Do you find yourself intimidated by car salespeople? Do you want to negotiate the cost but don’t know where to start? Today, RSG Contributor Tyler Philbrook will guide you in finding the right vehicle for what you need and how to negotiate for the car price you want.
Before apps like Uber, Lyft, and Doordash were a thing, I would deliver prescriptions for a pharmacy. I had a 17-year-old car that was literally held together by duct tape, zip ties, and lots of prayers.
As you would expect, one day that car just couldn’t go on anymore, and she died—RIP Gertrude. But, because I was a delivery driver, I needed a car, and I needed it now. So, I started going to dealership after dealership to find one.
It was a horrible experience. I had no money, no credit, and no one would work with me. While it all worked out for me in the end, it wasn’t a pleasant experience – and I learned a lot about the car buying process.
Luckily, now there are so many better ways to shop, negotiate, and educate yourself when you buy a car.
- Search for the vehicle that will suit your needs, not just your wants
- Do not negotiate payment amounts, only negotiate the cost of the vehicle
- Don’t be afraid to say “no” and walk away—another dealership might have a better offer for you! Check out our car buying guide for more information.
Before Searching for Your Next Vehicle
The most important question to ask when picking a new car: What are you going to use the car for?
If you are a single person who hardly ever leaves your house, consider getting a comfortable car with good gas mileage that is perfect for one person. If you have a large family and regularly visit friends and family as well as go on trips, a larger vehicle like a van or SUV might be a better option for you.
Do you want to use your car to make money? Maybe you want to do some rideshare, delivery, or even rent the car out when you aren’t using it? Pick a car that will last, and make you the most amount of money with the least amount of additional costs.
Editor’s note: If you’re looking for the best cars for rideshare and delivery, check out our guide: Best Vehicles for Delivery – How to Find the Best Car for You
If you want to learn more ways you can make money with your car, check out our video: 11 Ways to Make Money With Your Car
The bottom line: Don’t just start looking at cars and decide which one you want. Instead, decide what you’ll be using the car for and pick a car with features you need for that purpose.
Choose a Variety of Cars that Fit Your Needs
Once you know what kind of car you need, start looking at the options around you. Not necessarily the exact cars available (that comes later), but look at the types of cars that meet the criteria of what you need.
Decide if you want to buy a new or used car, or if leasing is a better option for you. One thing to look at when it comes to buying new cars is how much they depreciate and how fast. After three years, the average car is worth about 60% of what it was when new, according to Investopedia.
For some people, purchasing a new vehicle brings them more peace of mind knowing it hasn’t been driven by anyone else. In theory, a new car should have no issues. However, others don’t mind spending significantly less to get a mostly new car.
Next, research the type of car you are considering. For me, my wife and I love the Subaru Crosstrek. We need a vehicle that isn’t too small, but not too big either. We’ve rented one several times while on vacation and we both love it.
Go to sites like Kelley Blue Book, or Edmunds to find out what cars in your area are selling for. Once you have the vehicle in mind—and the price you want to pay—there is one last step before actually trying to buy it: Shop online for it.
Before going on a single lot, making a phone call, or sending a message on OfferUp, you need to see what dealerships and lots in your area are offering for the car you want and if the price is at least close to what you want to spend.
Once you have that information in hand, now it’s time to finally go out and actually shop, and more importantly, negotiate for your new car.
How to Negotiate Car Price
As soon as you step foot on a car lot, you will likely be swarmed by 2 to 4 salespeople. If you have already done all the research and know exactly what you want, that makes the conversation really easy.
For me it goes something like this:
Salesman: “Can I help you, sir?”
Me: “Yes, I’m looking for a Subaru Crosstrek between the years of 2015 and 2017.”
Salesman: “Those are nice cars, I don’t have any here, but I do have a 2020 I can get you in today for a good deal.”
Me: “No, thank you. We’ll go somewhere else.”
It isn’t always that simple, and sometimes they really do have a very good deal on new cars, so there’s no harm in at least listening to them.
To save time and avoid the above conversation, call the dealership before going and ask if they have the car you’re looking for on the lot.
After you have found the car, now comes the part many people mistakenly avoid or skip: Negotiating.
Because you’ve spent the time researching, you are in a much better position to negotiate the best price. Don’t be afraid to negotiate.
One of the first things most salespeople will ask during the negotiation is what payment you’re looking for.
I cannot say this enough: do not negotiate payment amounts, only negotiate the cost of the vehicle.
Why? If you ask for a specific payment amount, they will simply extend the loan out in order to get the payment as low as possible, which doesn’t lower the initial cost of the vehicle and will require you to pay far more in the long run.
A low monthly payment sounds good, but if you have to pay that small payment for the next 5 to 7 years, it isn’t so great.
Here’s a piece of advice that not everyone considers: The best way to make sure you aren’t negotiating payment is to already have financing in place before going to the dealership. Call your bank or a local credit union and get financing.
When price starts being mentioned—if at all possible—get the salesperson to state the price first. The old adage is “whoever speaks first loses.” If you thought that part was hard, the next part is even harder.
Once the salesperson provides a number, it’s now time for you to come back with your own. When you do, do not speak again until he or she counters.
Finally, be willing to walk away. Sometimes that means just saying no, while other times it literally means getting up and walking out.
If you do have to walk out, do so respectfully. Explain that you will have to go somewhere else, but leave your contact information in case they change their mind. Usually within a day or two they will reach out with a deal. If they don’t, you’ll know that’s not the dealership for you.
As you can see, it’s not so much about how to negotiate car price as it is first doing your research. By doing a ton of research first, like:
- Determining the best car for you
- Calculating how much you can actually afford to spend (either buy outright or pay monthly)
- See how much the car(s) you want are worth, by looking them up at KBB or Edmunds
You’ll save yourself a ton of time (and money!) when you get to the negotiating table. You can negotiate car price at the dealership. Make sure you don’t speak first and are willing to leave if you’re getting pressured into spending more than you want.
However, if you’re not willing to negotiate at a dealership, you can also shop around online. My personal recommendation? Go to a dealership and shop around online. In this scenario, you’ll likely get the best price of all and you’ll have some opportunity to take a test drive.
How do you negotiate a car price online?
Online pricing is typically lower than the price on the lot anyway. Even so, contacting a dealership via phone call, email, or even a fax can be used to negotiate on the price.
How much can you negotiate on a new car?
This really depends on how good your negotiating skills are. However, educating yourself can save you up to 15% more during negotiations, even on a new car.
How much will a dealership come down in price on a used car?
You can typically get the dealer to come down 8-15% on used cars.
How do I ask the dealer to lower the price of my car?
My typical question is “What is the best price you can give me on it?” Find a question like mine that you’re comfortable asking and just ask. As I mentioned above, try to get them to mention their number first.
Can you back out of a car deal after signing?
Yes and no. Some dealerships have a “cooling off” period of a few days that allows you to bring the car back. Most of the time though, the answer is no. After you have signed the paperwork and left with the car, you can’t bring it back. Though if there is a valid reason, try calling the dealership and see what they can do.
How do I find out what a dealer paid for a used car?
The simplest way is to ask them. Some dealerships will actually put the invoice on the window for you to see when looking at the car. Others will provide it if you ask. If you are polite and not demanding, odds are they’ll let you look at it.
Readers, have you successfully negotiated a car price? Share your experiences below!
-Tyler @ RSG