While getting behind the wheel of a new or used car can be a lot of fun, few buyers find the process of buying a car an enjoyable experience. With some preparation and persistence, you can get the car you want without blowing your budget. Getting a great deal makes buying a great car even better, and this guide aims to give you the information you need to confidently navigate the car-buying experience and learn how to negotiate car prices.
Car buying is one of the last bastions of freewheeling price negotiation that happens directly between a buyer and seller. However, it’s also one of the most unbalanced negotiations you’ll find. Professional car salespeople work with hundreds of transactions per year, while most car buyers only get a vehicle every four or five years. Fortunately, consumers have better access to vehicle data than ever before.
This guide will walk through three sections for negotiating a car price:
- Be Prepared – Do research ahead of time to prepare yourself before you start visiting dealers.
- At the Dealership – Work with multiple dealers and know what you should do when talking to salespeople and their managers.
- Completing the Deal – Complete the transaction, while protecting the deal you just negotiated.
Getting a good price on a new or used car starts weeks before you ever go to a dealer or other car seller. Your goals are to have as much information as possible about the vehicle you want, and have a preapproved financing plan in place.
The first step is finding the car you want that fits your needs and budget. Our new car rankings and reviews and used car rankings and reviews are based on the consensus opinions of the country’s top automotive journalists, combined with quantitative data on safety and reliability. When you start visiting dealers, you’ll want to focus on the vehicle you want, not the one they want to sell you.
Arm Yourself With Information
You’ll want to know everything you can about the car that you are seeking, from its sticker price to the invoice price that the dealer may have paid for it. You can see what other buyers in your area paid for similar cars by looking at the TrueCar Market Analysis report linked in each of our new car reviews. While you’ll often hear talk that a car’s invoice price (or simply, “invoice”) is the price to aim for, the TrueCar information is a more accurate measure, as it’s often impossible to know what a dealer’s true invoice was.
The buying insights at the bottom of many of our reviews show the current demand for the vehicle, helping you identify models that are in high or low demand. If the demand is lower, you’ll like be able to strike a better deal.
Not every car dealership is loved by its customers. There are several sites, from Yelp.com to specialized auto dealer rating sites, which show reviews of car dealerships from customers. While every business has some bad reviews, you’re looking for trends that show you which dealers are better to do business with than others.
Financing Comes First
Dealers typically want to merge all of the components of a car deal into one big transaction. That’s potentially a confusing and costly way to buy a car, because you’ll be negotiating financing and the price at the same time. You can take the financing component out of that package by getting a preapproved car loan from an outside lender before you head to the dealer.
Having a preapproved car loan not only saves you a lot of confusion, it’s also the best way to get a great financing deal from a dealership, as they’ll have to work to beat the offer you already have. There are several places where you can get a financing offer, including large national banks, community banks, and credit unions. You’ll typically find the best rates at credit unions, and larger banks usually offer the broadest array of financial services. Still, banks occasionally offer interest rate specials, and a few credit unions rival the size of big banks