bottom category, which is “fair.” Fewer than 1 in 4 are listed as “very good” and just 3% are listed as “excellent.”

Don’t Negotiate Based on MSRP

According to CNN, salespeople are trained to negotiate down based on the car’s MSRP, which is what they’d like to get for the vehicle. Instead, negotiate up based on the car’s invoice price, which is what the dealer paid for the car. Generally, 2% above the invoice price is a fair deal for both parties.

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Don’t Negotiate Based on Monthly Payments

Another common tactic is for a dealer to ask how much you want to spend per month. Never fall into this trap. Once a dealer knows your budget, they can sell you almost any car they want. By stretching out the loan terms, they can shoehorn a much more expensive car into your monthly budget. The problem is, you get stuck not only with a more expensive car, but you wind up paying far more money in interest payments — if they’re doing the financing, they win twice. According to AutoTrader, $400 a month for 60 months (five years) is enough for a $24,000 car. For 72 months (six years), it’s $28,800, and for 84 months (seven years), you can get a $33,600 car for the same $400 monthly payment. Determine what you can afford based on a 60-month payment plan and make that your budget.

Never Turn Over Your License or Keys

Although it’s rarer now than in years past, according to CNN, some dealers still resort to tactics designed to keep prospective buyers in the showroom until a deal is done. One of them is to ask for your license and/or keys as security during a test drive. If you return and decide not to buy, however, you might find that your collateral is in a manager’s office, in a secure room or somewhere else that keeps you in the showroom while the dealer makes a final pitch. Thanks to the rise of online reviews, however, these tactics have mostly been weeded out.

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Never Agree To an Early Credit Check

If you plan on financing a car, you’ll eventually have to submit to a credit check. According to Car and Driver, however, some dealers will try to get you to consent to a credit check early in the process, perhaps because they have to “screen” potential buyers. Not only does this not benefit you in any way, but so-called hard pulls can actually damage your credit.

Say No to Fees

Some fees, like those associated with destination charges, tax, title and registration, are mandatory and can’t be swept away. According to Consumer Reports, however, many dealers try to slip extra fees into the final bill — and you should contest every one of them. Dealer prep, vehicle procurement and vehicle prep fees, for example, should be built into the mandatory destination charge. Also argue advertising fees, loan payment fees, market adjustment fees and documentation fees.

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Negotiate the Final Price Only

One good way to avoid fees altogether, according to Credit Karma, is to negotiate only the final price, sometimes called the out-the-door price or drive-away price. Tell the dealer from the beginning that you’re only willing to negotiate the final price, and that all charges and fees must be included.

Don’t Be Afraid To Ask For a Salesperson Swap

Buying a car can be a very personal and intimate experience, and if your salesperson makes you uneasy or if you feel like you’re being pressured, it’s OK to ask for a pinch hitter. Edmunds calls it “test driving your salesperson.” Just ask to speak to a sales manager, politely ask for a different representative, and your request will almost certainly be granted with no hard feelings.

Don’t Forget the Details

According to Edmunds, it’s easy to forget obscure but crucial details. This includes questions about things like new-vehicle rebates, warranty limits, add-ons that may be built into the price of the car, in-dealer service plans, financing offers and any caveats in the contract.

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Avoid Unnecessary Add-Ons

Your dealer will almost always try to upsell you with add-ons and options, some of which might make perfect sense — perhaps you do want to move up to alloy wheels or an upgraded sound system. Don’t, however, buy into extras that you don’t need or could get somewhere cheaper. Say no to things like window tints, fabric and rust protection, VIN etching, upgraded floor mats, wheel locks or door-edge guards.

Stick To Your Guns

Part of the battle is going in knowing what you want, what you don’t and what you’re willing to pay and on what terms. The other part of the battle is sticking to those parameters, not allowing yourself to be swayed and — if negotiations have hopelessly stalled — saying “no thank you” and walking away.

Be Fair

Finally, don’t confuse being firm with being unreasonable. Resist the urge to play hardball. Car salespeople get a bad rap, as do dealerships in general, but the majority are hardworking, honest brokers who trade on their reputations and work diligently to build customer loyalty. Like all businesses, they have to keep the lights on, pay the rent, make payroll and, yes, turn a profit. They can’t sell their vehicles at wholesale or invoice prices and they can’t give away the store to unreasonable buyers. If you’re reasonable and fair, it’s much more likely that they will be, too.

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