How to Negotiate a Car Deal

Many people dread buying a car, but it's only a rough process if you don't know how to do your homework. With invoice pricing readily available on the internet, you can prepare a fair offer, check dealer inventory and walk into dealerships with confidence. All it takes is a few steps, some research and some confidence.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Invoice pricing information
• Local dealer inventory information

1. Find the invoice price for the car you are interested in buying. Make sure to add in any features or accessory packages you want. Check more than one website to make sure that the invoice figures are correct, as some sites may not be up-to-date. You can find suggested sites in the Resource section.

2. Make a note of whether there are any rebates or other special offers on the type of car you wish to buy. Pay attention to any special qualifications. For example, some rebates are limited to recent graduates or owners of a certain car brand.

3. Find out how much the car you want to buy is selling for in your area. You can get most vehicles at or just above invoice price, but some hot-selling models will sell for much more. Edmunds.com's True Market Value will give you an idea of the discount you can expect, as will forums devoted to particular car types and styles.

4. Calculate a fair price for the car. For a slow-moving model, you can start at invoice. For a more popular model, you can add a percentage or two. Even if the dealer sells you a car at the invoice price, he will still make money because that is not the true cost of the car. There are other factors, such as the holdback amount and possible incentives from the manufacturer.

5. Check the online inventory of your local dealerships to make sure they have the type of car you want, along with the correct options and accessories. Start with the closest dealer who has the car in stock.

6. Go to the dealership and give the salesperson your offer on a specific vehicle in the dealer's inventory. Tell him how you arrived at the number so he knows that you did your homework. Don't let the salesperson try to talk to you about payments and how much you can afford. Agree on the sales price first and discuss payments and financing later. If possible, arrange your loan in advance from a credit union so you can skip the financing discussion altogether.

7. If the salesperson gives a counteroffer, stay firm. They always want to believe there is room for negotiation, but if you have done your homework and calculated a fair price, there is no need to pay more. If the salesperson will not agree, leave the dealership and head to the next one on your list. Often, your deal will suddenly be accepted before you reach the door.

Tips & Warnings

• Many car dealers load their vehicles up with pinstriping, window tint and other extras that have an inflated markup. Simply refuse to pay for these items. Tell the dealer you either want a car without the extras or they need to be thrown into the deal.
• You may think you've come to a firm price, but you will often see a fee called a dealer fee, document fee or some similar term preprinted on the contract. It can run from $50 anywhere up to $1,000. The dealer may tell you that he is required to charge it by law. That is partially true in some states, but the law really states that if he charges one person, he must charge everyone. The fee is pure profit to the dealer, and even if he has to leave it on the contract, he can deduct the amount from the car price.

Resources

• Edmunds car research site
• Kelley Blue Book car research site
• Information on negotiating with dealers