Buying a car from a dealership can feel intimidating. You may not feel comfortable haggling with people who do it every day—you may not even know what is negotiable. Luckily, there are plenty of resources that can help you do your homework before you ever set foot on a car lot.
Negotiating tips when buying a car
- Go in knowing exactly what you want. To start, make sure you research prices and options ahead of time, and decide what options you want on the car before you start negotiating. You won’t know if you’re getting a good deal unless you know some basic information about the car, including the invoice price and the manufacturer’s suggested retail price (MSRP).
- Understand pricing before negotiating. The invoice price is the price the dealer paid for the car. The MSRP is the carmaker’s suggested selling price, and it’s also known as the sticker price. The price you’ll negotiate will fall somewhere between the invoice price and the MSRP.
- Be strategic about trade-ins and financing. If you have a trade-in, don’t mention it until you’ve concluded negotiations and have settled on a price. Financing the loan through the dealer could be a point of negotiation as you discuss prices. And make sure you’re negotiating the price of the car—not your monthly payments.
- Explore options outside of a trade-in. For example, instead of trading in your old car, you could consider selling it to a private buyer, which could land a better price.
- Take your time, and shop around. Visit a couple of dealerships or look online to make sure you’re getting the best deal possible. You can do a lot of car shopping online now, so it could be helpful to try that as well.