At NerdWallet, we stick to strict standards of editorial integrity to help you make decisions with confidence. Many or all the products featured listed here are from our partners. Here’s the way we earn money.
Just the term “negotiate” might make your stomach churn. But it’s less difficult because it seems, and some simple concepts can help you save lots of money whenever you purchase your next car.
Back in the day, most car-buying negotiations were done face-to-face, around the car dealership. Today, lots of people negotiate for any new car by requesting quotes via email. We highly recommend this different strategy. However, if you prefer to go old school and negotiate in person, read on.
Arm yourself with essential information on which to base your negotiations. Look up the current market price – what other buyers have taken care of the car – in pricing guides for example Edmunds or Kelley Blue Book. Current pricing information will give you confidence and show you through the negotiation.
Also, get preapproved for an auto loan even if you think you might choose dealership financing. Here’s why: At a dealership or independent used-car lot, you’ll be greeted by a salesperson who will probably ask, “What kind of monthly payment will fit into your budget?” Negotiating as a “monthly payment buyer” is a mistake because it obscures the cost of the vehicle. If you’re preapproved, you are able to instead politely tell the salesperson you will be paying cash and merely need to settle on the sale price of the car.
Making an opening offer
With the payment per month trap neatly avoided, you’re ready to open negotiations. There is a rule in negotiating that advises?”The first individual who speaks loses.” It means that when your opening offers are on the table, it sets the tone throughout the negotiation. So, ideally, you’d like the salesperson to help make the first offer, because it might be well below what you are ready to pay.
One method to prompt a dent offers are to state, “I’ve done some investigation by what other medication is spending money on this car. What kind of a price reduction are you offering?” If the salesperson won’t bite, the choice is yours to kick things off.
Look at the market value price and set your opening offer a great deal lower, but nonetheless within the ballpark of what the dealership might accept. If you know that the market value of the vehicle is $25,000, offer well below that, perhaps $23,000.
After delivering your opening offer, say anything – but watch the salesperson’s body language, tone of voice and facial expression. Salespeople may groan and complain and do all sorts of playacting; but when they take your offer for their manager, you’re probably running a business.
If the salesperson makes a counteroffer that’s close to the market value you present in your quest, you’re approaching a good deal. When the counteroffer is ridiculously high, you might want to just leave, since it’ll be tough going. But leave very slowly – this might prompt a better offer.
In a new-car dealership, once the salesperson takes your offer towards the manager, it is a game that may continue for a long time when you stew in a cramped sales office. If you think you’re being played, stop it immediately. Tell the salesperson your time is restricted and you need an answer immediately or else you will leave.
Reaching an agreement
Raise your opening offer by smaller and smaller increments. For example, if the market value price is $23,000 and your opening offer was $21,000, you might like to offer an additional $500, or a total of $21,500. However the the next time, bump it up only $250, then only $100.
As you near a contract, the salesperson might try to complicate the offer by offering extras like a free maintenance plan. The problem is, the need for these extras is hard to quantify, so you really don’t determine if one?has improved the offer. It’s easier to keep your deal easy and stick to only the cost of the car.
If you’re satisfied with the cost, don’t accept the offer until you review all of the numbers. Ask for a introduction to the fees or perhaps an out-the-door price, which will smoke out any other fees. You should be paying just the price of the vehicle, florida sales tax (in most states), a documentation fee and registry fees.
Inking the deal
The smiling salesperson is likely to jump up in the desk, extend a hand and say, “Congratulations, there exists a deal!” However, it’s essential to realize that everything to date is just verbal promises. Now you want to get your “good deal” in writing. That will take place in the finance and insurance (F&I) office.
The “F&I guy” will create the sales contract and provide you additional products for example extended warranties, additional alarm systems as well as paint protection. At this time, you can compare any financing offered by the dealership against?your preapproved loan terms.
Negotiating with a private-party seller
The flow of a car?negotiation having a private party is comparable but easier. The private-party seller isn’t a pro, such as the car salesperson, and, generally, you’re dealing with the choice maker, so there is no back-and-forth to clear the offer with the sales director.
Often, a private-party seller might arbitrarily select a price which has no regards to the car’s current market value. This will make it especially important to check on pricing guides beforehand. Then, once the negotiation begins, you can depersonalize your offer by saying, “Kelley Blue Book has it listed in a much lower price.”
When you make an offer that’s less than the “asking price,” it helps to justify the cost having a reason. For instance, you can say, “I only agreed to be taking a look at another car, and they were asking under you.” Or?”This is actually from my budget, but I would be willing to make an offer anyway.”
More negotiating tips
Ultimately, you’ll need to adapt your negotiating style for your personality. However, here are some more ideas to keep:
- Keep it light. Don’t make negotiating personal. Stick to numbers and facts.
- Avoid hairy-knuckle negotiators. Don’t even begin negotiating having a salesperson who tries to intimidate you.
- Don’t start until you’re ready. Avoid being led into negotiations at a dealership with invitations like, “Let’s go inside and take a look at some numbers.”
- Negotiate slowly and repeat the numbers. It’s easy to get confused, so jot down or repeat the numbers thrown to you.
- Be prepared to walk. This may be the classic advice for negotiating – but it is true. If you aren’t making progress, or else you can’t stand the way in which you’re receiving treatment, you’re ready to walk.
Updated Sept. 12, 2017.