Unless you're at a dealership that offers no-haggle pricing, you'll need to play the negotiation game if you want a great deal on a new or used car. Haggling for car prices can seem rather intimidating, but the following tips can help you brush up on your negotiation skills and get the car you want at the right price.
Find Out What It's Worth
It's hard to make an offer for a new car without knowing its true value beforehand. Before the negotiations begin, you'll want to find out what others have paid for the same type of vehicle. You can find this information on online comparison websites that collect purchasing data from new and used car buyers.
You should also keep the vehicle's MSRP in mind when haggling for a fair price. This will give you a decent frame of reference to use while searching for a great deal.
Cast a Wider Net
Instead of sticking with just one dealer, you're better off shopping around multiple car dealerships for the new or used car you want. It's a good way of finding out just how close to their bottom line they are, plus you'll have an expanded selection of vehicles to choose from. If you want to save your shoes some wear and tear, you can comparison shop online by pulling price quotes online from the dealer's own website or through a comparison website that offers those results at one convenient location.
Don't mention anything about monthly payments, trade-ins or financing options just yet. You're only looking at the vehicle's sale price at this point, including taxes and fees.
Bring Your Own Financing
Speaking of financing, bringing your own financing to the negotiating table will give you the upper hand, in many cases. Your bank or credit union will likely offer a lower interest rate than what you might get from a dealer-arranged financing deal.
Having your own financing in hand may also incentivize the dealer into beating the bank's rates through lower rates or more generous financing terms. Some dealers may even offer bigger discounts for financing in-house.
Take Advantage of Discounts
Good discounts aren't hard to find, especially if you happen to be a military veteran, college student, or a member of a fraternity, sorority, or auto club. Many dealerships offer discounts and sales incentives to customers belonging to certain organizations. Taking advantage of these discounts can help improve your negotiating power and knock a significant amount off the asking price of your new or used vehicle.
Don't forget about "cash on the hood" incentives that are regularly offered by the automakers themselves on top of any discounts the dealers offer. These incentives are usually offered to brand-loyal buyers, employees affiliated with the automaker, and buyers moving from one brand to another.
Don't Focus Solely on Monthly Payments
Negotiating based on the monthly cost of a vehicle can be a disaster waiting to happen. Focusing solely on monthly payments hides the actual cost of the car. In the end, you could be left with a vehicle that actually costs more than it's worth.
Skip the Add-Ons
Rust protection, pinstriping, and window etching are common features added to nearly every vehicle. These features also tend to be costly, and most shoppers wind up paying for them without asking. Don't be afraid to say no to these add-ons, even if they're already included in the contract. Most dealers will cave and remove the charge to save a sale.
Don't Be Afraid to Walk Away
You shouldn't let yourself feel pressured into signing on the dotted line. If you're not satisfied with the deal you're getting from the dealer, you can always walk away and shop elsewhere. In most cases, the dealer will contact you again with a better offer.