How To Negotiate a Car Sale Price

When we’re shopping for a new car or truck, it can be tempting to just accept the first deal presented to us by the dealership.

After all, it’s not easy to compare prices between dealerships and you can end up spending hours trying to haggle with salespeople who don’t want to budge on their original offer.

Different Cars

Read also:

But if you know how to negotiate effectively, there’s no reason why you should pay more than necessary for your next vehicle purchase. Here are 10 tips that will help you get the best price possible when negotiating with a dealer:

#1. Research the Current Market

The first step you need to take when negotiating a car sale price is to do some research. You should know what the market for your car is like so that you can determine the value of your car based on its make and model.

Researching the market. Some research can be done online, like at Kelley Blue Book or Edmunds.com; other research requires going outside of your home, like visiting local dealerships to get an idea of how much they're selling similar cars for or speaking with friends who have recently bought or sold cars themselves.

Getting a sense of what the market is like. Once this step has been completed and researched, it's time to gather all relevant information as well as quantify any potential deal-breaking factors (such as extensive damage) that could affect how much money someone would be willing to pay for a vehicle.

#2. Set a Target Price Before You Shop

You should know what you want to spend before you start shopping, but that’s not all there is to it.

also need to know what the current market value of your desired car is (and how much the dealer paid for your vehicle) and compare that against other cars in your area. This will give you a good idea of how much money is at stake here.

Once you’ve done some research on prices and found out what similar cars are selling for online, head over to a local dealership and start talking numbers with them.

#3. Find the Best Deals by Searching Inventory

If you're looking for a specific make and model, start your search on the website of a dealership.

Not all dealerships have an online inventory listing, but many do. You can also use a car price comparison tool like Edmunds or KBB to find out what that particular car is going for in your area.

Once you've found the best deal on a certain model, start searching local used cars for sale in your area on Craigslist or Autotrader.com (which also has an app). I

f you see something interesting and want to learn more about it before contacting the seller directly, check out their recent history with eBay Motors (it's free).

Know the Right Car Price

#4. Know What the Dealer Paid for Your Desired Car

The invoice price is the price that the dealer paid for that car, so you can use this information to negotiate a lower price.

To find out the invoice price, you will need to ask your salesperson or look up the vehicle on CarFax or another site such as Edmunds and take note of its MSRP (manufacturer's suggested retail price).

The invoice price is also sometimes called “dealer cost” or “retail cost.” Often, local dealerships have several different prices for each model and trim level based on any number of factors including how much markup they want to add to their cars.

#5. Collect and Use Your Power Information

As you walk into the dealership, you should have a good idea of how much your vehicle is worth.

Check the Kelly Blue Book and Edmunds pricing guides to see what similar vehicles in your area are selling for.

You can also check eBay Motors for recent sales, which may provide more accurate values for higher-end vehicles.

While you're at it, check out your trade-in value too. If there's no chance of selling it privately and selling it back to a dealer is prohibitively expensive (usually an issue if you live in an area where there's no tax advantage).

Consider trading in that car against another one when buying new instead of paying cash or financing the whole transaction.

Once you know what your car is worth as well as our trade-in options, you need information on what dealerships pay when they buy used cars from customers.

The average profit margin nationwide tends to hover around 10% but varies widely depending on factors like local market conditions.

Read also:

#6. Get a Firm Quote on Your Trade-In and Out the Door

Now that you know how to negotiate the car sale price, it's time to go shopping. If you're in the market for a new vehicle and want to use your current car as part of the deal, here are a few tips on how to get the most value out of it:

Get a firm quote on your trade-in and out the door. Before you even step foot into a dealership showroom, have an idea of what your trade-in is worth by speaking with multiple local dealerships using the CarFinder tool or by visiting an Edmunds showroom. Don't just take one dealer's word for it; know what others are offering before going into the discussion.
Don't be afraid to walk away if they don't offer enough money for your trade-in vehicle. Remember that there are plenty more cars out there (and plenty more dealers), so feel free to walk away from any dealership who doesn't offer fair value upfront -- you'll find another one soon enough.

#7. Create Urgency and Time Constraints While Negotiating

You can create urgency and time constraints by telling the dealer you want to look at other dealerships or getting another quote. You could also say that you are going to be back in town next week and would like to buy then.

You should also state things like “since I am only here for one day” or “I will have my wife come over tomorrow morning if we can't agree today” as this will create a sense of urgency because now it seems like there is no time left for them if an agreement isn't reached today.

#8. Use Email to Put Pressure on Dealers (If Necessary)

There are some last-ditch tactics you can employ with dealers who aren't budging on the price. One such tactic is sending them an email stating that you'll be forced to take your business elsewhere if they don't lower the price.

This tactic works best when you have a competing offer from another dealership and don't mind backing out of your original deal with one dealer so that you can make a better deal with another.

However, it's important not to be too aggressive in this approach because it could cause tension between yourself and the dealer before negotiations have even begun.

Be sure to keep things cordial throughout all correspondence with them until they ultimately agree upon terms that are acceptable for both parties involved in the transaction (you and them).

Car Documents

#9. Ask About Documentation Fees They Might Charge

You can also ask about documentation fees. This is another common profit center for dealers and one you'll want to be aware of.

Documentation fees typically range from $100 to $1,000, but the amount can vary widely depending on the dealership and your state's laws.

In most cases, these fees are non-negotiable; however, there are exceptions that require a bit more negotiating power on your part. For instance:

If you finance through the dealer rather than outside sources like banks or credit unions (which we do not recommend), they might waive certain documentation fees altogether or lower them significantly.
In some cases where an employee buys their car from the dealership and uses it as a company vehicle (that would be me!), they may waver on documentations charges because technically it's still considered a business transaction in this case.

#10. Don’t Be Afraid to Walk Away From a Bad Deal

The last tip is the one that will help you get the most out of negotiation. Don’t be afraid to walk away from a bad deal. If you don’t get the deal you want, walk away and come back another day.

There are plenty of cars for sale!. If they know they can make more money on another sale, they may just meet your price. And if not, ask for a better deal and see what happens.

Conclusion

Remember: the dealer is only in business to make money. That means it’s not uncommon for dealers to try to sell cars at above MSRP and charge you for extra fees and documentation charges. They are hoping that your desire for a new car will override your common sense. But by following our tips above, you’ll be able to negotiate a fair price on any car purchase and keep more money in your pocket.

Relevant Content:

Manage Money Guide

Search This Blog