How To Negotiate With A Car Dealer

How To Negotiate With A Car Dealer

Something that a lot of people don't know how to do, or are afraid to do, is negotiate with a car dealer. It is actually easier than you think, and you can save yourself quite a bit of money in the process. You can master the skill in no time, and with little research.

If you are going to go out and look for a new car or a used car, you are going to have to deal with the 'salesman'. Their job is to make you feel good, and make you feel like you are making the right decision and getting the best deal. They will throw numbers at you, and judge what you will do by your facial expressions, your body language, what you say and even how you stand. The dealers do this job day in and day out, they are experts. So how do you win when it's your turn to negotiate a car deal?

The first thing you need to do, if you are trading in a car, is before you even go to the lot, research your car online, at sites like carsguide or drive, here you can enter all the specs of your car and find out what the recommended trade-in price should be. These sites will give you a range, say from $5,100 to $6,200, if your car is in good condition, you can expect to get around the middle of this range, so keep this in mind when you go car hunting. If you don't like arguing with people, but you still don't want to get ripped off on your trade-in value, then just blame the car site, i.e. tell the car dealer, 'Well the carsguide website and the drive website told me that I should get no less than $5,100.' this will put the car dealer in his place, and will test him out as to whether or not he can come up with a good excuse for offering you a lower price.

On the flip side of this, if you have the value of your trade-in set in your mind at say 10,000, and you go into the dealer and he says he will give you $12,000, don't be tricked! You can easily think, 'haha this sucker is going to give me more than what my car is worth!'. Most of the time if they are offering you more than what your car is worth, than they are making that money back elsewhere, usually by charging to much for the car you are going to buy!

You also have to research the values of the cars you are interested in, so you have an idea of what the dealership will charge, and should charge.

When you arrive, the dealers will do the whole sales spiel. Smile, nod, listen politely, but don't let any of it sink in. Just focus on the price you want, and the car you want. However if you are only interested in one particular model, don't let the salesmen know that. If they know you are stuck on one, they know you really want that one. Their job of persuading you is over, and they won't try and offer you bargains, or deals to entice you.

But say you are only interested in one model, there's still so many variants, there is the basic no frills one, there's the middle of the range one, then there's the top of the line one with all the extras and gadgets included.

Here's where some strategy comes in...

Test drive all three of the different variants. Then start the haggling process on the fully loaded, top of the line model. This is when it is the best time to pull out your existing car, ask them to see how much money you'd get for it as a trade-in, say that you want to see if you would get enough money for your car to make sure you can even afford this top of the line model, before you want to start talking about price. As the top of the line model is more expensive, and thus more profitable for the dealer to sell, they will be more willing to offer you more for your trade-in. Wait for them to come back with some numbers. Do all your dealing as if you are going to buy the top of the line model.

The numbers you want to get off the dealer are 1) the price of your trade in and 2) what they are offering on the price of the new fully-loaded top of the line model. Compare this price with the sticker on the car's window and see how much they took off the price, let's say its $2,000 off the price. Now here comes the good part! Tell the dealer that all sounds great and you'll accept the trade-in appraisal and the $2,000 off the price, but you think you might just go with the basic model instead, because you don't think you can afford the top of the line model.

Still don't accept their first offer when they go down to the basic model though. You always have to pretend like you are unsure, and you will be struggling with the price.

Never show that you are too interested in a car. Even if you have done all your research, know the exact price, and know car you want, you have to play the game, and get the best deal. Just remember, being smart and playing the game doesn't mean being rude or arrogant, this will turn any human being off, including salesman, so always be polite, but firm.

Common Mistakes People Make

Believing The Sticker Price Is The Best Deal
Car dealers jack this price up on purpose because they know customers will want to haggle.

Being Taken In By All The Deals Only Offered ON THAT DAY!
This is all nonsense, don't be pressured, the deal will still be there tomorrow or the next time you come in. Take these time limits with a grain of salt.

Buying All The Extras
Most of this stuff is a waste of money, and can be purchased a lot cheaper aftermarket. Such as window tint, alloys, stereo systems etc.

Not Sleeping On It
Always have a break, even if it's not a 'sleep'. Go around the corner for some lunch or a coffee without all the car salesmen hanging around you, and really think about the offer, and whether it is good enough for you.

My shortlist

You can shortlist products here & email them later.

No products currently shortlisted.


What are you looking for?

What type of account?

more options > Search Plan

Special offers

Find a mortgage broker

Enter your location to find a professional near you.

home > car loans > car loan guides & tips > how to negotiate with a car dealer