Tips for negotiating on new vehicles

[Smoke24]

My son and I were recently in a car accident, and today we found out that our car was totaled. We loved that car—it was a 2023 Subaru Outback Wilderness, and when we bought it, it was six months old with only 6,000 miles on it. We felt like we got such a great deal and it was just the perfect car for our family (even my favorite color!).

I’m incredibly grateful that my son and I are okay—it was a pretty bad accident—but I can’t help feeling bummed about losing the car that kept us so safe.

We’re really not excited about car shopping because we haven’t found anything that we like as much as our Outback. We had talked about replacing our truck (a 2012 Dodge Ram) with a newer one this year, so we are thinking we may go ahead and consider doing that now.

We typically buy vehicles that are 1-2 years old, but financing a used vehicle seems tough right now since interest rates on used cars are pretty high. There are several new 2024 Rams at a local dealership that we’re considering. Any tips on getting an above-average deal in today’s market? How much negotiating can you do on new vehicle prices?

[LCDR]

My last truck I used the GM build and price site to build my truck. Then I requested quotes from all the dealerships within one hundred miles. I stated I was a cash buyer and asked their best price to order that truck for me.

Most of the dealerships tried as hard s possible to get me to come in person, saying they had trucks on their lots very close to what I wanted. Essentially they were lying - the trucks on their ion line inventories were all short beds when I definitely wanted a long bed. One said they would throw in a bed extender and their short bed would be just as functional as a long bed.

But I held my ground, did not go in person, and eventually got a firm price from a local dealership. I signed the paperwork all on line, sent a $500 deposit, and two months later the truck I built was delivered to my house by them. I never laid eyes on any sales person.

[Lost_Shoe]

You have the most negotiating leverage buying a vehicle off the lot that has been sitting there a while (new or used). To get a general idea of what’s out there, use a search website like cars dot com. After you have a good idea of what make and model and year you want in your price range, look up the inventory on dealership’s websites. Look for information indicating how long the inventory has been sitting. Finally, if you are buying a new vehicle, look up and research manufacturer incentives; these are discounts provided by the manufacturer that the dealership must pass on the customer. Incentives can be thousands of dollars, but they are only offered for certain periods of time for certain models. For example, during “Chevy Truck Month,” Chevy offers discounts for trucks during that time period.

Make an appointment and go to the dealership armed with information about the vehicle you are interested in. Always test drive the vehicle. Do not talk about the money until you get back from test driving. Before making an offer, look up the sale price on the dealership’s website as well as any search websites where the particular vehicle is listed: the lowest advertised must be honored by the dealership. Subtract any applicable incentives and discounts. Then, make an offer that is lower that that number. If the vehicle has been sitting for a long time, say, a year, I suggest offering 10% off MSRP. You could try offering even less. The salesperson will respond with “I need to talk to my manager.” When they return, they will either accept your offer or say the best I can do is “x”. Depending on how you feel it is going, you can offer another, higher number, or accept their number, or walk away. Passing the ball back and forth a few times generally lands at a number acceptable to both sides. If you are prepared to walk away if they decline your low ball offer, you will have a better chance of success. If you want to get the deal done now, you will generally need to go up from your original offer.

One thing to watch out for: the vast majority of people buy on a payment plan, and salespeople will try to negotiate with you in terms of monthly payments, rather than the sale price. You have to explain that you are paying cash and turn the conversation back to sale price.

Another trick is that they will try to get you to pay for all manner of extras such as extended warranties, upholstery protection plans, prepaid maintenance costs, etc. My suggestion is to think about this ahead of time and have a plan going in there as far as what you want and what you will decline. Anticipate that they will be overly pushy, and don’t be alarmed if they are actually rude to you if you decline. Stay the course. You can always buy these products at a later date. They are pushy because they can get people to part with thousands of dollars this way, potentially negating all of your negotiation efforts.

[2DogsFarm]

I’ve found CarMax is true to their model.
Prices may be on the higher side, but they don’t play the “I have to ask my Manager” game.
No haggling.
I’ve got 2 cars from them & unless things have changed in the last 5+yrs, I’d use them again.

I did get my SUV from a local dealer, looking at their website.
They didn’t show exactly what I wanted, but I called & was told there was a newer trade-in that fit my list.
Pretty sure I flummoxed the salesman by asking to see the transmission cooler instead of the pretty interior he wanted to show me
I “negotiated” only by telling him the most I could afford as a monthly payment.
Ended up with a 5yr loan instead of the 3yr I’d have preferred. But I drove it off the lot, directly to my mechanic, who gave it
Going into year 3, no problems.

