How to Negotiate a Price on a Car?
In the market for a car and wondering how to negotiate a price on a car? Look no further, we’ll break down step-by-step on how to do so! Keep in mind, this is on purchasing a new car.
Let’s dive into the top 7 ways on how to negotiate a price on a car.
1. Research
Research, research, research! Have a sense of the price range of your desired vehicle. Now, there’s a lot to choose from. However, don’t let analysis paralysis keep you from honing in on a car. What features do you want? There are many to choose from, like back-up camera, gas/electric/hybrid, sedan/SUV, mileage, the list goes on! In general, certain features you want will help you narrow down on the selection. Different vehicles have different costs, be sure to have a general idea of your budget and what features that will include.
Check dealer inventory! In times of high demand and low supply, the dealers close to you might not even have the vehicle you want. Fortunately, on dealer websites, you can even see the inventory that’s coming down the pipeline. If the dealer doesn’t have the exact car you want, or has it in a color that’s less desirable, this could be leverage for you!
2. Separate the Numbers
Negotiate the total price, not the monthly payments. This doesn’t only apply if you’re financing. If you’re paying in cash, this step is also crucial. Maybe the car you want is in high demand and low supply. Do not, for a second, think you don’t have leverage. Dealers are trying to close the deal. A sold car is cash for them. They’d rather give you a better deal and sell the car than wait for a potential customer for a better price. That said, the price will have to be reasonable. If you’re not able to negotiate on the base price of the car, maybe you can negotiate the upgrades!
3. Timing Matters
In general, end of the month, quarter, or year is when sales people have quotas and may be more desperate to make deals. This is especially the case towards the end of the year when next year’s models are coming.
4. Anchor
Have a sense of what your target range is. Fortunately, when you look at dealer inventory online, they’ll also show the base price of the vehicle. So at the least, you’ll have an idea of where the dealer will start. Take a look at the upgrades within that model of car. You can get an idea of how much those upgrades cost. If you start lower, it’s likely you’ll end at a lower price than if you were to start higher.
5. Leverage Competition
This is a CRUCIAL step! Even if you didn’t do any of the previous steps, do not be afraid to pit dealers against each other! And don’t be afraid to visit various dealers before actually making your purchase.
Additional tip: some dealers have a refundable deposit where you place a deposit on the vehicle you want. When it arrives, you’ll get first dibs. However, in the meantime, you’re still able to visit other dealerships to find a better offer. Take advantage of this, because this means you have absolutely nothing to lose.
6. Stay Calm & Be Willing to Walk Away
This step actually goes hand-in-hand with leveraging competition. By visiting different dealers, you also find out where they’re willing to cut you deals. For example, you can usually cut deals on the upgrades. If one dealer’s willing to do it, it’s likely another dealer’s willing to match that offer or even beat it! But you don’t know that until you ask. It’s important to keep in mind that this does not have to become some hostile negotiating environment. No one wants to make a deal in that scenario. However, don’t be afraid to walk away if the deal isn’t something you are happy with!
7. Get Everything in Writing
Now, someone can cut you a verbal deal and potentially go back on it. This is the last thing you want; make sure you get things in writing! And if they’re not able to provide a contract, at the very least, have them sign and date a written note. Don’t let your hard work go to waste!
Happy car shopping! It doesn’t have to be a daunting experience, especially if you follow these steps!
To reiterate, the top 7 ways on how to negotiate a price on a car are:
- Research!
- Separate the Numbers
- Timing Matters
- Anchor
- Leverage Competition
- Stay Calm & Be Willing to Walk Away
- Get Everything in Writing
