Next to buying a house, purchasing a car is one of the most expensive investments most people make. When negotiating a car purchase, you’ll be going head-to-head with professionals whose job is to get as much money from you as possible. If you want to save money on a car, especially a used car, you need to be on top of your game.
This post focuses on negotiating a used car at a dealership, though some tactics will work with private sellers. New car negotiations are a different ballgame, and honestly, I’ve never thought new cars offered enough value to warrant the higher price tag, so I can’t speak to that as much.
However, if you go into the car-buying process prepared, you have a solid chance of landing the best deal on a car or truck. For instance, when my son bought his Ford Escape, we saved $3,000 just by following a few simple strategies. How do I know? We found an invoice from the previous owner who had paid exactly $3,000 more for the same car just two months earlier – SCORE!
We also saved a similar amount on my husband’s recent truck purchase. My daughter-in-law and I teamed up to negotiate the best deal on his Nissan Frontier. I make a big point of teaching my kids my used car buying strategies.
Another post for your adult kids – How to Help Your Adult Kids Manage their Money
Here’s how you can start saving money on a car in the future:
Tip 1: Time Your Visit for Maximum Savings
One key to negotiating a car purchase is timing. Go to the dealership at the end of the month when salespeople are trying to meet their quotas. Rainy days are also great because fewer customers mean you’ll get more attention from the sales team. Timing can help when it comes to getting the best deal on a car.
Tip 2: You are a CLAM – don’t share unnecessary information
Above all, do not reveal any financial information to them whatsoever. If he asks how much you are looking to spend – say you aren’t sure. If he asks to run a credit report – politely decline and mutter something about the dealership next door. He will try to get you in the office of the finance guy. Again politely decline and mention you will discuss financial arrangements later on.
Make sure your spouse is on board with this plan – my husband is CHATTY, so I coach him carefully on what not to say.
Step 1: Do Your Research (It’s 50% of the Job!)
Before you even set foot on a car lot, you need to do your homework. There are so many resources online—there’s no excuse not to be prepared.
First, think about what model of car best suits your needs. Is price your top priority? How about seating, safety, or style? Usually, it’s a mix of all these things.
Use websites like Kelley Blue Book (KBB.com), AutoTrader, and Consumer Reports to compare features and prices.
Focus on substantial factors like reliability, safety, and durability over superficial details like the color or seat material. I personally drive a bright orange Kia because it was a great deal, literally no one else wanted it! But you’d be surprised how many compliments I get on my unique little car. Keeping your options open on things like color can save you a ton of money.
Before visiting a dealership, you should know:
- The model and features you need vs. the features that are “nice to have.”
- The price range for your desired vehicle, both at dealerships and private parties.
- How many similar models are available locally (you’ll use this to your advantage).
Armed with this knowledge, you’ll have more negotiating power. And remember: Do NOT visit a dealership until you’ve done this research!
Step 2: Secure Financing Beforehand
If you’re able to pay cash for a car, great! But for most people, financing is necessary. Your best bet is usually a credit union or bank, not the dealership’s financing offers. They often come with higher interest rates.
Get pre-approved for a loan before you start negotiating, so you know exactly what you can afford. This also boosts your credibility when negotiating.
Most importantly, figure out a monthly payment that fits comfortably in your budget. Do not share this amount with the salesperson! If they know your budget, you’ve already lost bargaining power. Be friendly and polite, but just vague and a little clueless.
Step 3: Play the Negotiation Game
Negotiating a car purchase is like a very polite game of tug-of-war. The salesperson is trying to extract information from you and steer the deal in their favor. Your job is to keep calm, play your cards close to the chest, and come out on top.
Be friendly but firm, and don’t let emotions guide your decisions. Avoid discussing any financial details like your budget or trade-in value. If they ask, just say you’re not sure or need more time to think.
One crucial rule: Whoever mentions a number first usually loses. Keep this in mind during negotiations.
Here’s a negotiation tip: Take breaks. Tell the salesperson you need a minute to consult with your spouse or check on another dealership’s offer.
Let them sweat a bit. Look numbers up on your phone and frown.
Here’s a great book on negotiating written by a hostage negotiator. It has some great tips on how to bring someone around to your way of thinking. If an hour or two of reading can save you hundreds or thousands of dollars, it’s probably worth a look, hmmmm?
VERY IMPORTANT – Set a timeline up front. Mention that you have kids to pick up from school soon or that you have an appointment. Buying a car will always take about 2-3 hours, but longer than that could tilt negotiations in his favor. That will hurry things along – he does not want you to go out that door for any reason.
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Step 4: Pay Attention During the Test Drive
The test drive is more than just a chance to see if you like the car—it’s a vital part of the negotiation process. Stay focused on the vehicle’s condition, and don’t let the salesperson know if you’re impressed. Try out every single feature and look for anything that might need repair or replacement, such as scratches, dents, or mechanical issues.
Pro tip: Bring someone with you who can help spot potential problems. And if something seems off, don’t hesitate to ask for repairs or a price reduction before moving forward. Or maybe bail on that vehicle or even the whole dealership. Dealing with a lemon is not worth it at all!
Step 5: Stick to Your Numbers
Once you’ve decided on a car, the real game begins. The dealer will likely come back with an inflated offer—ignore it. You already have a target price (in your head) based on your research, and that’s the number you stick to. Aim for slightly lower than what other dealers are offering to give yourself room to negotiate upward, if needed.
If negotiations seem really stuck – mention that you have been talking to “Bob” from a rival dealership and you want to check with him again before you sign. Remember that every dealership in town carries similar cars and has similar deals.
After about the 3rd round of offers, up your offer slightly to give him a little encouragement. If it seems like he is starting to get within range of a final number (something that seems somewhat fair and affordable based on your research) consider offering him 10% less than that figure.
If you can’t get close on numbers, don’t be afraid to walk away. Sometimes they genuinely are at their lowest price, but more often than not, you’ll get a call with a better offer on that vehicle or a similar one within 24 hours.
Final Tip: Be Cautious with Add-Ons
Dealers often push add-ons like undercoating or extra warranties, but these can have high mark-ups. Do your research before committing to any extras. Some third-party companies offer extended warranties at a much lower cost, and you can always add them later if needed.
By following these strategies, you’ll be well-equipped to negotiate a car purchase and walk away with the best deal possible. Buying a car doesn’t have to be stressful or financially draining—just take your time, stay informed, and be prepared to negotiate!
