How to Negotiate When Buying a Car

How to Negotiate When Buying a Car

Do you know what really happens in your home when you are away? Now you can.

Watch more How to Buy a Car videos:

Step 1: Determine the amount
Question your credit union about a loan before talking to a dealer to compare rates. Find out how much cash your credit union will approve. This helps you limit the price range of cars you look at and test drive.

Step 2: Research invoice price
Go online to research the invoice price — the amount the dealer pays the manufacturer — before starting negotiations. While you’re at it, check out any rebate information and hidden incentives for the dealer. You gain the advantage by doing your homework.

The minimum dealer profit is usually around 3 percent.

Step 3: Examine four-square numbers
Don’t be fooled by the dealer’s four-square information — a worksheet the dealer will present you with when you sit down to negotiate that maps out purchase price, down payment, monthly payment, and trade-in value. Doing your own math prevents them from fudging numbers. Determine the interest rate and loan term before you arrive at the dealership to accurately project your monthly payments.

Step 4: Know what monthly payment means
Resist negotiating based on monthly payments alone, without contemplating the swelling interest rate or stretched loan term. Monthly payment results from the down payment, loan term, and interest rate.

Step 5: Play the game
Play the game as well as they do. Be surprised that they can’t give you a better offer, even if the terms and price are reasonable, just to see if you can move them. They want to create pressure to close you now, but you have time that they don’t — use it.

Don’t tell one dealer what another’s quote was. You need their respect — demonstrate that you deserve it.

Step 6: Drive the bargain
Tell the salesperson you will discuss an acceptable trade-in price for your old car, but first must have a satisfactory price on the new car. Drive the bargain when negotiating, impressing upon them you can sell it yourself for more than they’ll pay you.

Step 7: Prepare to walk
Prepare to walk out if you are not handled respectfully or the price is too outrageous. In fact, with some due diligence, cut to the chase and play hardball — tell the dealer your price and expect a yes or no.

Step 8: Expect fees
Expect an onslaught of fees and extras just when you think you’re done. Some fees are unavoidable, but many can be easily bargained down or avoided. Virtually all extras are unnecessary and overpriced. Throughout the negotiation process, use your knowledge and the research you’ve done to get the best deal.

Did You Know?
Preston Tucker started a new car company on the back of his 1948 Tucker model. This company manufactured just 51 cars before failing in 1949.


  1. #5 should be removed IMO. You should ALWAYS tell the salesperson what another dealership is quoting you on the exact same vehicle. It creates competition and forces them to lower their price on the vehicle.

  2. go online find the closest person selling a vw (mainly golfs) inspect the car pay cash, you are done. NEVER buy brand new cars

  3. Just convince the fucker that you're smarter than him and well known then he won't try any trixs trust me if you caught him trixing with numbers ask to speak with another salesman it will break him! 

  4. This is the best advise I have seen. This guy is correct. The key to buying a new car at a great price is preparation. With the proper research, a car buyer will have the advantage over any car sales person. There are many reasons a person sells cars. One of those is because that is the best job they can get. Car sales people are rarely smarter than a well informed buyer.

    When I buy I contact dealers via the Internet to feel them out. I research the dealers on line reputation. I want to determine which dealers seem to be the most ethical. I always ask for a price. Any dealer who does not provide a price is off my list. If they will not provide a price, they are likely a dealer best avoided.

    I select a dealer to visit. I keep the other favorable dealers in mind should my selected dealer turn out badly. Immediately I tell the sales person my price. Since my price is reasonable they rarely argue. I base my price on invoice less dealer holdback less all incentives and plus a 3-5% profit.

    Invariably, the sales person will turn me over to the sales manager. This avoids all the silly games sales people like to use. Fact is, most sales people are not equipped to deal with a knowledgable buyer.

    When buying a car, the buyer will never get the dealer's best price unless the sales manager is involved. So why waste time with the sales person. Only negotiate up from your number. If you reach an agreement great, everyone is happy. If you do not just walk away, there is always another dealer with the same vehicle.

    On final bit of experience, that friendly F&I person is just a sales person. His or her job is to get a buyer to pay huge money for a plethora of overpriced items which are essentially useless and which can usually be purchased elsewhere for a lot less money. Just say NO. However, do let the dealer try to beat whatever financing you got on you own. They may beat it. Remember, that F&I person is always a dealer's best sales person, always. 

  5. You all think that you work harder for your money than salespeople do!! You spend more money in groceries than you do a car and you don't negotiate with walmart do you? Didn't think so!

  6. Preparing yourself before going to buy a car is one of the best things you can do. Car salesmen will be happy to help you along and the transaction will go much easier when you’ve already done the research beforehand. 

  7. As a car salesman I wish customers did this. I'm more than happy to sell a car at invoice. Easier it is for the customer easier it is for me. I make plenty of money in volume bonuses I do not need to make money on the car itself. I learned a long time ago you don't make money fighting a customer. You make it in volume. Sad part is so many old school idiots still selling cars make us all look bad. 

  8. Negotiating is dead in dealerships. Dealerships post "Best Price" now in hopes of competing with internet sales.

  9. Everyone wants clean retail for their trade and wholesale for the car they want to buy.  3% is not an average profit for a  manufacturer.  The only manufacturers that make 3% are the big 3, most others make 1-2%.  Almost no one uses 4 squares anymore.  There is no problem telling one dealer what the other offered you, either they can beat it or they can't, it cuts out a lot of the "hassle" of negotiation.  The only time you shouldn't need to discuss prices is when you are cross shopping brands, that is pointless.  The only time you need to check about interest rates is when you are buying a used car.  No bank (you walk in to) will ever offer you 0%, .9% or even 1.9% on a new car.  Dealerships get sub-vented rates that you couldn't ever get.  Oh and just remember, the salesman sitting across from you is making $50-100 for that brand new car that you just bought.

  10. I hope these advice help me. I plan on going tomorrow to a dealership, who offered to buy my car and pay off the  balance. its upside down. 8k loan remaining, cars worth 4-5k if traded in. But its work 7-8k sold myself. So I am well aware that I can sell it myself. My hope is that they pay off in full, no negative equity added and they offer me the same car, but newer model year. I also know that the same brand dealer offers the model i want for 1-2k lower so i want that to match! I won't trade in my car unless they make it even where i pay the same as i am know. any advice?

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