How do I negotiate with a car dealer?

Sun, May 4, 2014

Financial Advice

One of the sure fire ways of getting the absolute best price on a car is negotiating a lower price with a car dealer. It sounds easy in principle, but once you’re on the lot with a professional seller, things get a lot tougher. So how can you negotiate with a slick-talking car dealer to get the best deal, especially when you have very little sales or negotiation experience?

Time is Money

In sales, you live or die according to your targets. If a salesperson meets his or her sales target, it means their jobs are safe for another month. If you meet a salesperson at the tail end of a month, say the last two days, they might be eager to make a sale. Any sale!

Lesson: If you make a very low offer and they don’t go for it, walk away. If they let you walk, it means they aren’t under pressure.

Get a car that’s on the lot

When a dealer has cars ready to drive away on the lot, it means they own them and are paying interest on them. So they have to get rid of them. If the dealer has to custom order a car that’s essentially already on the lot (the same model, for example) that gives them the upper hand since they don’t have to pay for it themselves.

Lesson: Go for a car that’s already in the yard. Say you had your heart set on a different colour, but secretly, “accept” the colour that’s already there regardless.

Lesson #2: Don’t get suckered in with extras. Rustproofing? Cars chassis are made with lots of zinc, so it doesn’t need it. Just say “no.”

Don’t trade-in or get finance at the same place you buy

If a dealer seems too generous in one part of a three part deal, chances are the dealer’s winning on two out of three. If he or she gives you a very generous trade-in, the price of the car and the in-house finance might end up costing you much, much more.

Lesson: Sell your old car privately and arrange finance yourself. There’s so many products out there it’s certain you’ll get a much better deal.

Show Them the Money

If you’re negotiating, go for the lowest reasonable price you want. If the car costs $39,990, offer $32,000. Say you absolutely cannot go below $32,000. If he says they can’t go below $34,000, don’t be afraid to walk away. If the salesperson won’t budge, give him your contact details and say you’ll look for something similar at that price. If you walk off the lot, chances are so has the sale. It’s their job to keep you there and close the deal.

Lesson: Always remember: salespeople need sales! Deep down, both of you want the same thing.

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  1. Retire Young and Wealthy » What is Indirect Automobile Financing & How Will it Help You - 27. Jun, 2014

    […] buying process. With your financing already in place, you can walk into any dealership, pick a car, negotiate the price, and the bank issuing your loan will send a check to the dealership — short, simple and to the […]

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