How to Negotiate Auto Prices Like a Pro

Posted Wednesday, Oct 18, 2023

Buying a car can be exciting and nerve-wracking, but one thing's for sure: mastering the art of negotiation can make all the difference in the deal you ultimately secure. Whether you're in the market for a new vehicle fresh off the lot or a dependable used car, knowing how to negotiate auto prices like a seasoned pro is a skill worth developing.

In this article, we'll look at how to negotiate auto prices and what to remember during the process.

How to Negotiate Auto Prices

Do Your Homework: Research is Key

The first step to anything is to know what’s going on.

Before you step into a dealership, delve into the details of the car you're interested in. Research the make, model, and trim level, and familiarize yourself with available options and packages. To gauge a fair market value, consult online resources, read expert reviews, and compare prices from multiple dealerships in your area.

Set Your Budget & Stick to It

Negotiation begins with a clear budget in mind. Determine how much you're willing to spend on the car's purchase price and factor in ongoing expenses like insurance, maintenance, and fuel costs. Setting a budget establishes a foundation that guides your negotiation strategy and ensures you don't overspend.

Visit Multiple Dealerships

Don't limit your options to a single dealership. Visit several in your vicinity and consider exploring those in nearby cities if they have the specific car you desire. Gathering multiple price quotes provides you with valuable leverage when it's time to negotiate.

Timing is Everything

The timing of your purchase can significantly impact your negotiation success. Dealerships often have monthly sales targets to meet, which may make the end of the month a favorable time for negotiation.

Similarly, keep an eye out for promotions and holiday sales events. You may also find attractive deals when shopping for the previous year's model when the new model year is introduced, as dealerships aim to clear their inventory.

Test Drive & Inspection

Before getting into auto price negotiations, take the car for an extensive test drive. Pay close attention to how it handles, its comfort, and any unusual noises or vibrations. Inspect the vehicle thoroughly for any flaws, scratches, or mechanical issues.

If you identify any problems, use them as bargaining points to lower the price or request that the dealership address the issues before finalizing the deal.

Be Prepared to Walk Away

Knowing how and when to walk away is one of the most important negotiation tactics, especially if the deal isn’t aligned with your expectations. When you show the other party that you can walk away without problems, dealerships are likelier to make concessions in your favor.

Negotiate the Out-The-Door Price

Rather than getting bogged down in discussions about monthly payments, focus on negotiating the out-the-door price. This all-encompassing figure includes not only the purchase price of the car but also taxes, fees, and any optional extras.

Negotiating this way ensures that you have a clear understanding of the total cost.

Consider Financing Options

If you plan to finance your purchase, explore your financing options in advance. Banks or credit unions sometimes offer better interest rates and terms than the dealership's financing.

However, keep an open mind about dealership financing, as they may have special promotions or incentives that can sweeten the deal.

Be Firm

Throughout the negotiation process, stay firm on your stance. This doesn’t mean you must become confrontational - stay polite and respectful but don’t back down.

Building a positive rapport with the salesperson can often work in your favor and increase the likelihood of securing a favorable deal.

Review the Final Offer Carefully

Before signing any documents, take the time to review the final offer meticulously. Ensure that all terms and conditions align with the agreements reached during negotiations.

Don't rush this step; ask questions and seek clarification on any unclear points. By doing so, you can avoid unexpected surprises down the road.

Things to Keep in Mind During Auto Negotiations

Documentation

Ensure you have all your documents in one place so you know exactly what you’re looking for and what you expect from the seller.

Any data you collect on the market prices for the specific make, model, and trim level of the car, bring it along. It can serve as a reference point during negotiations. If you've secured pre-approved financing from a bank or credit union, bring the documentation. This demonstrates to the dealership that you have alternative financing options and may encourage them to offer competitive rates.

Understand Dealer Incentives

Many car manufacturers offer rebates or incentives to dealerships, which can be passed on to you as the buyer. Research any current manufacturer incentives for the car you want to buy and make sure they are factored into the negotiation.

Dealerships may also have their own incentives or promotions. These could include discounts, special financing rates, or free add-ons. Be aware of these offers and consider how they affect the overall deal.

Consider Trade-Ins

Before you start negotiating, research the value of your trade-in vehicle. This knowledge will help you assess whether the dealership's offer for your trade-in is fair.

When discussing the purchase of the new car, keep the trade-in value separate. Dealerships may use the trade-in value to manipulate the overall deal, so treating it as a separate transaction is essential.

Be Mindful of Additional Costs

During the negotiation, the dealership might try to sell you add-ons such as extended warranties, rustproofing, or paint protection. Carefully consider whether these extras are necessary and cost-effective. If you're not interested, politely decline.

Discuss its terms and costs separately if you're considering an extended warranty. Be sure to understand what it covers and for how long and any deductibles or conditions.

Get Everything in Writing

Before finalizing the deal, insist that all negotiated terms are included in a written sales contract. This contract should clearly state the agreed-upon purchase price, any discounts, incentives, trade-in value, financing terms, and any commitments the dealership has made regarding repairs or modifications.

Take the time to carefully review the sales contract, paying close attention to all the details. Ensure that it accurately reflects the terms you negotiated. Don't hesitate to ask for clarification on any confusing or inconsistent points.

Do not rush into signing the contract. Take the time you need to fully understand the document and ensure that all your agreements are upheld in the contract. Only sign when you are comfortable and confident that everything is as you agreed.

Final Thoughts

At Imperial Automotive, we understand that negotiating auto prices is a tricky but vital part of the process. Our team of experts and our network of lenders can help you out and get you the car of your dreams.

Imperial Automotive has a wide range of vehicles at great prices with financing options. If you’re looking into buying a car, visit us in Hattiesburg, MS! Let us help you out!