[endlessclimb]

My negotiation tactic is always to have the cash in hand. “This is what I brought, this is what I can spend. Deal or no deal.”

[RedHorses]

It might be worth doing some calculations of what the higher interest will cost over the life of the loan versus how much less you’ll pay for a 1-2 year old car.

[MHM]

The other tactic is to try to go in near the end of the month, when they have extra incentive to try to move vehicles to meet their monthly quotas. Ditto for the end of the year, although that will probably not help in this case.

If you do your online research and find out which dealerships near you have exactly the vehicle you want, you can call each of them and say: I can buy that same vehicle for X price at another dealership. Can you beat that price?

And for sure, being prepared to stand up and walk out is a really helpful negotiating tool.

Good luck!

[Arlomine]

In addition to the excellent advice above, here is one more tidbit.

Yes, if you buy new in particular, they will try to get you to do a payment plan. If you agree to do a payment plan, the actual price we will pay for the truck is substantially lower. As in I mean, the base price for the truck. If you stick with a payment plan, no it won’t be lower overtime… But there’s a way around that.

I asked if there was a penalty or any kind of disincentive if I paid the truck off early. In my case, there was a disincentive if I paid the truck off BEFORE six months of making payments. I did quick math and discovered that the price that I would get If I paid in full and drove off the lot was Still quite a bit more than if I set up a payment plan, paid for six months on the payment plan, and then paid the truck off completely. So that’s what I did. Worked out just fine.

[MHM]

Ooo, good one. With the added enjoyment factor of outmaneuvering the car dealership. Lol.

[dmveventer]

Second the suggestion for CarMax, I had a great experience with them last year. No haggling, no pressure, and you can pick out your exact car online and have it shipped to your local store.

Shop around for financing. I got a great rate through my credit union so I’m still coming out ahead compared to a new car with 0% interest. It helps that I was shopping for a less popular car - a lot of the top brands aren’t that much cheaper used vs new these days, but in my case I got a great deal going with the previous year’s model.

[LookinForSpace]

Make sure you are negotiating on the ON THE ROAD or OUT THE DOOR price! Otherwise, they’ll agree to a price, then tack on all sorts of extra fees to bring it up to what they want to sell it for.

Do not discuss monthly payments, as they’ll lower the monthly payment, but again, raise costs in other ways.

CarMax is easy, but pricey. You can get a much better deal (in the thousands range) by going elsewhere.

Know EXACTLY what you want before you walk in the door. Don’t let the salesmen talk you into what they have. Or talk you into a more expensive vehicle.

Do your research ahead of time. Look up the vehicle you want, with the features you are definite on, and the mileage (if used), then check the SOLD prices, NOT the asking/listed price. MRSP is useless, ignore it. So is the NADA price. If the dealer’s vehicle has more options, don’t let that raise your offer, don’t pay for anything you don’t need.

If they won’t meet your price, and you’ve researched enough to know it’s viable, LEAVE. You can leave at ANY point in the negotiations, even after you’ve put down the $500 deposit – that deposit should be refundable.

I would suggest finding the vehicle with the features you want online, going to the dealer who has it on the lot, and go from there. Or better yet, deal with them online and expand the distance that you’re willing to drive for it.

Good luck!

[Smoke24]

Thank you all for the great advice! This has been really helpful. I’m familiar with negotiating used vehicles, but I’ve never personally purchased a brand-new vehicle, so I wasn’t sure how much flexibility there is on pricing or if MSRP really matters. You’ve all shared some great insights!

I think we’ll consider both new and used options. We’ll need to take out a small loan to finance part of it but should be able to pay it off by the end of the year—but still factoring in interest rates as part of the decision due to the general uncertainty of current times. I wish we could wait until the end of the month, but with only one vehicle for three drivers in our home (my husband, my teenage son, and me), we may need to move forward sooner. We do have a rental that is covered by insurance, but I need to see how long we are able to keep it. I believe our claim payment will be sent sometime in the next few days.

Thanks again for all the advice—I really appreciate it!

[Belmont]

The thing that helped us most was getting pricing from other, larger dealerships within 2 hours of us. We took printed offers (most of them I just got online through a “rep” or robo rep from the company) and brought them with us to the negotiating table. They price matched the lowest offer, and I also went in with my own financing (from two different banks, one a smaller credit union, the other Capital One - they “couldn’t take the smaller credit union” but couldn’t say no to Cap One). Also, don’t let them say they can’t give you X interest rate if you don’t get the warranty, especially if you walk in pre-qualified and the loan ready to go in hand!

