Tips on negotiating price on new car

kal2002August 8, 2005

I am interested in buy a new Honda but I HATE dealing with the dealers. Any tips on dealing with these people without being scammed? I heard that people buy cars on internet and it is much cheaper and easier. How do you do that?

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I have never bought a car on the Internet, but if I were going to try doing that, what I'd do is get my quote from the Internet dealer, print it out, and then take it into my local Honda dealer and tell them if they can match that they'll sell a car to me today. I'd still buy locally even if they couldn't quite match this "best" price. Service after the sale is more important to me than the absolute lowest price, and even though the local dealer is supposed to service any car of its nameplate, they generally give their own customers better treatment, and I can't say I blame them.

Also, you apparently have no trade-in if you are contemplating buying online. With no trade, you can do quite well at a lot of dealers. The trade-in is the biggest variable, and that's where most buyers get taken to the cleaners. Right now, there's a huge glut of used cars because all of the discounts, rebates, and "everyone gets employee price" promotions have put everyone and his brother into a new set of wheels. Most new car dealers want another used car about as much as they want a venereal disease, and the price they're willing to pay for it shows that very clearly. So, without a doubt, the best strategy for getting a good price on a new car is not to trade your present car in but to sell it yourself.

    Bookmark   August 8, 2005 at 7:20PM
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I requested quotes on one of the auto internet sites. They were sent to the local dealers. So I pretty much did not receive anything I did not already know from reading the local papers. Basically, that whole exercise was a waste of time. The quotes came really close. The biggest difference is about $300.00. I do not want to do a trade-in for that same reason you mentioned because I do not want to give them that much wiggle room. The way it looks, I will have to pay the price that they ask for locally if I want a new car.

    Bookmark   August 8, 2005 at 8:26PM
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Not much of a surprise to hear that. If you remove the issue of a trade-in, you are usually going to pay just about the same for a car no matter where you buy it. It just stands to reason -- the dealers are all working with the same basic economics of paying the manufacturer X dollars for the car, having to pay their staff, maintain a service department, etc.

This is probably a good time of the year to get into an '05 though. You might be able to save a few extra bucks by getting into one of those rather than an '06.

    Bookmark   August 8, 2005 at 8:47PM
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Thanks, cowboyind. Tell me if I am way off base, but I am thinking since I have to pay the going price anyway, I just as well pay a few more dollars for the 2006 model. If I am not getting a huge discount, does it make sense to buy a one-year old car at about the same price as next year's model? What do you think?

    Bookmark   August 8, 2005 at 9:12PM
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Before you go to a dealer, check out the Invoice Price compared to the MSPR price. On some cars it can be thousands difference. and are good sites to obtain this info.

At this time of year the buyer is in the driver seat. I am looking at a Lexus RX330 and there is at least $5000 diff between the invoice and MSPR price. I told the dealer that the 2005 has already depreciated before it even goes off the lot. I asked him how close to invoice can he get. He met my price but now he needs to find the car with my color choices, etc.
Other dealers are even offering cars at invoice or employee prices, so use this as a buying tool , also.
Never pay MSRP, there's no reason to.

    Bookmark   August 9, 2005 at 11:45AM
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Yes, getting the invoice price off of the Internet is a good idea, but whether you pay that price or not, or how close you have to pay to the MSRP, depends on the supply and demand for the car you're looking at. Yes, on a 2005, you can definitely do better right now than on a 2006, but you'll have to wait and see what happens when that dealer finds the car with the options/colors/etc. you want before you'll be able to say for sure what deal you're going to get. Right now there has been no commitment made because you don't yet have a car to buy. My bet is that the specific car they find will just happen to be quite a bit more expensive than the theoretical one they negotiated with you on. The true negotiation doesn't start until you actually have a car to negotiate on.

Kal2002, you have a good point about the '05 vs. the '06. I think it comes down to how much you drive and how long you plan to keep the car. If you keep your miles low and trade often, you might do better in terms of resale value with the '06. But if you drive a lot of miles you might actually be better with the '05, if you trade it in 2 years, you will have had it 2 years but will actually be allowed essentially 3 years of miles. If you plan to keep the car a long time, you'd be better off with the '05 because resale value is not a big concern to you, and you'd be better off saving the cash now. You're still getting a car that's just as "new" with an '05. The only respect in which it's "a year old" is because the lot will soon be filled with cars that say "2006" on them.

    Bookmark   August 9, 2005 at 12:19PM
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Smack a wad of cash on the salesmans desk, no more you want to spend... tell him to take what he needs for that car, and please hurry.

