Tips on Negotiating the Best Price on a New Car

Posted by: Spencer // February 04 2010

Buying a new car can be very stressful. The relationship between buyer and dealer is as adversarial as it gets in retail. Buyers walk into a dealership thinking that they might be ripped off and dealers are skating on razor thin margins. The bad economy doesn’t make things easier on either party.

Getting the new car you want doesn’t have to be that hard. A few simple tips will help you get a good deal without putting you through too much pain in the process.

Do your research online. Before you ever contact a dealer, you should know what price you will pay for your new car. My favorite site for new car research is Edmunds.com. You can find both the invoice price (what the dealer paid for it) as well what others paid for the same vehicles. Make sure to find out what options and packages you might want in the car because you can price out the car to include their cost. Edmunds will even tell you what incentives are available. This is the most important part – NEVER purchase a car without doing your research.

Visit auto shows. Auto shows are great because they give you the opportunity to check out a lot of cars in the same location, all without the pressure of a salesperson breathing down your neck.

Talk to multiple dealers. A few years ago I purchased a car that was in short supply. The model I had decided upon was found at a dealer in another state. In the process, I received four different prices from four different dealers on that same car. Not every dealer will give you the same deal, so it pays to speak with a few of them for comparison.

Deal with dealers via email and phone. Most dealers have a staff that is responsible for Internet sales. You can work with the dealer on the phone or via email before wasting your time driving around town. If you find that the dealer doesn’t work this way, move on to the next one.

If possible, don’t focus on just one model. Keep your options open. The more models you’re open to purchasing, the better off you will be when it’s time to make the deal. Deals will vary from model to model – even within one manufacturer - so not settling on one model will give you more leverage with the dealers.

Close the deal at the end of the month. Dealers want to hit their monthly quotas, and incentives generally end at the end of the month. The odds are stacked in your favor on that last day of the month. If you’re ready to make the deal, and you’ve laid the proper groundwork, you’ll make the deal.

Start the process at the beginning of the month. You don’t want to rush the things. Negotiating is a time consuming process, especially if you’re dealing with more than dealer. Give yourself plenty of time and show the dealer that you’re in no rush to buy. Being able to walk away from the bargaining table gives you power.

If you’re trading a car, leave it at home. Never mix two deals. Make your deal on your new car and when you have that set the way you want it, make the deal on your trade. A dealer won’t give you more than your trade is worth, so if they are telling you they will, it’s just smoke and mirrors. If you try to make both deals at once, matters get confused and you give the dealer the upper hand. Once you’ve made the deal on the new car, the dealer won’t let the trade get in the way of making the deal.

One more thing – as I said at the beginning of this post, buying a car doesn’t have to be adversarial. Yes, you need to be steadfast and unwilling to make a deal that doesn’t make sense for you, but that doesn’t mean you have to be a jerk about it. Doing your homework ahead of time and being knowledgeable about the process will take away the need to hammer the dealer into making the deal.

Share your own tips in the comment section.

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