How to Negotiate the Best Deal on a New Car

What Every Auto Buyer Should Know (and What Salespeople Hope You Don’t)

So, you’ve made the decision to trade in that old, two-door sport coupe in exchange for something more suited for your current lifestyle of being a parent. You’ve done some research, talked to some friends, checked some websites and seen enough television ads to finally have a good idea of what you like.

Now, it’s time for the hard part, stepping into a dealership and negotiating a good deal.

Unfortunately, buying a car is unlike most other purchases you make because the price on the sticker is usually not the price you want to pay for the car. It’s not like buying a pack of gum or a kitchen appliance, where the price asked is the price you pay.

There are many other variables – such as options, trade-in allowances and extended warranties – that can alter the purchase price dramatically.

According to The Complete Car Cost Guide, published by Intellichoice, Inc., here are some basic rules of thumb to follow when shopping for a new vehicle:

Winter months are typically the best time to shop for a good car bargain because sales are generally slower than the rest of the year. Also, manufacturers try to clear their inventory to make room for the new models.

Late summer/early fall months can also be a good time to shop because current-year model sales have slowed and consumers are waiting for next year’s models to arrive in showrooms.

Be wary of the springtime when car sales are typically at their highest and dealers are less inclined to make price reductions when sales are up. If they don’t sell the vehicle to you, there will be another customer on the lot who will buy it.

Month ends are usually the best time to buy a vehicle because there are often monthly sales quotas that can mean big bonuses for a salesperson. Because of this, a salesperson is more likely to sacrifice a small part of his or her commission if it will help meet or break a monthly sales goal.

Do your research. Know what you want and how much you can afford to pay. Experts say that your annual income should be at least twice the price of the new car you are buying.

Just as when you purchase a house, it’s best to know your price range before picking out the vehicle that you want.

Be prepared. There are many publications and websites available that spell out the suggested retail prices and the dealer’s cost for the model and options you want. It’s also a good idea to keep track of when a manufacturer’s rebate is available on your chosen model – and don’t expect the dealer to tell you. It’s also a good idea to shop around with other dealerships for a price comparison. The more you know about the actual cost of a vehicle, the better prepared you will be during the negotiation process.

Negotiation Tips to Drive Down Price

Call ahead. Check with a number of dealers to find the one that has the exact vehicle that you want — complete with options and in the color you want – already on the lot.

That way you have a better chance of getting a good deal because the dealer won’t have to go out and trade with another dealer for the car you want.

Keep your cool. During the test drive, ask the salesperson to keep the chatter to a minimum in order to allow you to focus on driving the car. Check the vehicle’s handling on several surfaces, including freeways, residential and city streets.

If you fall in love with the vehicle during the test drive, don’t let the salesperson know. It’s easier to negotiate a deal if the salesperson doesn’t know that you’ve become emotionally attached to the vehicle.

Keep the three main parts of the deal separate. First negotiate the price of the car, then discuss financing, and finish up with discussing the value of your trade-in.

Salespeople are experts at giving something while taking away something else. For example, a salesperson may talk about monthly payments instead of the car’s price. By stretching out the length of a loan – with corresponding lower monthly payments – they can make an overpriced car appear to be more affordable.

By keeping the three parts of the deal separate, you stand a better chance of getting the best deal possible – without becoming totally confused in the process.

Be confident with your research and stand by it. Be prepared to do either of two things: Put down a deposit as soon as you’ve arrived at a fair price, or walk out if you feel you’re not getting a fair shake.

Let the dealer make a buck. “Profit” is not a dirty word. An automobile dealer won’t stay in business without it. But a dealer won’t stay in business without selling vehicles either. Just keep in mind that the dealer’s profit margin is negotiable. Drive down the dealer’s profit margin and keep more of your hard-earned cash in your bank.

Know thyself. You are at your most powerful place when you approach your negotiations with an auto dealer having knowledge of what you want and the price that you are willing to pay.

If you are looking for in-depth details about specific vehicles, a good place to start is with reference information provided here on this website and also by

Oh, and one more thing…good luck.

1 Comment Add your own

  • 1. Cecil  |  July 31, 2011 at 4:22 am

    Great Advise! I will be buying my first ever car…and it will be for my family (7-8 seater) what is the best family car for 2011?


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