    Bookmark   August 9, 2005 at 5:15PM
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In order to negotiate a good price for anything you have to know what the dealer price is. As far as seeing the "invoice", that is totally meaningless. The so called invoice that every dealer is so eager to show everyone today is not the true dealer cost of the auto but simply a gimmick to make people "think" they got a super deal when in fact they were most likely taken and I'm not talking about the hold back that they all get to keep regardless of what they sell the car for. Go to a book store and buy a paperback called, HOW TO BUY YOUR NEW CAR FOR A ROCK BOTTOM PRICE. Its a Signet book written by Dr. Leslie R. Sachs. Should sell for less than $10.00. Read this and you will be in a much better position to deal than you are now. I sold cars for a number of years in the '60's and wanted to see if the profit percentage figures used back then were still being used today and sure enough they are. As far as telling a dealer you deal only in cash, that also is meaningless as they would much rather you finance it because of the percentage of interest they receive from the lending institution when you do. And also if you do lay cash on the table, how did you determine that was the amount you should pay? You can't get these figures out of the air, you have to have a way of knowing what the dealer pays. Read this book and find out how. Good luck. Later, Skag

    Bookmark   August 9, 2005 at 8:11PM
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Thanks for all your comments and suggestions. I like Mikie's idea but I am not so sure it works anymore. I used to think cash is KING but now they like to do the financing. The best of both worlds might be to let them do the financing if that helps with the cost of the car and then pay them off with financing from a cheaper source. Since I only plan on changing cars every 10 years or so, I think Cowboy's theory is logical. I will also buy that book as Skag suggested so I will learn how to play their game. Maybe I will get lucky like Garden Graphic Gal and negotiate a price before the car is even found.

    Bookmark   August 9, 2005 at 8:42PM
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I had a friend that despised car shopping. So he did his homework on the invoice prices and went into the dealer and said: "That's the car I want. That's my trade. I KNOW what they're worth. You give me your absolute best BOTTOM LINE price including tax. And if it's too high, I'm walking out. No discussions, no haggling." He always got a good deal.

    Bookmark   August 10, 2005 at 7:24AM
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Update on my car deal~~Dealer and I had agreed on an "out the door" price. I didn't want them to start adding on a bunch of little extras Monday the dealer called to say he found my car "but it is in Louisianna (I live in Georgia) and will cost us $800 to bring it here.We would need some help with this, $200." My response was " If you can't get my car without charging me for it, then I guess I will have to continue to look at other cars, especially with all the deals out there right now."
3 hours later he called to say "We have your car and it will be available on Saturday."

    Bookmark   August 10, 2005 at 8:04AM
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Once you figure out what you want to pay for a vehicle, stick with it until you get it. When I buy a vehicle, I have the attitude that if I walk out without getting the price I want, I won that battle (maybe not the war, yet). Because I never want to feel like I was taken.

Once I had a salesman try to offer me a lease instead of an outright purchase because he wouldn't come to my price. I asked him to show me how a lease was more cost-effective than an outright purchase. It was at that point that he walked me to the door and told me to come back when I was serious about buying a car. I was serious as I bought one the next week at my price from a different dealer. Maybe he should have rephrased his statement to something like "Come back when you are ready to be ripped off so I can get my maximum commission."

    Bookmark   August 11, 2005 at 8:13AM
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We went to Nissan yesterday to look at a 2006 Murano. We were there for an hour and a half while the salesman and his manager did their "dance". They did not even come close to the price we were looking for (which we thought was reasonable). When the manager said, "I'm not out to hassle you, I'm here to guide you", that was the last straw. Why do they put the buyers through this crap?

    Bookmark   May 22, 2006 at 1:37PM
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The computer is a wonderful thing, use it. Determine the invoice price and manufacturer hold back of the car you want. That info is available over the internet. Decide how much over invoice you're willing to pay. Also ask on forums for your particular car what others had to pay. Once you have a number in mind, find the car you want. Armed with that info you can negotiate based on how much if any over invoice you're willing to pay rather than the dealership game of how much off msrp they let you have it for. I paid invoice for my last vehicle in 1998 which was something like $25k. MSRP was something over $31k. Big difference.

You can do the same thing over the computer like you started to do. When they give you a price, if it's too much you can still offer whatever you want. There is incentive for the dealership to sell that way. They can cut out the sales commission.

If you do decide to go the pressure cooker route and go to the dealership, get your financing ahead of time, go in a couple hours before closing, preferably before a day off if they have days off. Make your offer based on invoice, not msrp. Knowing most customers that leave without buying something won't come back, they will want to make a deal. They will also not want to stay after hours to make it happen. That puts more pressure on them, less on you.

Pass on the paint's just an exhaulted wax job that you can buy from their parts counter for $20 or less if you want to do it. Skip the undercoating which is worthless these days. Skip the scotch guard. You can do that yourself for a few bucks. That's what I'd do.

