A car negotiation can be one of the most frustrating negotiations that the average consumer experiences several times in their life. In fact, many consumers these days are refusing to negotiate use car purchases — choosing instead to skip the difficult negotiations and go to a no haggle car dealership. However, with a little negotiation training we can all gain the negotiation skills necessary to negotiate car price like a pro.

Here are my top car negotiating tips:

1. Forget the Old Way, Use the Internet — Why go to a local car dealership in person and get the same old run around between the sales person, the manager and the finance person, while they try all of the negotiation tricks in the book on you (good cop/bad cop with salesperson/manager, nickel and diming for floor mats, etc., etc.). You’ve heard that “knowledge is power”, and this is very true in negotiations — if you know someone else has a lower price, then even the slickest car salesman can’t convince you to buy from them. So, why not leverage the information power of the Internet to find out what other prices are available out there. I draft a form email that tells exactly what I am looking for (model, year, options, etc.) and ask for a quote by reply email. Then I send that same form email to many dealers — hey, I’ll drive a long way to save thousands of dollars. I might send this same email out to 30 dealers, as it doesn’t cost anything, doesn’t take long, and only gives me more options — and options are power also.

2. Now, Stick with the Internet — O.k., many dealers still don’t love negotiating over the Internet. Why should they? You’re going to get a better deal, and they’re going to get a worse deal. So, many dealers will respond to emails asking for you to call them or come in to the dealership. I politely tell them that I am a busy person and will not be taking phone calls or meeting in person until we have agreed upon a price for the model and options I specified. By the way, I either leave the “phone number” field blank on the dealer’s email forms, or if I have to put something to submit the form, I don’t give my real number. If you put your real number, you’ll be barraged by calls from 30 dealers wanting to avoid email negotiations. Though it is rare these days, you’ll have some dealers refusing to give quotes over the Internet, or refusing to give their best price over the internet. I tell these people that they are old fashioned and that I will have plenty of offers from more modern dealers — and this is the truth, so don’t worry about not working with these dealers, leave them alone and focus on negotiation methods that will save you money and time.

3. Prepare Before Negotiations — Whether you are buying a new car or used car, there is a world of information on the Internet about every vehicle. Between online “blue book” type sites and sites friendly for car buyers, and just surfing dealer web sites and sites like www[dot]cars[dot]com, you can get a good feel for what the starting prices are for the new or used car you are interested. This also helps to remind you that there are a jillion cars of every type out there, so there’s no need to fall in love with a specific car at any one dealership. It’s a big world — and I personally have paid $200 for a one-way airplane ticket to buy a car for thousands of dollars less, and drive it back home in a day. It’s your hard-earned money, so why not use the free market to save as much as possible, while acting politely and ethical.

4. Keep the Test Drive Separate — If you aren’t sure what car you want, make a deal with yourself — and even better, a friend or spouse coming with you — that you are not going to get involved in purchase negotiations in person after test driving a car. Just go for the test drive, and let the sales person know that you’ll be looking at several cars with several dealers, and that you may be contacting them in the future. This not only helps you escape the pressure of an in-person negotiation on the dealer’s turf, but also helps you come down from the immediate highs of the fun test drive or that new car smell. Dealers know these are weak points for buyers, and it makes Dealer’s nervous when they can’t get you to negotiate under those circumstances.

5. Let Them Know You’re Shopping Around — it’s been shown that merely mentioning that you are working with another Dealer can result in a price drop of hundreds or thousands of dollars. If you’re open to cars from 2 or more different manufacturers, all the better. I say that up front in my form email: “I’m sending this request for quote to all dealers for Honda and Toyota in a 50 mile radius”.

6. Start Leveraging Your Offers — Next you’ll receive your first round of offers. This can range for some dealers quoting the full Manufacturer’s Suggested Retail Price (ridiculous and meaningless) to others realizing they’re going to have to deal to get your business. I will let their offers come in, then politely tell high priced dealers that “I’ve gotten an offer (or offers) in the $29,xxx range for the same vehicle and options, so please give me your best offer”. I say it just like that, and don’t state the exact price or which dealer(s) made those offers. That way, the high dealer doesn’t know if the low dealer offered $29,999 or $29,000 — and not naming the dealer lessens the possibility that the 2 dealers might speak about how to work with you. I know I am doing a good job when some dealers start to say “that’s hard to believe, because that is below invoice”. I politely remind them that I know there are various incentives and other ways that a dealer can sell below invoice and still make a profit. My personal choice is not to bluff about false offers from other dealers — you can still be an aggressive negotiator without being dishonest. I will leverage the low offers for a couple of rounds with dealers that start moving their price (most will, so don’t waste time with stubborn high offers), and will play quotes for one brand of vehicle against dealers for the same vehicle, then once I get those low I’ll play quotes for one competitor against a dealer for the other competitor — you could vary the order of that.

