How to Negotiate the Best Price for Your New Car

1. Do Your Research

Before visiting the dealership, research the car you’re interested in thoroughly. Look up:

MSRP (Manufacturer’s Suggested Retail Price): This is the car’s list price but often isn’t the final price you have to pay.
Invoice Price: This is what the dealer pays the manufacturer for the car. You can find it on websites like Kelley Blue Book or Edmunds.
Local Market Value: Check the market value for your area, as prices can vary by region.

Knowing the actual cost and average selling price helps you set a realistic negotiation goal.

2. Get Pre-Approved Financing

Secure pre-approved financing from a bank or credit union before visiting the dealership. This gives you a better idea of how much you can afford and can sometimes lead the dealer to offer you a competitive financing deal to get your business.

3. Time Your Visit

The timing of your visit can affect the price you’re offered. Consider these tips:

End of the Month or Year: Dealers often have monthly or yearly sales goals to meet and may be more willing to negotiate to hit their targets.
New Model Arrivals: When new models come out, dealers are usually eager to sell last year’s inventory, which can result in better discounts.

4. Avoid Extras During Negotiation

Dealers may offer add-ons like extended warranties, paint protection, and fabric treatments. Politely decline or ask to discuss them after you settle on the car price. Negotiating the car’s base price first can prevent add-ons from inflating the total.

5. Be Ready to Walk Away

It’s essential to be prepared to leave if the dealer doesn’t meet your target price. This shows you’re serious about your price range and might prompt the dealer to make a better offer to keep you from going to a competitor.

6. Start Low, Negotiate Up

When the dealer asks for your offer, start slightly below your target price based on the invoice and market price. This gives you room to negotiate without exceeding your budget. Here’s a general approach:

Offer a price close to the invoice but slightly higher, to show you’ve done your research.
Be firm but polite, and use market value as a basis for your price.

7. Focus on the Out-the-Door Price

Instead of negotiating based on the monthly payment, focus on the total “out-the-door” price, which includes taxes, fees, and other charges. This prevents the dealer from adding extra fees or misleading you with a low monthly payment but a longer loan term.

8. Leverage Competing Quotes

Getting quotes from multiple dealerships can give you leverage. Let each dealer know you’re shopping around and compare offers. If a dealer sees you have other options, they may lower their price to win your business.

9. Look for Dealer Incentives and Rebates

Dealers and manufacturers often offer incentives like cashback deals, low-interest financing, and loyalty discounts. Check if you qualify for any of these programs, as they can significantly reduce the car’s price. Be sure to confirm that the incentives are applied after you negotiate the price, not before.

10. Be Patient

Negotiating can take time. Don’t feel pressured to rush through the process or settle for the first price you’re offered. It might take a few hours to go back and forth with the dealer, but taking your time can lead to a better deal.

11. Review the Contract Carefully

Before signing anything, review the contract line-by-line. Make sure:

All agreed-upon terms are clearly written.
There are no unexpected fees or charges.
Add-ons and warranties are either included as agreed or excluded if you didn’t request them.

Conclusion

Negotiating the best price for a new car takes preparation, patience, and confidence. By researching, securing financing, and staying focused on your target price, you can get a great deal. Remember, the best negotiators are informed and willing to walk away if the terms aren’t right, so stay calm and keep your goals in mind throughout the process.