How to make negotiating car prices less like pulling teeth

Buying a car should be a fun and joyful experience. Cars are a way to show your personality, make driving more enjoyable, keep your family safe, and try out the latest technology. There’s just one thing that mars the experience of buying a new car, and you know what it is — The need to negotiate prices with the dealer.

It’s a painful process, and for anyone who doesn’t understand the psychology of buying and selling (i.e. most of us!) it seems like we’re always going in unprepared. It’s easy to see why — Car salesmen exist to sell cars, by any means they can. At the same time, you want to get the best value for your money, and so the battle begins!

Fortunately, with so much information at our fingertips, the scales have tipped more in your favor. We’ll explore what you can do to help you negotiate the best price on a new car, all without you having to grit your teeth through the process.

Don’t go to the dealership before you have to

When you’re at the dealership, you’re at a disadvantage. Salesmen will use subtle (and not so subtle) psychological methods to get you to sign on the dotted line. That’s why you need to avoid going to any dealership for as long as possible. Instead, use these techniques:

1. Do your car research online

There’s a wealth of information on the cars you want online. You can check out the features you need, understand average pricing for the models, and find dealerships in your area. Read through reviews of the dealerships to find any warning signs (or positive things) said by previous customers.

When it comes to price, Edmunds, Kelly Blue Book, and TrueCar all have good estimates of the market value of a car — You can also download apps to your smartphone to help you out..

2. Start by emailing dealerships

Get a shortlist of the dealerships you’re interested in, create a checklist (see below) and send them an email. Explain the type of car and features you want and ask them to come back to you with a ballpark selling price for the car. If they refuse to do that, explain you are comparing prices between dealers, and if they want the chance to sell to you, they will need to provide a price. Insist on them emailing you a copy of the invoice for the car — More on this below.

3. Give dealerships a call

Next, give some dealerships a call and ask to speak to the internet manager. Explain the car and features you need and tell them you’re interested in their best price, and that you want to see the invoice for the car. Explain that you are calling a number of car showrooms to find a good deal and you’d like to offer them your business if they can meet your price. Make a note of the conversation and any prices offered and ask them what’s included in the pricing (e.g. servicing, financing, warranties etc.)

Create a checklist of the features you need

When you’re comparing car prices, you need to do it consistently. That’s why it’s important to have a checklist, so every dealership is quoting on the same thing. Your checklist should contain:

  • The make of the car you want
  • The additional features you want, separated into “must haves” and “nice to haves.”
  • Details of the warranty provided on the car.
  • Aftercare and services for the car — What’s included?
  • Financing options for the car.

Use this checklist in your emails, phone calls, and when you finally go to the dealership to make sure you are comparing apples with apples.

Test drive your car

Of course, you’ll want to test drive the car. This is often the point at which many salesmen will try and convince you to buy. There are a few ways around this:

  • If you can, test drive through a friend, if they have the model you want.
  • Make it abundantly clear to the salesman that you are not interested in buying the same day you test drive (and don’t back down on that!)
  • If you can, insist on test driving the car without the salesman present.
  • Never show interest in the car if the salesman is in the car with you — It makes it harder to say no.

Get a copy of the car invoice

Ask to see the invoice for the car. Some dealerships won’t provide it, but many will. The invoice shows the price the dealership paid for the car, so rather than negotiating down from the sticker price, you can negotiate up from the invoice price. It’s always the invoice price you should be basing your negotiations on.

Look into financing rates yourself (and secure financing if you find a good deal)

Talk to your bank or credit union to find out what rates they offer for car loans. Write down the rates and terms and compare / contrast with online financing and other offers. That way, when you go to the dealership and they offer you financing, you’ll know if it’s a good deal or not. A finance manager at a showroom will often try to sweeten the deal with financing, so having this information will put you a step ahead.

Have a price that you want them to come down to

Look at all of the features you need and use this together with the car invoice to find a price you’d be happy to pay. Make that your “walk away” figure — In other words, that’s what they have to offer to get you to buy, otherwise you’ll just walk away from the showroom. The car pricing websites mentioned above and the car invoice can help you decide on a fair price.

Always, always, always be straightforward and polite

Remember that the best way to approach a negotiation is to be polite — The salesman might want to get the best price, and you want to get the best value, but ultimately you want to buy a car and they want to sell it.

Good tactics to use include:

  • Being relaxed and confident — Don’t get flustered or stressed out by the situation — You’re the one in control. (Noone is forcing you to buy a car.)
  • Saying “I’m ready to buy as soon as you can come down to the price I want.”
  • Saying “Sorry, I can get a better deal than that elsewhere. Would you prefer me to go there?”
  • If you’ve already test driven the car say, “I don’t need to test drive the car or waste your time.”
  • Politely turning down counter offers. Let them know the price you want, give them your phone number, and leave. If they can meet your price, they will call!
  • Be ready to walk out if you can’t get the price you want.

Don’t show any emotion about the car

If you show too much emotion or interest in the car, the dealer will see that and capitalize on it. You want to take the “emotional sale” off the table. As much as possible, remain neutral to the idea of buying the car. Good tactics include:

  • “The car is for my wife, I told her if I don’t get a good deal, I’m not buying it.”
  • “I don’t need to buy the car now, I can come back in a couple of months.”

Follow up at the right time

There are some times of the day, week, or month when you should follow up. That’s because car dealerships often have to meet sales quotas and targets, so they may be even more keen to sell you a car at a good price. Try the following:

  • At the weekend just before closing time — A salesman might want to make one final sale for the week.
  • Towards the end of the month — Car manufacturers often provide big bonuses to dealerships who sell a certain amount of cars over the month.

Use the same approach with every car showroom

It’s important to use the same approach with everyone. Remember that as a customer you have the power and discretion to spend your money how you want. Be straightforward, tell the car dealership what you want, and let them do the work to get you the right price.

A checklist to help you with your next car price negotiation

Here’s a checklist that summarizes everything above:

  • Do your car research online.
  • Understand the “market price” of the car you want.
  • Make a list of all the features you would like.
  • Email dealerships and explain what you need; insist on seeing a copy of the car invoice.
  • Give dealerships a call and negotiate over the phone.
  • Create a checklist of everything you want about the car (including features, financing, warranties, servicing etc.)
  • Use the checklist whenever you speak with a dealership.
  • Test drive a friend’s car or without the salesman present.
  • Look into financing rates from your bank, credit union, or online.
  • Have a fixed price in mind, based on the invoice price and market price.
  • Always be polite and straightforward.
  • Don’t be afraid to walk away.
  • Don’t show any emotion about the car.
  • Follow up at the right time.
  • Use the same approach with every dealership.

Phew, that’s a lot to remember, is there a better way?

That’s what we thought too. In fact, it’s why we put together CarHagg in the first place. Just enter details of the car you want into our system and multiple dealers in your area compete with each other to give you the best deal possible. All without any negotiation needed from you.

We want to make car buying frustration free and effortless, so why not give us a try?

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One Comment

  1. Nice I need this for my friend thanks for big news

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