7. Keep the Price Separate — Don’t allow dealers to avoid the bottom line price by throwing monthly lease and purchase payment numbers at you. Even if you may want to finance or do a trade-in, insist in focusing on the purchase price only. Getting pre-approved from your bank or credit union may give you more comfort (so you already know you have financing, and what cost). It’s o.k. to let them give you monthly payment quotes too, but always insist on focusing on price. I think it’s best to completely avoid trade-in talk until the price is set. Speaking of separate pricing, be sure that the dealer is not hiding some hidden prices (destination cost, dealer prep, documetation fees, etc.) — you want to be sure each quote includes everything but tax and title, so you are comparing apples to apples.

8. Allow Some Time — Unless you absolutely have to rush, give yourself a little time to negotiate. I let dealers know that I am serious about doing something soon, but that I am in no specific rush. If dealers try to use time pressure negotiation tactics on you (“good for today only” “limited time offer” etc.) don’t fall for it. As we mentioned above, it’s a big world with lots of cars, and the next sale is always not far away (Memorial Day Sale, Summer Madness Sale, 4th of July Sale, Labor Day Sale, Back to School sale, Christmas sale, New Year Sale, Valentine’s Sale, Spring Break Sale etc., etc.). Actually, often car dealers are facing more time pressure than you are — end of month for commissions, end of year for commissions/bonus, end of model year for depreciation, etc. Also, be aware that there will be some good dealers who are still a bit slow responding to emails, so allow plenty of time for their offers to come in.

9. The (Almost) Final Round — O.k., so you’ve gotten your initial offers, and you’ve leveraged those offers to get other dealers to lower their prices, and had dealers from competing brands lower their prices too. Once you start to see that prices aren’t coming down much any more, then you may choose to be more specific about prices and say “I’ve been quoted $28,500 for the same vehicle, can you beat that price?”. Also, once you’re near the final price, you might start asking for deal sweeteners — a promise of a loaner during repairs, an extra dealer accessory (luggage rack, etc.), free oil changes or extended warranties. But, keep your focus on the price.

10. One Last Shot — Once your at your best price, you might want to give another dealer who didn’t keep up with the price negotiations one last shot at your business. For whatever reason, you might prefer to do business with a dealer that is closer to you, has a better reputation, offers more service, etc. I advise not making this drawn out, but to simply say “I am about to buy the same car from the other dealer for $28,223, is it possible that you could look at the numbers again and see if you can find a way to beat that?” You’ll notice that I state that in a polite way, which makes it easier for that person to save face and come back to you saying “we looked at the numbers again and we can sell it to you for $100 less than that.” I don’t advise stretching this out or doing it more than once — at some point it is just time to get the deal done and move on to other things, and if you do it this way you’ve acted fairly and have nothing to be ashamed about.

Once you’ve gotten your best possible price, you can then finalize financing arrangements. Most dealers of the same brand have similar options, so I think you can focus on this at the end. As mentioned above, don’t hesitate to call your bank or credit union early to know your guaranteed options. Get a complete detail of all charges in writing by email or fax before going to the dealership, with assurances that everything (including floor mats) is included in the price detail, and that it is completely approved by everyone in the dealership who needs to approve it. If you get to the dealership and they try to change anything or say it’s too good for their manager to approve it, walk out immediately. I do advise you to test drive the specific vehicle you are purchasing right before signing the contract (if buying a used car, you might arrange take it to a mechanic before signing).

Negotiating to buy a new car or used car can be stressful, but if you use the power of the Internet to increase your knowledge of price, to increase your dealer offers, and to negotiate from the comfort of your desktop or laptop, you can avoid most of the stress and get a great deal!

Want the insider’s edge on your next car purchase? Click here to get inside the dealer’s playbook of persuasion with these car buying tips from Taking The House Edge.

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