Negotiating a car price can be important if you want to save money on a new or used car purchase. But it might seem complicated and frustrating, especially if the seller doesn’t budge from an initial asking price. How do you successfully negotiate your car price?
Here are some tips for success:
Know-How Much You Can Spend Before You Go Shopping
Not knowing how much money you can spend before going shopping isn’t helpful. There is little point in trying to negotiate a lower price if you aren’t sure of what your maximum budget is.
In order to determine that number, consider factors such as your monthly budget, how much money you have saved up already and what other expenses need to be paid, including student loan payments.
Once you determine how much you can afford to spend on a car, keep that amount in mind when shopping. You can use it as an upper limit or target price. For example, if the highest number you want to pay is $15,000, avoid cars priced higher than that figure.
How? By knowing how much all the cars listed are selling for; look at ads online and in newspapers for any car that meets your requirements (make, model year, color).
If no cars meet your needs within your budget range, decide what else you could do with that money besides buy a car (pay off debt or save it until better financing rates improve).
Find Out How Much the Seller Wants
Before sitting down to negotiate with the dealer, know how much money they want for your new or used car. How can you determine that figure? Be certain to price the car honestly.
Research current market value for it in your area and don’t forget to include tax, title, license fees and registration when determining its original cost.
To find out if the seller is adding their own profit margins, research resale values of cars similar to yours at sites like Edmunds, Kelly Blue Book, or NADA Guides.
If you are buying from an individual instead of a dealership, be sure to ask if any warranty or service plans are included in the asking price.
Consider Your Needs When Negotiating Car Prices
Before you even walk into the dealership, be sure to determine your needs for a vehicle. How do you plan to use the car? How many people will ride in it? Also, How many times per week or month will the car be used?
How long do you plan on using it (how long is your loan term)? What kind of safety features are required? How much cargo space is needed—in cubic feet and in terms of what types of items will be placed in that space (such as bags, boxes or other larger items)?
Having answers for these questions can help you negotiate better deals. For example, if you know that five people need to fit comfortably in the vehicle when taking road trips, consider cars with at least three rows of seats.
If you know the type of cargo you may need to haul, look for trunks with at least 16 cubic feet of space. Will any future children be riding in the back seat and, if so, will they require car seats?
How much storage is needed in the trunk or cabin? How often will this vehicle be used and for what purposes—weekday commuting only, weekend road trips or both?
Be Knowledgeable When Negotiating Car Prices
Knowledge is power when it comes to negotiating a lower price than the asking price. How can you gain that knowledge before entering into negotiations with a dealer or seller?
Research makes perfect! Gather accurate information on features and prices of all comparable vehicles (in terms of make and model, and features and options). How do the prices of those vehicles compare with the asking price of the car you want? What specific features on your desired car are optional and what is standard equipment?
How much money can be saved by opting for a higher model year, make or trim level instead of the lowest one available? How many miles does this vehicle have on it already?
What to Bring When Negotiating Car Prices
In order to make negotiations easier, determine beforehand what items will help your case. Bring a printed copy of comparable vehicles’ sale prices from online sources such as Edmunds, Kelly Blue Book or NADA Guides.
Find out if there are any special offers going on that day at that dealership if so, take proof of that to the negotiations. If you have your financing already in place before going into the dealership, bring proof of that and your down payment with you (or at least an estimated figure).
If You Have a Trade-In…
When trading in any vehicle when buying another new car or used car, be sure to do so after doing research on How To Make The Most Money When Trading In Your Car.
It is important to determine what value it has—how much can someone else get for it? How many miles are on it and what overall condition is it in? How old is this trade-in and how well was it maintained?
Likewise, How does its current market value compare with similar vehicles available for sale in your area? Similarly, How much will taxes and fees be on top of the sale price for this vehicle? How does that figure compare with appropriate sale prices in your area?
How to Negotiate Dealer Invoice Prices
When negotiating, it is important to know How To Calculate The Dealer’s Cost. If you are buying a new car, the dealer invoice price should be given. How do you find out what the dealer paid for that car?
That number will help you determine how much room there is for negotiation. You can also use How To Negotiate A Better Price On A New Car With The Dealership. If not, expect to pay MSRP plus additional fees and taxes.
Knowing these steps before heading into the dealership will make negotiations easier! Just take your time and collect as much knowledge on How To Negotiate Car Prices as possible.