In the end - I walked off the lot with the exact car I wanted, under MSRP, brand new off the trailer, all within my budget. We also brought a large cash deposit, but I really don’t think that changed a lot. Good luck to you! I HATE car buying with a passion.

[Smoke24]

This has been so helpful! We checked with our credit union, and their rates are far better than I expected for used vehicles. So, my husband filled out the app online and we are now pre-approved. Signed the paperwork to settle the claim today, so we should receive payment sometime tomorrow. I am feeling better about vehicle shopping, and maybe even a bit excited!

[Willesdon]

Bit like bargaining in the souk in Marrakesh. Know what you want to pay, know what is locally available so you can move on to another stall (generally pursued by the first stall holder calling you to come back), maintain a magnificent distain as the stall holder bigs up their goods and, sneaky one, take time negotiating for one thing whilst intending to buy something else then suddenly switch to your real target (often the stall holder will immediately offer a low price fearing a “no sale”). Personally, I find eating something, like peanuts, drives the salesman into a competitive frenzy as it appears I’m just not that interested, but that might be harder to do in a car lot compared to a Moroccan market. You might also find your husband or son can get a better price since, as we all know, lil’ ladies and girlies don’t know much about cars. Or, of course, that might cut the other way … Assess your opponent.

Last time in Morocco, I swapped a cheap battery watch for a nice tribal rug that I sold when I got home. The bargaining was the fun part as the trader really wanted that watch. Both sides were very satisfied with the bargain.

[Jo]

If you aren’t up for negotiating, check out Tomi at https://www.delivrdto.me/ I follow him on social media and he’s great about sharing his tips and tricks - or you can outsource negotiation directly to him.

[2DogsFarm]

@Smoke24

We do have a rental that is covered by insurance, but I need to see how long we are able to keep it.

I’m assuming the other driver’s insurance is paying for the rental.
Even if they’re not, I was t-boned at an intersection. I wasn’t badly hurt, but my car was totaled.
At the time, I worked 40min from home.
I was still shopping for a replacement when the insurance told me they were terminating the rental.
I told them they could then pay my salary until I got another car.
They extended the rental.

[Lusoluv]

Never tell a salesman you’re paying cash! You have more negotiating power if they think you’re financing the car - that’s where they make their money - on interest charges. Know what your bottom line price is, do not buy more options than you want and dealers have discounts if you finance. Sign the paper work, down payment and when the first payment bill arrives, pay off the entire amount. The End.

[MissusS]

I just bought a new CRV. Honda (in Canada at least) has apparently pushed MSRP down so far that dealers don’t have room to negotiate - they don’t have enough profit left below MSRP. I call BS.

I went to a local dealer to check out the vehicles. I asked for a quote for two trim lines, then said great, thanks, I appreciate it and will think about it. The “best and final” prices were about $3500 difference between the trim lines and frankly I would have been happy with the cheaper one but there was some convenience factors that made the more expensive one appealing to me as well. But I was not in a hurry to buy.

Cue the multiple text messages from the sales person over the coming weeks. I finally texted back and said if you can do X amount out the door for the higher trim line ($500 more than the price of the lower trim line), you’ve got a deal.

He responded to say “good news, my manager says we can do X+500” and I wrote back that it was too bad he couldn’t find the other $500 off the price, as I wanted to give him my business.

… Crickets. No response from him.

Meanwhile, I had emailed all the dealerships in the province to ask their best out the door price on the vehicles. Everyone was coming back around the same amount. Some were slightly higher because they included things like undercoat, etc that they wouldn’t discount at this stage in the negotiation.

I then pulled my ace card… my retired dad who is a tried and true car guy. He went into his local dealership (about 3 hours away from me), chatted with the sales manager (he knows him from helping another friend buy a Honda there a year or so ago), and just generally made it known he might have another buyer (me).

After my local dealership said X+500 my dad texted his local dealership and asked if they would do X-500 and … they said yes. So I got the higher trim line model, at the price of the lower trim model.

The dealership I purchased from bent over backwards to get my business, including coming in on a Sunday (dealership closed) to finish the paperwork with me because I was in town for the holidays then.

All that to say… shop around, and don’t be afraid to offer a lower number. And there is always room for negotiation, even if the sales person says there isn’t.

[f0rf31t]

Offhand and having only been able to afford used, I don’t know all the ins and outs but I believe there are some credit unions where, if you’re a member you can sometimes get better interest rates but also be able to get a better total price.

I know I put my car loan through a credit union for the sake of having a better interest rate. I want to say I remember seeing something about being able to get a new car at a better price somehow through them but I don’t know how all that worked.

Ah, I see people more knowledgeable than me have mentioned credit unions!