How to Negotiate a Better Price On Your Auto Loan

Negotiating an auto loan can be difficult. You’re going toe-to-toe with veteran salespeople whose job it is to make you pay as much as possible. Knowledge is your best weapon here.

Awareness of their tactics and tricks. An understanding of the market for the vehicle you want to purchase. General knowledge of your purchasing power and your options for acquiring financing.

Let's talk about that.

Do Your Research

Before you even set foot in a dealership, you’re going to want to spend some time on Google. There are two things you should look into. The first is the actual vehicle purchase.

You’ll want to know the exact make and market value of the vehicle you want to purchase, both new and used. You should also have an idea of the incentives you qualify for, which may include rebates or low-interest financing. If you’re trading in a vehicle as part of your purchase, you’ll also want to know the exact value of that car, along with any other fees or taxes that might be part of the transaction.

The second involves dealerships. Shop around a bit. Call dealers throughout your city and figure out which one offers the best price. That way, when you get to the in-person negotiation stage, you can use that knowledge to your advantage, and potentially get a better offer than if you went to a single dealership.

Remain Firm On What You Want

As noted by Consumer Reports, before you begin negotiating with a salesperson you should make a point of setting a few ground rules. Make it clear to them that you’ve done extensive research on your car, and that you know what type of vehicle you want and what options it should include.

Moreover, inform them that you have a set amount you’re prepared to pay and that if they are unwilling to match it, you’re willing to go elsewhere.

From there, you can start negotiations with an initial low offer. Haggle with the dealer until you reach a price, you’re both satisfied with.  Don’t fall for any of the common tricks the dealer may employ, such as claiming the vehicle cannot be purchased at the price you desire, trying to make a ‘take it or leave it’ offer, or claiming you don’t qualify for certain incentives.

Be Dismissive

During negotiations with your dealer, put on your best poker face. Act unenthusiastic, or even bored, with the salesperson’s pitches. Take the time to occasionally walk around the dealership and let your eyes wander. Every now and then, excuse yourself to go grab something from your car or go to the washroom.

The key here is to put the salesperson on their back foot. If they call your bluff, be prepared to follow through and go to a different dealership. And perhaps most importantly, pay attention to how the dealer is conducting themselves.

A good salesperson will attempt to relate to you. They’ll use physical contact, personal anecdotes, and body language to put you at ease and make it seem like they’re your friend. This is a tactic, and if you fall for it, you may as well disregard all the advice I’ve outlined thus far.

Alternatively, Just Go To The Bank Or Finance Online

I’ve saved the best for last. If your credit is strong enough, you can actually skip the auto dealership’s in-house financing altogether. Once you’ve nailed down a sticker price at the dealer, take the documents with you to the bank.

Generally speaking, this will give you more favorable terms and a better payment plan. You don’t necessarily even need to specifically acquire an auto loan. Any financing plan will do; some banks even provide additional terms such as credit insurance.

Drive A Hard Bargain

Know what you want to purchase and why. Recognize the tactics dealers will use to manipulate you. Be prepared to walk away from the deal at any point and understand that even once you have the financing documents in hand, you don’t need to finalize them immediately.

When it comes to acquiring an auto loan, you have a great deal more power than you realize, and now you know how to leverage it.