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Publish Date - December 31, 2018

Author: Dale Peterson

Categories:   Tips & Insights For Car Buying    Vehicle & Buying Research   

Negotiating With The Dealer

Negotiating With A Car Dealer

Car Dealer Negotiating Tips

To begin with, never buy a car on your first visit to the car dealer. Regardless of whether the car is new or used, the car dealer will try desperately to qualify you by asking questions like:

How much you want to spend?

What you want monthly payments to be?
What you want down payment to be?
The car dealer will try to make you feel commited by offering to appraise your trade-in value or by giving car prices. Don't be drawn into this dealer negotiating ploy.

A Preferred Placement loan (loan pre-approval) significantly strengthens your negotiating position with the dealer. Car loan pre-approval gives you the negotiating power of a cash buyer.

Car Dealer Negotiating Guidelines

Begin your car negotiating by offering five percent under the wholesale price directly to the sales manager or car dealer, and stay firm. Do not deal with car salespeople, deal directly with the car dealer. The trick is knowing the wholesale price before you begin negotiating with the car dealer. Knowledge is power, and you can use this power when negotiating with the car dealer.

Negotiating Price

Only negotiate based on the walk away price of the car you want, including all options. This keeps you from negotiating the small details and keeps the total payment in the open. Do not be tricked into negotiating on a car you don't want. Determine this "walk away" price using an online pricing source like to determine the invoice price (MSRP) and discover any rebates. Add the invoice price of the vehicle and options plus the destination charge, any title or license plate transfer fees and local taxes. Be sure to subtract any customer or dealer rebates. That is the price you are negotiating for, but in reality you should expect to pay a little more. If the car dealer didn't make any profit, he wouldn't stay in business.

When negotiating with the dealer, take into account the vehicle's market demand. A car that is in less demand has a wider range of negotiation than a top selling car. Dealers get little or no rebate on these top selling cars. Factor in this demand, and you can make a fair offer to begin negotiating.

Negotiating on a used car takes other price factors into consideration. Dealers pay used car wholesale price "blue book value" when they buy a car from a dealer or a customer as a trade-in. Dealers typically ask "blue book value" retail price when they sell the same car. You should be negotiating with the dealer for a price somewhere between these two prices.

Factors you should consider when negotiating a car price with the dealer include the car's condition, mileage, options, and location. These factors, coupled with the "blue book value" you can find here at, are a great start for negotiating with the dealer.

Selling a auto privately is probably the best way to get top dollar. But this also usually involves the most time and effort.

Begin Negotiating With the Car Dealer

Begin negotiating with the car dealer by assuming any advertised price is negotiable. Negotiating to buy a used car can be less complicated than negotiations on a new car. If you're negotiating with an auto dealer directly, there's no salesman to add on extra-cost items and frivolous, non-obvious charges.

When negotiating, say as little as possible for as long as possible. Start negotiating with the dealer by making a realistic but low offer. If you've found problems with the car, you might start negotiating by itemizing these. If a mechanic inspected the car and found things that need to be repaired, you can use these problems when negotiating. List what you think it will cost to fix the car, but be polite and reasonable. Once you make your offer, don't say anything until the dealer you're negotiating with responds. Whatever counteroffer the dealer makes, politely reply that your original offer is all you're prepared to pay today. Do not say anything else.

Negotiating With the Car Dealer: Close the Deal

If you must negotiate upward, do so in small amounts. If the gap between the your price and the dealer's price is a thousand or less, negotiate upward by hundred dollar increments. Once you've negotiated close to your target price, make it clear to the dealer that you are almost finished negotiating. When you have reached your final offer, say no more and stand firm. Tell the dealer that is your absolute, final offer, and good for the next 24 hours only. If the dealer declines, don't be afraid to walk away. If your negotiations with the dealer were successful, you'll have your new car, if not, the price was more than you want to pay anyway.