Buying a new car often involves an intricate dance between the buyer and seller over price. But understand this: car sellers know their stuff. Here are four negotiating tips that can help you get the best price:
Negotiate selling price, NOT monthly payments
Car companies love to talk about “low” monthly payments on a new car purchase or lease. But that only disguises what you are really paying for the vehicle. If the salesperson asks what you’ve budgeted for monthly payments, or inquires about your finances and budget, politely say you want to talk about the selling price first. You can discuss financing later.
Negotiate from the invoice price, not the sticker price
Invoice is what the dealer paid for the car; sticker is the price with a sizable profit. Invoice prices for nearly all cars are available by searching online. Even if you don’t know the invoice price, you might offer to buy the vehicle for a certain amount “above invoice” (say, $200 for example). The amount you agree to might be higher, but you want to start low.
Be ready to buy – and say so
Tell the salesperson you are ready to make an offer. You should add that you aren’t in a hurry so you don’t convey that you have to take the deal they offer, but say that if the offer is good, you’ll sign right away. If the salesperson asks for more than you want to pay, remind him or her that you’re offering to close the deal quickly with minimum effort.
Never bid against yourself
This is a vital rule of negotiating a price on just about anything. Never raise your bid until the other side makes a counteroffer. If you up the price on your own, you are just defeating yourself. And when you do raise your price, only do so in small increments of $100 to $200 at a time.