Auto Loans

How to Negotiate Car Price

Let’s face it: No one except the former president of the high-school debate team enjoys negotiating with a car salesperson. Sure, there’s a special kind of joy that comes with the thought of buying a car — picturing yourself behind the wheel of this or that model, the colors, a moonroof, heated seats … it’s all very alluring.

While visiting the dealership and test-driving can be exciting, you will eventually find yourself at that desk, with the salesperson, feeling as if you’re chained to the chair until you sign on the dotted line.

And that’s where so many mistakes can occur, especially if you haven’t done your homework in advance.

To help you put your best foot forward, LendingTree asked experts to weigh in on everything from comparing financing offers to timing your purchase to get the best price.

Knowing what is negotiable — and what isn’t

Not everything is negotiable when buying a car, but being aware of what is can put you in the driver’s seat when it comes to negotiating.

Price, trade-in value, loan or lease terms, an extended warranty and a host of dealer bells and whistles are all negotiable, according to Ali Omoomy, founder of, a negotiating service for car buyers.

“You may do well on one or two items, but [you] could give it all back and then some if you are not prepared to negotiate for all the of the items,” he said.

There are a few things that are usually not negotiable, including the Guarantee Auto Protection Insurance (which you do have the right to refuse), Advertising Fee, Title and Registration, Documentation Fee and Sales Tax. Be sure to review the fees carefully on the agreement to ensure that they are accurate. If your dealer is not giving you a price you think is fair, you can ask them to subtract an amount equal to these fees from the sticker price. There is no guarantee that they will be amenable.

Effectively communicating with a car salesman

Before you visit the dealership, arm yourself with a working knowledge of the vehicle you want to test drive, including features that are of interest to you, and of comparable vehicles from other brands.

Competitive pricing of a particular make and model is particularly important, says Connor Swofford, co-founder of Paytronage, a new online marketplace for income-share agreements (ISAs). But he cautions against jumping right into the numbers too quickly.

“Try to take as long as possible to start talking dollars,” he said. “Speak about what you’re looking for in a car, how the one you like meets some of your criteria, but not all of it. This will help you later on when you finally decide to talk sticker price.”

Tactics for negotiating car price

1. Know what you want to pay—and stick to it.

Once you know the type of car you want, search sites like and, which can provide accurate “true market” estimates for new cars. This will give a good idea of a fair price.

Knowledge of a car’s price range should inform how much you intend to spend.

A good rule of thumb for setting a budget is the 20/4/10 rule, which boils down to putting 20% down, financing no more than four years and spending no more than 10% of your income on transportation expenses. The 10% should include your car payment, gas, insurance, repairs and maintenance and any other associated costs.

 2. Secure financing ahead of time.

There’s no better bargaining chip than offers from other lenders. Prior to visiting dealers, explore your financing options and get pre-approved for financing.

“One of the most overlooked negotiations in buying a car is the financing,” said Bobbi Rebell, certified financial planner and host of the “Financial Grownup” podcast. “Before you even set foot in the dealership, shop around for the best options. Even if you plan to finance through the dealership, having the information, and the pre-approval, will help you get a better rate.”

Start with a financial institution that you currently do business with because they will want to expand their relationship with you. Rebell also said that your bank will often offer lower rates if payments are withdrawn directly from your account.

From there, expand your search to other lenders. You can search and compare loan offers using LendingTree’s auto loans tool, or do your own search.

Once you’ve been pre-approved for several auto loans, you’re ready to take your offers to the dealership.

“Don’t be shy about letting the dealer know you have other options. They will often match or beat an outside offer,” Rebell added.

3. Time your purchase correctly.

When you shop for a car, time can greatly affect what you pay.

“Many salespeople have monthly quotas that they need to meet, so coming back to them when they’re under pressure to perform may result in a lower sticker price,” said Swofford.

If you can wait, deals are at their very best at the end of the year. Dealers are looking to clear inventory of the current year’s models and the prices on those models will reflect that. Data from Edmunds for 2012 through 2016 shows that the average discount in December is 6.1% off the MSRP and 6.0% off in November. October is a close third with 5.9% off.

4. Don’t get caught up with the add-ons.

Extended warranties, tire protection, window tinting and pinstriping are examples of extras or add-ons that your salesperson may press you to add. They will often be presented as unique to your sale or available only that day, but Rebell suggests holding back.

Remember that these add-ons are voluntary. While the sales person may give you the hard sell for the extended warranty, for example, purchasing one is not required, according to

“Be wary of any last-minute arm-twisting on those extras that you are not sure you need,” she said. “Odds are you can change your mind, and they will still be available in a few months if you decide you want the extra maintenance plan or other ‘perk’ they want you to buy.”

What to consider when negotiating for a used car

If you are in the market for used instead of new, keep in mind that the price of a new car can be easier to negotiate because you can compare identical versions of the make and model. It’s highly recommended to get an independent appraisal before you head to a dealership to discuss a trade-in.

You can also do some homework by using Kelley Blue Book or AutoGravity to gauge a car’s value before you negotiate a trade-in.

The bottom line: You should walk into the dealership with a good idea of your car’s worth.

How does negotiating a trade-in work?

If you have a vehicle to trade in, get a sense of how much your car is worth — before visiting any dealers — from sites like and Dealers will lowball you, so be ready with those numbers.

Look separately at how much you are being offered for your trade-in and how much you are being charged for the new car. Sometimes dealers may combine the two numbers, which might confuse you.

“Be ready to negotiate, and be ready to walk away from the deal if you are not getting the price you are looking for,” said Aleks Bogoeski, vice president of sales and dealer network at AutoGravity.

He also suggests selling your used car beforehand to an independent seller, rather than trading it in a dealership. This can be time-consuming, but it can potentially get you a better price.

Extra discounts

There may be additional ways to save that won’t be readily apparent.

For example, you may find discounts for students, members of the U.S. military, teachers and AAA members. Some manufacturers like GM, which includes brands like Chevrolet, Buick and GMC, provide discounts to recent college graduates. Jeep, Chrysler offers discounts — $3,000 on average — to members of the National Education Association, through the NEA’s Auto Buying Program. And AAA members can save an average of $3,383 when a car is purchased through a certified dealer.

Before you sign

By the time you are ready to buy your car, you will likely have been at the dealership for what feels like days. But don’t sign on the dotted line in exasperation. Take the time to read carefully through the paperwork to ensure that it includes everything you discussed and does not include things that you didn’t.

“For example,” said Rebell, “they may include a pre-paid maintenance plan that they casually mentioned but you did not agree to.” If there’s something that looks out of place, or that you do not understand, ask.

Bottom line

People who sell cars are under a lot of pressure to sell. By being aware of factors like competitive pricing, trade-in value and financing options, and by understanding that you are under no obligation to commit, you can set yourself up for success.

And if you can’t bear the thought of negotiating car price, you can always hire someone to do it in your stead. Car-buying services like Authority Auto and Hopscotch will do it for you, for a fee or a percentage of what they save you.


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