AutoInsurance.com
January 17, 2023

What Not to Do When Negotiating Car Prices

The best practices for negotiating the price of the car you want

When my husband and I were shopping for a minivan to accommodate our expanding family, we researched which models would be best for safety and our budget. With financing through our credit union, we negotiated the final price for a Kia Sedona, which would be delivered from an out-of-state dealer.

However, when we arrived with our three children to complete the sale, the salesman informed us of an “extra” cost above the negotiated price. That sent us not to our checkbook, but toward the door. Our willingness to walk away resulted in the salesman suddenly finding that the final price would indeed be the cost of the vehicle.

While purchasing a car is a major decision, it doesn’t have to be stressful. Here are the worst things you can do when negotiating a price for your next vehicle — and what to do instead to get a good deal from a car dealer.

Buy on Emotion

Ever notice how auto commercials play on our emotions? That may be great for getting our attention, but it’s a terrible strategy for getting the best price for the car. In order to avoid letting your emotions override your commonsense, it can help to script your responses to common sales comments. Here are some scripted suggestions for common situations that play with your emotions:

  • A salesperson appeals to your vanity by showing you a more expensive make/model than you came in for, as in, “Think of how you’ll look in this car!” Your response can be, “I’m not interested in that vehicle. Would you please show me the make/model I asked about?”
  • A salesperson, without your request, shows the top-of-the-line vehicle with all the bells and whistles, such as heated leather seats and an awesome sound system. Your response could be, “I’d like to see the lower-end models.”

Also, have a few calming techniques in your pocket for when your emotions run high. Deep breathing, counting to 10 backwards, shrugging your shoulders to release tension, and stepping outside for a breath of fresh air can reset your emotions and help you regain control.

CheckFYI:

Practice calming techniques before you head to the showroom to keep your emotions in check.

Blurt Out Your Budget

A good salesperson whose only goal is to sell the car will ask what your budget is and work from there. But that’s not the best way to buy a car. Instead, avoid answering the question.

You can say something like, “I’m not ready to talk about that yet. Tell me more about this vehicle.” Wait for the salesperson to tell you the purchase price of the model you’re interested in. Once you have that, you can compare it to your budget — without letting the salesperson know what that budget is.

Also, ask what’s the best price you could get for the model in question. Before you enter any showroom, determine your “walk away” price — the most you’re willing to spend. This could be a little bit higher than your budget, or the same as your budget.

Not Knowing How Much Off the Retail Price to Ask for

You should have a pretty good idea as to discounts and pricing for the make and models you’re considering. Good sources for this information include Consumer Reports, Edmunds, Kelley Blue Book, and CARFAX.

Used cars will have more wiggle room for the final price, such as up to 20 percent off the sticker price. New cars have less room for negotiation, but you could still reasonably ask for 5 percent off the manufacturer’s suggested retail price (MSRP) as a starting point. Also, research ahead of time the dealer’s current discounts and rebates.

Not Shopping Multiple Dealers

You should never buy a car from the first showroom you visit because you’ll save money if you visit more than one dealer. For example, one dealer might offer to sweeten the deal by throwing in free oil changes for life, while another one might give a higher percentage off the MSRP. Once you’ve visited a few dealers, go back to the dealership with your research about the vehicle you want.

For instance, when negotiating the final price, you could say, “Dealership X said they could give me this vehicle for $X. Can you meet that number?” or, “Dealership Y is willing to give me free oil changes for life — could you make the same deal?”

In another example, the salesperson might say the vehicle you want is the last one on the lot in order to create a sense of urgency. You could counter by saying you could get a similar vehicle from another dealer instead of rushing to snap up that particular car.

CheckNOTE:

Scripting your response before you head into the showroom can give you the confidence to get what you want.

Focusing on the Monthly Payment

The salesperson will show you a worksheet with monthly payments lasting six, seven, or even eight years to make the car seem more affordable. It can be difficult to move them off the monthly payment, but keep your focus on your budgeted amount for the entire purchase. Use your own calculator to add up the monthly payments to see if it works with your budget.

Mention Your Trade-in Upfront

The savvy car shopper knows not to bring up a trade-in vehicle from the start. The salesperson will ask if you will have a trade-in, but reply that you haven’t decided whether you will be trading in your current vehicle. You want to negotiate the best deal for your new ride without having a trade-in as part of the calculation.

If you will be trading in a vehicle when purchasing a new one, do your homework to see what you can expect to get from a dealer for the trade-in. You might be better off selling it yourself. However, private sales could take longer, as you’ll need to advertise the vehicle, then vet potential buyers.

Not Paying Close Attention to the Numbers

You want the best deal possible before subtracting rebates and other offers. Don’t let the bonuses become the discount. Also, ensure you’re seeing the out-the-door or off-the-lot price, which is often different from the sticker price.

The off-the-lot price will include delivery/freight charges (average cost around $1,000), tags and title costs (which can vary widely by state1), and state inspections (if applicable, inspection fees range between $10 and $50). Ask specific questions to make sure all of those extras are included in the final price.

Ignoring Other Negotiation Fodder

You can sweeten the deal by negotiating special features, such as leather seats, sunroofs, luggage racks, and towing packages, as part of the final price. You can also ask about dealer maintenance packages, such as yearly oil changes, tire rotations, and mileage servicing for 30,000, 60,000, and 90,000 miles. Dealers might be willing to give away more of these special features as freebies to move vehicles off the lot.

Being Afraid to Walk Away

As my personal example showed, salespeople count on you to not be willing to start all over in the car buying process. But remember — you are in charge of the negotiation. It’s your money, not the salesperson’s.

Also, no one can force you to purchase the vehicle, even after the negotiation process. If you’re uncomfortable with the final deal or if the salesperson suddenly unveils an added cost, walk away. Often, you won’t even make it to the door before the salesperson will say he can have a conversation with his manager to seal the deal on your terms.

CheckTIP:

Stay in the driver’s seat by being willing to walk away from the table if the salesperson changes the deal.

By doing your homework before you head to the dealership, you’ll be able to confidently negotiate the terms you want for your next vehicle purchase.

Citations

  1. Vehicle Registration Fees By State. National Conference of State Legislatures. (2020, Feb 4).
    https://www.ncsl.org/transportation/vehicle-registration-fees-by-state