Top 10 Tips for Negotiating a New Car Purchase

Top 10 Tips for Negotiating a New Car Purchase

1 - Do your research. Knowledge is very important when negotiating. Do research online, narrow down your choices and test drive cars in a low pressure environment. Ask to drive your friends’ cars or look for your short list of cars on car sharing marketplaces like If you do go to a dealership to test drive, make it very clear at the outset that you are early in the car buying process and are not ready to negotiate a price (always have another brand’s car in mind that you ‘still need to test drive’).

When you have finally settled on the make and model, you should be armed with some basic knowledge about trim levels, know what key features are offered with each trim level and what is important to you versus items you can live without.

2 - Know what others are paying. This is a critical step in the process. You must know what the market rates are before entering the dealership. Use online tools such as or to plug in some basic information about the car and your sip code to understand what others are paying for the same car in your area. Often times, it can be thousands less than MSRP.

3 – Look at the local inventory. Most car dealerships maintain their inventory on their websites. You can find available cars down to the color and trim that you are most interested in. Find 2-3 dealers in your area with the car you want, and call their sales department. Be very direct, and tell them you are a serious buyer and want to buy a specific car on their lot (reference the individual car on their website). Tell them what you are willing to pay, and specify that the amount is all inclusive except for sales tax. Odds are they will try to get you to come into the dealership to work on you; tell them that you do not have the time and you are speaking with another dealer (their competitor) later today. You need to put the pressure on them, this is often easier to do over the phone than in person.

4 - Leave emotions at the door and do not play the negotiation game. Hopefully you can verbally agree to the deal on the phone before physical going into a dealership, but if you find yourself in the dealership sales office without the deal finalized, you must remain calm. The sales person will bait you, act like your buddy, look for your emotions such as excitement or anxiety and try to exploit that. Remain stoic, even if it comes off as awkward and answer questions in concise ways as to show you are not interested in schmoozing.

5 - Get some help. If you feel that you can't keep your emotions in check, get someone to help you. There is strength in numbers. Additionally, you can use programs such as Costco's Auto Buying program (if you are a Costco member) which will "pre-negotiate" for you a lower price. Costco's member pricing is usually good - but just remember to check it against what others are paying (tip #2 above) to be sure.

6 - Be ready not to buy. This means be ready to walk out the door if the dealership or hang up the phone if the dealer cannot match your reasonable offer. Be courteous, but strong and mentally ready to delay the purchase until you get want you want. 

7 - Shop at the end of the month, quarter, or year. Car salesmen and even the dealerships they work for have sales quotas they need to meet to earn bonuses. You can use this to your advantage when purchasing a new car buy approaching dealerships 2-3 days before the of the month, or better yet end of a quarter or year. During the last day or two of a sales period, they may be more apt to selling the car at a lower price, so that they can make their quota for the month or quarter. 

8 - Don't give any reasons. Disengaging from negotiations is so important, here is another top similar to #4 above. The salesman may engage you in a way to get feedback about your decisions. Do not offer any reasons for your decisions. If you do, it becomes a tool for them to work on you. If you offer no reasons, they have nothing to use against you. You may think you are coming off as rude by not engaging in the small talk and giving reasons for your decisions, but you are not. You are just being serious about a purchase.

9 - Do not let them talk to you about monthly payment. Do not let the salesperson steer you to negotiate over the monthly payment. Again, come in with a price in your mind and ask them to match it. That's it. 

10 - Don't fall for the tricks. Salespeople are trained to close deals and in most cases are given the incentive to close them at the highest price. They will tell you "Oh, I need to check with the manager on that" and then make you wait for 30 minutes. This is a tactic. They will tell you that you that you are getting a great deal since its $1,000 less than MSRP - MSRP is a tactic. They will try to reason with you, be funny, be your friend, give advice.... these are all tactics used to separate more of your hard earned money. Do not fall for them! 

Bonus tip:

Have somewhere to be after the dealership visit. Make an appointment or meeting for about an hour after walking into the dealership. This will limit the time they can work on you, and will keep you honest about leaving by a certain time. (You may not want to plan a very important meeting in case you are a few minutes late while closing the deal, but something important enough to make you leave at a certain time). Let them know ahead of time, and again 10 minutes before you need to leave. When the time comes, simply get up and leave your phone number so that they can get back to you if they want to close the deal.  If your price is reasonable, they will likely call you back!