How to Haggle for a New Car

You can save hundreds to thousands of dollars by haggling for a new car. The price on the sticker always leaves room for negotiation. Besides haggling, there are other ways to save money on a new car. Purchasing a black or white colored vehicle, compared to a metallic or other colored cars, will often be cheaper. Comparing insurance costs for one vehicle over another can save you money in the long run too.

Instructions

1

Get dealer price information. Know the invoice price, the dealer holdback and the rebate amounts. Dealers will mark up the invoice price by two to three percent. Dealer holdback is a percentage of the manufacturer's suggested retail price (MSRP) or invoice that the car maker will pay the dealer after the vehicle is sold. When a dealer claims he can't go any lower on the price, catching him off guard with the holdback and rebate amount will help in negotiations. Visit the price guide at the National Automobile Dealers Association (NADA.com) for information on exact invoice price and holdback and rebate amounts.

2

Do comparison research. Negotiating the sticker price is more effective when you can show that a like make and model is going for less elsewhere. NADA.com and Kelly Blue Book (KBB.com) are good sources on true market value for a new car.

3

Walk out if you can't get the salesman to lower the price to your liking. If the salesman realizes that you are prepared to take your business elsewhere, it is very likely that he will agree to the lower price.

4

Avoid the "up trick." According to tips and tricks in Confessions of a Car Salesman, salesman will bump the price up. If you say, you are looking to pay $300 a month, they will try to get you comfortable with a slightly higher payment. The same tactic is used with total sales price and down payment amounts. If you can afford $300, state that you need a payment of $200 to $250 a month.

5

Know the finance trick. According to Confessions of a Car Salesman, when financing a car, the dealer tries to get a $3,000 down payment and at least $200 a month for every $10,000. So, on a $20,000 car, the consumer will typically put down $6,000 and pay $400 a month with a high interest rate. Further, the dealer plays phone tag with the finance company, pretending to negotiate a deal for you. Avoid this by sticking to your guns about how much you are willing to put down, pay per month, and the interest rate you are willing to accept. You can also get preapproved at your bank before going to the dealership.

6

Be patient. Car dealers will negotiate down in increments, using your impatience against you. If the asking price is $25,000, and you want it for $22,500, be prepared to negotiate down in $500 increments.

7

Avoid options. Don't let the salesperson hike up the price with cosmetic and electronic options. You can usually purchase these options cheaper outside of the dealership. For example, getting a CD changer from the dealership can cost you two to three times as much as from a regular retailer.

8

Have your own insurance. Dealers get paid from insurance companies to sell policies to uninsured customers. You should compare insurance rates for a particular vehicle with several different insurance companies before settling on one. Do this before going to the dealership. If the insurance quote offered by the dealer is comparable or cheaper, accept it. If not, get your own coverage. Many policies will cover a new car purchased by the policyholder for a certain time period before it is actually added to the policy. Check with your insurance company to see if you will be covered driving out of the dealership.