How to Haggle for the Best Price on a New Car

Negotiate the best possible price on your new car purchase. Haggling can leave the dealership feeling like YOU took advantage of THEM!

Difficulty: Easy

Instructions

Things You'll Need:

• a little bit of time
• patience

1. 
   Know Your Car - The First Step to Haggling

   Narrow Your Search
   Start your research online and decide which model of vehicle you really want. Go to the manufacturer's website to find out the MSRP for that vehicle.

2. 
   The Right Dealership Can Mean Negotiating the Best Deal

   Locate the Right Dealership
   Go online and find all the dealerships in your area that carry the car you have chosen. Look to see if any are offering sales, rebates, special financing terms, etc. Make a list of the dealerships and start your search at the dealership that is currently offering the best price on the car you want.

3. 
   Negotiate to Pay What You Want to Pay

   Determine What You Want to Pay for the Car
   Now that you know about how much your vehicle is going for, determine what you want to pay for the car (don't forget taxes, registration, etc.) Let's say this number is $25,000. At this point you must decide whether you will end up paying less than that, because you have a trade-in or money to put down; or more than that, because you have a vehicle to trade that is upside down. Add or subtract the appropriate amount and you will arrive at your final price. Let's say you put $3000 down...you now want to pay $22,000 for the car.

4. 
   Knowing Your Monthly Payment is Key to Negotiating the Best Price for a Car

   Determine Your Monthly Payment
   This is the most important step! When you go into a dealership, they will try to confuse you as to the total amount that you are really paying for the car by talking to you only about your monthly payment...not about the total price. It is very important that you know what your monthly payment should be! Use a website like bankrate.com to figure out what your monthly payment will be for a 3, 4, or 5 year loan using the total price that you figured out above. A website like bankrate.com will tell you what the average interest rate for an auto loan is in your area. Use this rate for your calculations.

5. 
   Patience is the Key to Haggling for the Best Price on a Car

   Visit the Dealership...and Wait
   Now you are ready to go to the dealership. Find the car you want. Test drive it. Sit down and let them make the first offer. Then lay out for them exactly what you want. Say, "I want to pay no more than $25,000 for this car, I will put $3000 down. I want an interest rate that is no higher than x% and I will pay no more than x$ monthly." Start out with a price that is about 10% lower than what you are actually willing to pay so you have some room to negotiate. Then once you have laid out your terms, be willing to wait them out. They will try at least two to three times to give you horrible pricing before they will come out with their best offer.

6. 
   To Negotiate the Best Price...You Must Be Willing to Walk Away

   Be Willing to Walk Away
   At some point, to get the best price, you will probably have to actually, physically start to walk away. Say something like, "Well, I really want to buy a car today, but I can't do it for that price. I am going to try another dealership." Get out of your chair and start to walk away. They will usually then come back with their best offer. When the salesperson tries to ask you questions, just keep coming back to the terms you have laid out for them. Don't let them sidetrack you. You will get their best deal and walk away happy. If not, make good on your threat and go to another dealership. Someone else is always willing to work hard for your business. Happy hunting!

Resources

• Monthly payment calculator
• New Car Values - Kelley Blue Book

[jhardesty0879]

on 4/28/2009 Well written article with some good advice for car buyers. Thanks.

[savemoneycenter]

on 12/6/2008 Great advice, I love getting the best of them at the car lot, they even bought me dinner at the nice cafe in the dealership to keep us there last time.

[ALLinRueThyme]

on 11/26/2008 Yes the car salesmen use many psychological tricks. So we should be aware of that.

[mechelepellebon]

on 11/15/2008 "Be willing to walk away" I agree with the other ehow members, this strategy is essential to the negotiation process. I will bookmark this article for later use.

[Treakins21]

on 11/7/2008 There are some good tips here. I'll be sure to keep those in mind.