How to Successfully Negotiate a Car Deal
Many people absolutely hate the process of buying a car — because they feel they don’t know how to skillfully negotiate with experienced dealers sales people.
The key to successful negotiating is doing the following five things that put you in control, not the sales person.
1. Know Your Numbers
Whether you are buying a brand new car or a previously owned car, you should know prices before beginning your buying process. Don’t wait and let dealers or sellers educate you about prices, at their own advantage.
If buying a brand new vehicle, research prices at web sites such as Truecar, Edmunds, and CarsDirect. Many such web sites show you what other people are paying for the vehicle you want. Almost nobody pays full MSRP sticker price for a new car. By knowing what others are paying, you have a good idea of what price you should be negotiating with a dealer.
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If buying a used vehicle, you can check values on web sites such as Kelley Blue Book (kbb.com) and NADAguides (nadaguides.com). Understand that these are simply educated valuations based on current regional market conditions. Prices in your area could vary considerably. Dealers and sellers commonly mark up prices on used cars by at least 10% over the price they are willing to accept — to allow room for buyer haggling.
It’s always a good idea to check the Carfax vehicle history report on a vehicle you think you want to buy. Also have a professional mechanic look over the vehicle. Any problems in the history report or the mechanic’s inspection can be used in helping negotiate a better price, assuming you still want the car after learning of its faults.
2. Use the Telephone
You should research new cars online, both on manufacturers’ web sites and on independent sites such as those of Consumer Reports and JD Power. Car enthusiast forums are also a valuable source of real owner information. Furthermore, you should test drive any cars you think you might want, but leave your checkbook at home.
Once you’ve decided on the car you want, call at least a couple of dealers’s “Internet Sales Department” and discuss availability of that car and prices. Tell them that you are shopping at multiple dealers and are looking for the best deal, without annoying and time-wasting haggling. Work out all details over the phone so that the only thing left to do is to go down to the dealer to sign papers, hand over money, and drive away in your car.
3. Be in Control
Dealers want you in their office, where they have control of the buying situation. Even if you attempt to negotiate a deal over the phone, some dealers will insist that you come to the store to work out the deal. This requires that you take countermeasures to put more control in your corner. Otherwise, dealers will play their usual games, which are all intended to keep you under their thumb.
One of the most important tools you have is to disrupt their typical back-and-forth haggling process. Knowing the price you want to pay (from Tip #1 above), tell them you want their best price offer and that you don’t have the time or patience to play their games. If they ask what price you want, refuse for this first step. The sales person will have to go visit his sales manager to get a price. While he’s gone, get up from your chair and walk around, step outside, or otherwise appear to be confident that he’s coming back with a good price.
When the sales person returns and finds you, his price will almost never be the price you intend to pay. This is the time to disclose your price. Tell him (or her) that this is your “take it or leave it price” and that he or she gets only one chance going back to the sales manager for approval. Let them know that the haggling is over and that if the price that comes back is not your price, to the penny, there is no deal — and mean it.
4. Be Impatient and Create Distractions
If the dealer salesperson begins to spend too much time playing their games, it’s time for you to take back control. Have someone with you (such as a spouse or friend) who takes a cue from you to begin advising you that they don’t like the car or the deal, or remind you that you have an appointment and need to leave soon. Show signs that you are getting impatient and losing interest. Fidget and keep looking at your watch or phone. Get up and speak from a standing position. Make the sales person feel they are losing the deal.
5. Be Prepared to Walk Out
Your most powerful negotiating technique when buying a new car is . . . . . your ability to get up and walk out the door of the dealership. If you don’t get the deal you want, you must be willing to simply walk away. If you are unwilling or incapable of doing this, everything else you’ve done has been for nothing.
When you walk away, it puts you in control. If the dealer has a better offer, he’ll come running after you or call you soon. If not, you can assume that his last offer is the best he can do. You can then decide if you are willing to compromise and accept the offer, or stick to your guns and try elsewhere.
One Final Piece of Advice
Never, ever, let a dealer sales person know that you can’t live without the car you are negotiating over. Never acknowledge that you “just love” the car or that it’s anything more than something that will get you from Point A to Point B. By revealing your true emotions, you lose nearly all of your negotiating power.