Go get 'em!

    Bookmark   May 22, 2006 at 11:58PM
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Lot's of good advice here.I would stay away from online buying services like They say their service is free,but once they find you a car at the price they advertise,they want you to finance a minimum of 10K through them at a higher interest rate than you could get elsewhere.If it sounds too good to be true,it usually is!

    Bookmark   May 23, 2006 at 6:27AM
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If you do decide to go the pressure cooker route and go to the dealership, get your financing ahead of time, go in a couple hours before closing, preferably before a day off if they have days off.

Second-best car deal I ever made was a couple of hours before the big college-basketball game started on TV. The salesmen were eager enough to get the deal done that they didn't "dance" very long.

Best car deal I ever made started over the Internet. I bought the car the afternoon of New Year's Eve.

That part really works.

    Bookmark   May 23, 2006 at 11:28AM
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The day after the Nissan "dance", they left a message on our answering machine that they "had good news". Didn't say what it was. We are not calling them back.

    Bookmark   May 24, 2006 at 11:44AM
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We recently bought a new Honda. I went to Hondas web sight and got a list of the nearest dealers. I then e-mailed each of them and asked for their "out the door price". I received quotes from 6 dealers and I took the lowest one to the nearest dealer and he beat it by $100.00. This is the first time in my life I didn't feel like I had gotten screwed when I bought a car. I will never do it any other way.

    Bookmark   May 24, 2006 at 2:31PM
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The best tool for buying a new car is the computer.Because you can research to see what people are really paying.But you can check dealer stock.You can locate the vehical you want and know the window sticker price and options before you arive.Forget the cars direct online deals.Deal with the dealer and go to several and the one you want to buy from should be your last stop.

Never mention financing or trade ins until you get there best price.Forget the salesman you will more then likley have to intertain him.But remember he is nothing more then the monkey.He has nothing to do with the price you can buy the car for anyway.All he is there is a host or waiter runner middleman.He has to get everything approved by the salesmanager or owner anyway.So why even mess with him.Let him know you want to deal with the guy who is giving him all his answers.

Ask for the invoice.It will be higher then the online invoice from places like Edmunds.

Alway take a calculator and either a hanky or a small towel.

Get there best price at a few dealers where your least willing to buy.No need waisting to much of there time or you own.Your just feeling the water to get an idea what there price will be.They will realise your not likley going to buy anyway.Because your 50 miles away from your home town.

After you have gotten a few quotes.Its time to get serious and pay a visit to the dealers you want to buy from.Let them know you have been looking around and have recieved a few qoutes.Tell them you decided to give them a chance and say you operate just like the state.Lowest bidder wins.When they ask what kind of prices you were quoted.Say pretty good offers and leave it at that.Say you would rather buy local if they could beat there offers.

There prices will be within a few hundred dollars.But dont let them know that.They might even be several hundred dollars less.But even so say you have to do better then that.

You already know what it can be bought for because of Edmunds invoice.But you want a better deal and already have that figure memorised.Example $22.500 is the what others are paying.He is giving you a price of $24.250 and he is within a few hundred dollars of the other dealers.But you say Your wayyyyyyyyy off!He saids where do we need to be?You say under $22000 knowing your more then likley going to have to pay $22500.Thats where the calculator comes in.Before giving him the answer punch a few numbers.You might not even have it turned on.But let him know your keeping track.

He will give you the line.Oh but our advertisising costs are higher thats why our invoice is higher.Thats when you hand him the hanky or small towel.Seriously I have done this.Had the salesmans rolling on the floor in tears.When I handed the 70 year old owner a towel to cry on.

Never let them think your ancious and never mention financing until its a done deal.Let them know you will go elsewhere.Whenb they give you there so called best price.Example $23000 but you know it can be bought for $22500.Say $22000 take it or leave it.Stand up and say when you come to your sinces call me.Shake his hand and head for the door.He will either stop you or call the next day.Saying $22500 and thats where you want to be.Try for $22000 and if not.You just bought it for your price you set out to get it for.Congradulation you just beat him at his own game.Works for me.

    Bookmark   May 25, 2006 at 9:48AM
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Making a good car buy is always based on being prepared - know the product, know the invoice, the MSRP, or the market's average selling price, etc., and knowing how to make the best deal with the seller. The former is all based on easily conducted research, the latter is based on hard-fought-for experience. I have been through a lot of battles with sellers, but I recently learned from some videos at how to get the upper hand on any seller. Be smart and take advantage of the info available on the web.

Here is a link that might be useful:

    Bookmark   September 30, 2008 at 9:42PM
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