4 Tips for Negotiating a Good Car Deal

After weeks of searching, you’ve finally found the car you want. Congratulations! Although you’re excited about driving it off the lot, you’re not looking forward to making the deal—your negotiation skills aren’t quite up to par.

Many car lots set their prices high, expecting prospective buyers to negotiate. Most of the time, the pep talk you give yourself in the five seconds before the salesperson approaches goes right out the window once you hear, “Ah, I see you’ve got a great eye for quality!”

True negotiating power begins before you ever interact with a salesperson. Here are some tips to get the lowest price possible the next time you buy a car.

Know what you want to pay
Before you head to your first lot, have in mind exactly how much you want to pay. If you’re taking out a loan, base this number on the amount you can afford to pay monthly. This information is just for your own personal knowledge. Don’t disclose it to the salesperson until after you’ve seen their offer. Use a car payment calculator to determine how much your payments will be at various price points.

Pay attention to the total vehicle cost, not just the monthly payment. Salespeople may try to conceal additional costs in a monthly payment breakdown while increasing your overall total spend. It’s also important to note the dealer’s cash rebates since those can factor into the negotiation process. If there are currently great deals on vehicles due to such rebates, you may find the lot is less willing to negotiate. However, you could also try to get a better deal by pointing out recent rebates that are no longer in circulation.

Know the market
Even if you find your dream vehicle nearby, chances are it isn’t the only one on the market. Research online and know the prices others are charging for similar vehicles. Check the Kelley Blue Book value of any car you’re interested in purchasing or trading in. Although a dealer may mark up the price to make a profit, knowing the market value gives you leverage to negotiate.

Know when to walk away
It’s long been said that the key to winning any negotiation is a willingness to walk away. However, it’s important to only walk away if you’re truly willing to give up the vehicle. You should never get too attached to any one item during the buying process, since it can lead you to pay more than you normally would. Research the vehicle beforehand and find other alternatives for buying. Then if the lot won’t negotiate, you truly can walk away.

Know your trade-in value
If you plan to trade in a vehicle, don’t disclose this from the start. A salesperson may lowball you on the new car purchase, knowing they can make up the difference by giving you less than normal on your trade-in. Get the deal, then offer up your trade-in. If you’re up for the work, you can actually make more selling your old vehicle on your own rather than selling it to a dealer.

In addition to saving money through negotiating, get a better interest rate by financing the loan directly through a financial institution. Visit this car loan interest rate page to get a better idea. If you get preapproved before you begin shopping, you’ll also know exactly how much car you can afford and avoid disappointments after you’ve found your dream vehicle.