10 Tips On How To Negotiate With A Car Dealer

How To Negotiate With A Car Dealer

Negotiating with car dealers for a car purchase is better accomplished by extensive research on rebates, dealer invoice, holdbacks, and dealer incentives. Knowing how much a dealer paid for a certain car provides an estimate to what kind of offer might be accepted. Use online tools and make phone calls to dealers to obtain quotes for wanted cars.

Here are ten tips on how to negotiate with a car dealer to buy a used or new vehicle.

1. Get an estimate on the actual dealer cost. Determine the Manufacturers Suggested Retail Price (MSRP) based on the model and make of the car with online and book guides. Add any option packages to the dealer’s invoice as applicable. Check for manufacturers’ rebates based on advertisement for special discounts.

Furthermore, there are hidden bonuses provided by manufacturers to dealers called dealer incentives that should be noted. Review online sites with information on both hidden and advertised rebates to know the base car cost for the dealer. For example, holdbacks are a type of hidden rebates that manufacturers pay exclusively to dealers for every car sold.

Get an estimate on the dealer’s overall cost by checking the dealer invoice, advertising costs, delivery, rebate, hidden incentives, and holdback rate. Once the dealers true car cost is known, begin negotiating a new car price from home for the desired car.

2. Obtain online quotes to begin negotiating with used car dealers. Get quotes via e-mail to serve as negotiating start points. Become a dealership’s online customer and talk to an online sales representative. Get various quotes from local dealers to have an estimate on prices for a desired car. After the online quotes have been reviewed, negotiation should start.

3. Negotiate on the phone first for both used and new cars. Talk to sales agents over the phone to establish yourself as a potential customer and confirm the car quotes previously given. Mention any deals offered by competitors without mentioning specific dealer names to keep price confidentiality. Assure sales agents that you keep price information confidential to all parties to establish a trustworthy relationship with dealers. Once online quotes have been confirmed, make an appointment with a specific sales person at the local dealership.

4. Go to the dealer appointment to continue the negotiation. Upon arrival at the dealership, if approached by a sales agent, simply mention that you have an appointment with a specific agent to ensure that all negotiation continues from obtained quotes and phone conversations. After greeting the respective sales agent, re-verify the online quote and physically check the desired car at the dealer’s lot. Read the invoice sticker price to calculate any extra charges. The negotiation’s main purpose is to get the least acceptable settlement (LAS) from the dealer. Provide an offer based on the information obtained so far and wait for an answer.

5. Be patient, calm, and keep focus.  Be ready to provide a counteroffer to your first offer since dealers usually refuse the first offer made. Stick to your first offer if you consider that it’s a fair price. Keep focus on purchasing the car at the dealer’s LAS since dealers will try to obtain the maximum profit possible. Be patient since sales agents might need to consult several times with the sales manager for given offers.

6. Don’t get angry if the dealer takes a long time to accept an offer. Control the sale by being nice but firm. Buyers have total control of a car purchase in regards to signing a contract and being able to simply walk out. Base the negotiation on the bottom line that you are willing to pay for a car and stick to such line.

7. Dealers will employ many tactics while negotiating. Dealers want to get the highest profit possible from every single sell as mentioned above. However, buyers that have done extensive research can get savings in the thousands of dollars over a car purchase. As long as the dealer doesn’t lose money on the deal, buyers can get cars at a little over the dealer’s cost. If a purchase offer is not accepted, leave the dealership while still leaving a contact number in case they change their minds.

8. Avoid purchasing the following add ons:

  •  Paint sealant. Manufacturers provide this add on to most cars before being sent to dealers.
  • Undercoating. Similar to paint sealant add ons, manufacturers use many tools against corrosion and rust before shipping to dealers.
  • Dealer preparation fees. Factories usually pay the dealers to have a car ready to sell. Do not pay for this add on, as it should be included with the purchase.
  •  Extended warranty. An extended warranty is basically an insurance to cover the car once the manufacturer’s warranty runs out. Calculate the money that would be saved during the extended warranty term to know if it’s worth the cost.

9. Hold the car with a proper deposit.  Dealers ask for a hold deposit after an agreement has been reached. Pay for the hold deposit with a credit card and never use a check in case anything goes wrong. Credit card companies provide consumer protection and it’s much easier to get a deposit back if paid with a credit card over a check.

10. Know about replace-ability. As a further note, it is good to know that dealers based on replaceability do not lower some cars in price. It only applies to cars that are in high demand and short supply. Dealers don’t usually lower prices on these types of cars since profits are easily made on such vehicles.

Get Started Negotiating Now

How to negotiate a car purchase is a frequently asked question for consumers. There are many ways to negotiate for a desired car price purchase based on personal tastes and available income.

If research is done on the car’s LAS, a wide margin for negotiation can be set. Be certain to know how much you are willing to pay for a car to guarantee getting a better deal without paying more than originally planned. Follow this guide to buy the car of your dreams at a lower sticker price putting more extra cash in your pocket.

This article is provided courtesy of Auto Loan Experts, a consumer finance website providing information and tools on bad credit auto loans and other personal credit services.

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