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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How to Negotiate a Car Price: 5 Tips to Succeed

Updated on:
Content was accurate at the time of publication.

While the thought of haggling with a car dealer can be enough to keep some people away from a showroom, there are ways to get the price you want. Often, a little preparation and legwork makes all the difference. It can even save you some money. Read on to learn how to negotiate a car price and get some insights on how to beat salespeople at their own game.

Whether you’re not sure what car you want or you’ve been eyeing a particular model for a while, here are a few tips to help you succeed in your negotiations.

First time car buyer? Here are 8 steps to buying your first car.

1. Research the numbers

Usually, when you see the sticker price on the window of a car, that number is the manufacturer suggested retail price (MSRP). As the name suggests, the MSRP is the price that the manufacturer suggests the retailer sell it for with extra features added.

A car’s MSRP is not the lowest price a dealer can accept, and you can use it as a starting point for negotiations. With that in mind, it’s important to do some research to figure out the car’s value. You can find this information by visiting industry resources, such as Kelley Blue Book, NADAguides or Edmunds. Keep in mind that some external factors, like supply and demand, can also influence value.

While you’re at it, be sure to look up a few other numbers to give you a better sense of your overall bargaining power:

  • The trade-in value of your current vehicle: You can do this by visiting the industry guides above.
  • Any incentives you might qualify for: This can include special financing or car rebates. You can do this by visiting dealer and manufacturer websites.
  • Estimated local sales tax: This number can vary by state or county, but it’s typically the same as your state sales tax.
  • Any dealer fees: These can vary based on your state and which dealership you visit. Dealer fees can include documentation, inspection and emissions fees.
Use our auto loan calculator to determine how much car you can afford.

2. Get preapproved financing

It’s smart to get a preapproved auto loan before heading out to dealerships. A preapproval can be a handy tool to help you ensure that you’re keeping your purchase within budget. While preapproved car loans aren’t exactly firm offers, you’ll likely receive the same or similar rates when you close on your loan.

A preapproval also gives the dealer a price to beat. Once the dealer sees your preapproval offer, they may try to offer you in-house financing with better rates or terms to compete with your preapproved car loan.

3. Shop around for car loans

Once you have a better idea of your budget for a car, it’s a good idea to shop around. This can help you find the most competitive auto loan rates and features from lenders. You can visit a dealership in person or do some online car shopping.

The first step is to find reputable dealers who have your desired make and model in stock. Be sure to read reviews to learn about other customer experiences. You can also contact your state’s consumer protection agencies to find out if any dealers have unresolved complaints against them.

Once you have a handful of qualified dealers, ask each of them to send the “out-the-door price” to you in writing (more on that later). Be sure to give each dealer the same information so you can make an apples-to-apples comparison once you have the quotes in hand.

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4. Focus on the “out-the-door” price

After you’ve gathered all your information, it’s time to head to your top-choice dealership. Make sure to bring all your paperwork in case the dealer asks to see it.

At the dealership, ask to see the out-the-door price for your desired vehicle. A car’s out-the-door price is the total price of the car, before financing, including any taxes and fees. Also ask to see an itemized breakdown of the costs so you can see how the dealer arrived at that figure.

It’s important to focus on the out-the-door price since some dealers may get you to focus on other metrics, like the monthly payment amount. In these cases, dealers may use the monthly payment to fit your budget, though this may mean extending the length of your loan. This can lead to you paying more money in interest in the long run.

By concentrating on the out-the door price, you can stay focused on the total cost of the car and lowest price the dealer is willing to sell for.

5. Don’t be afraid to walk away

There’s no getting around the fact that buying a car is a large financial commitment. It’s one that can feel even more daunting when a salesperson is pressuring you or telling you that a deal is only good for a limited amount of time.

But it’s crucial to remember that you have the upper hand. If you’re uncomfortable with the vehicle you’re about to buy or the price tag attached to it, don’t be afraid to walk away. Although it may not be an easy choice if you need a car immediately, there’s no harm in considering another car or another dealership.

If the above steps don’t sound appealing to you, consider choosing a no-haggle car dealer instead. Many dealership chains, like CarMax or Carvana, sell vehicles at a non-negotiable fixed price.

While this can certainly lead to an easier car-buying experience, remember that you may end up paying more for a vehicle than you would if you negotiated beforehand.

Now that you’ve heard our best tips for negotiating on a car price, it’s time to counter any tactics from car salespeople. Here’s what you need to do when you get to the dealership.

  • Prepare for a waiting game: Buying a car can be a long process. Typically, before a salesperson can offer you anything firm, they have to run it by their manager first. This can lead to long pauses in the negotiation process. To combat this, turn waiting into a break. Come to the dealership prepared to stay for the long haul.
  • Counter the monthly payment conversation: Your dealer may ask what you’re hoping to pay for your car each month. Instead, tell your salesperson that you’d prefer discussing the car’s out-the-door price and fair market value. If need be, you can always discuss refinancing your car loan down the road.
  • Counter the hard sell: Do your research ahead of time and bring paperwork with you to justify your assertions. That way, if you have a better deal in hand, you can show it to your dealer. Salespeople may take you more seriously if you can back up your asks.

Yes, you can negotiate on the price of a car. However, it helps to do your research on the vehicle’s fair market value and out-the-door price beforehand so that you know how much room you have to haggle.

When negotiating with a dealer, focus on the out-the-door price instead of any other payment metric. This will keep you focused on the car’s purchase price instead of other factors that may be inflatable. You can ask for smaller car loans to fit your budget, though you may have to sacrifice some vehicle features.

While there’s no hard-and-fast rule for how much you can knock off the price of a car, there are some factors that are commonly negotiable. These include annual percentage rates (APRs), vehicle trade-in value, the repayment terms and any optional add-on products. In contrast, you can’t negotiate taxes, title or registration fees.

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