If you’ve got your eye on a new or used car but you want to get a better price there are a number of effective strategies you can use. Negotiating a lower price at a dealership is possible and can save you a lot of money. Here’s a guide.
Making a Good Offer
Striking up a good rapport with a dealer is the first step. When you make an offer on the vehicle you should offer something low but not too low, since that can throw a wrench in the negotiations. If the dealer counter-offers something much higher than you’re willing to pay then politely decline and leave. Chances are they will come down more and call you in the near future.
Pay special attention to saving money on documentation fees, and other miscellaneous costs that the dealership charges. There are always ways for the dealer to make a profit and still give you a better price.¹
Don’t Trade In Your Old Vehicle
When negotiating for your new car, dealers will often suggest you trade in your old vehicle. This is generally not a good idea since you will usually get significantly less than its actually worth.
Instead of trading in your vehicle you should do your best to sell it instead. That way you can get a fair price for it and focus on negotiating fair and square for the new car without the extra hassle and confusion of trading in your old one.²
Time Your Follow-Up Right
If you’ve made an offer and the dealer hasn’t gotten back to you it’s a good idea to time your follow-up right. If you call or visit in the middle of a busy day then salespeople will be less motivated to give you a good deal.
Instead, choose a day with a snowstorm, heavy rain or other inclement weather. When the weather is lousy way less people usually go to places like car dealerships – after all, who wants to gawk around out in the rain on a lot? Use this time to do a follow-up. Chances are the dealership won’t be very busy and will be motivated to look what kind of deal it can give you.³
Watch Out for Offers That Are Too Good to Be True
If you get an offer that seems too good to be true you should be cautious. Make sure that the price you’re being quoted is the actual price you will pay and that there aren’t a bunch of other fees like the documentation fee that will massively hike the price. Make sure you really know what you’re paying before you sign on the dotted line.⁴
Shop Around Dealers
You should never limit yourself to one dealer. Instead, shop around and find the best offers. This also gives you a chance to see which dealerships are more open to negotiation. You can start by searching online but it’s also often a good idea to go in person and chat a bit with a salesperson as well as check out their stock.
Another advantage is that by knowing your options when it comes to other dealerships you give yourself more fallback options if one place doesn’t work out which increases your negotiating leverage.²
Know Your Stuff
One of the most important parts of negotiating well is to know your stuff. Learn about the process of buying a car and learn everything you can about the kind of vehicle you want to purchase. Know about its specifications and the industry reviews it is getting. Be very certain about your budget as well and firm in your limits so that you can negotiate from a place of certainty rather than ambivalence.¹