How to Negotiate With Dealers

Successfully negotiating with a dealership can save you thousands of dollars on your next new or used vehicle. Completing some preliminary research before contacting or visiting a dealership can help put the ball in your court during negotiations. Before visiting a car dealership, you should know the models you are considering, the necessary options and the maximum amount you are wiling to pay. Knowing this information can help you negotiate a great price and, in turn, a lower monthly payment on your next car.

Instructions

1

Contact a dealership. Once you determine the vehicles you are looking for and calculate a target price relative to the dealership's invoice amount (i.e., the amount the dealership pays for the car), you may contact a dealership. The invoice price may be calculated by using the new car pricing information available on Edmunds.com (see link in Resources). Edmunds also offers True Market Values that approximate transaction prices on new cars in your area. While many prospects first contact dealerships via the Internet, calling or visiting a dealership and asking to speak to the sales manager can also prove valuable if you need to complete a test drive.

2

Review their first offer. After completing a test drive, it is time to talk figures with the salesperson. If you contacted the dealership via the Internet, the Internet sales manager may have already provided some upfront pricing, and you have probably asked some questions about the initial quote. However you receive the dealership's first quote, review it carefully. Make sure that the quote does not assume employee pricing if you are not eligible. Ask the dealership for an itemized breakdown of the vehicle price, including the pre-tax selling price, documentation fee, registration fee and taxes. This will allow you to compare the pre-tax selling price with your target price, which should be set at or near the invoice price. If their offer is fair and falls within your range, push forward with the paperwork.

3

Make an educated counteroffer. If the offer is more than you are willing to pay, make a smart counteroffer. This would be a good time to make a pre-tax offer that is at or near the invoice price. The salesperson may try to "bump" you to agree to a higher amount, but just say no. After a few unsuccessful attempts, the salesperson will go back to his manager with your offer.

4

Continue negotiating. Once negotiating begins in earnest, you may spend more time alone in the sales office than you do with the salesperson. She may have to speak to her manager on several occasions. You can leverage this wasted time to increase the pace of negotiations. Let the salesperson know that you only have 30 minutes to agree on price, or you will leave the dealership. This should get you an honest answer more quickly.

5

Close the deal. If you can reach an agreement with the dealership, sign the negotiating worksheet and complete your title and financing paperwork, if applicable. If a dealership is not willing to offer your target price, contact more local dealerships to see if they will accept your offer. Once you get a gauge for market conditions, you may need to adjust your offer upward.