Purchasing a new car can feel like a one-sided contest, with the buyer acting as an amateur and the dealership as a team of seasoned professionals. However, by establishing clear terms from the outset, you can make the playing field much more balanced. With the right approach, you’ll stand a better chance of securing a favorable deal.
Choosing a car goes beyond just the price. While a salesperson isn’t likely to send you to a competing dealership, they do possess valuable knowledge about the cars they sell and which might suit your needs best. It’s important to listen and consider their advice, especially if you’re still in the early stages of exploring options.
Whether you negotiate via email, use an intermediary service, or engage directly with a salesperson in person, one thing remains constant—you’ll end up at the dealership. This is where the paperwork will be finalized, and the keys handed over. But it’s how you get there that really matters.
Start Strong: Know Your Position
Before entering negotiations, ensure you have a solid understanding of your position. This includes knowing:
- The price you’re willing to pay, is based on what the dealer paid for the car or your research on fair pricing.
- Competitive offers from other dealerships or online sources.
Keep these figures at the forefront as you begin discussions.
When negotiations begin, the salesperson may first mention the Manufacturer’s Suggested Retail Price (MSRP) or suggest focusing on monthly payments. Don’t let these tactics derail your negotiation. Instead, concentrate on the final purchase price.
Start by focusing on the lowest possible price for the new car. Don’t allow discussions to veer into trade-ins or financing just yet. Negotiate each aspect separately to prevent confusion and maintain control over the process. Once you’ve locked down the vehicle’s price, then you can consider the trade-in or financing options.
Set expectations from the beginning:
- You’ve already researched the car thoroughly and have test-driven it.
- You know the exact trim and features you want, and you’re aware of the dealer’s cost.
- You’ve calculated a fair price that allows the dealer to make a reasonable profit.
By establishing these points early on, you prevent the salesperson from leading the negotiation on their terms.
Initial Offer: Be Confident and Calculated
Begin negotiations with your calculated low offer. It’s helpful to base this figure on average transaction prices for the model you’re considering, rather than the invoice price, as this better reflects current market conditions. Expect a counteroffer and be prepared for the process to involve several back-and-forth exchanges.
Salespeople may push back, citing objections or attempting to get you to raise your offer. It’s crucial to remain firm, even if the negotiation gets heated. Make it clear that you’re prepared to walk away if the deal doesn’t meet your terms. This mindset will keep you focused and reduce the likelihood of being pressured into an unfavorable deal.
Sometimes, negotiations will stall, and you’ll find the dealer’s offer doesn’t come close to your target price. In such cases, don’t hesitate to leave. You can always find another dealer willing to meet your expectations, especially if you’ve gathered competitive offers elsewhere. Walking away gives you the leverage to either return for a better deal or explore other options.
Once the price for the new car is agreed upon, you can move on to discussing your trade-in. Ensure that you’re getting at least the wholesale value for your vehicle by referencing pricing sources. If the dealer isn’t offering a fair trade-in, consider selling the car elsewhere to avoid being lowballed. Only after this should you finalize financing and other details, keeping your initial focus on the purchase price.