First-Time Buyers: How to Negotiate

BuyNewOrUsed_Ingram_Publishing-Thinkstock.jpg
Ingram Publishing/Thinkstock

You have figured out which car you want, found a few examples and are ready to reach out to dealers. How do you negotiate for your first car? It can be a tricky process, regardless of whether the car is new or used. We asked Cars.com editors, who have collectively bought dozens of cars over the past decade, for some tips. Here's what we came up with:

Related: More #FirstTimeBuyers Advice

Research before you go, but be flexible: A car is a major purchase, and it deserves a lot of research before you hit the showroom.

It's all about being knowledgeable. Know what your trade-in is worth from the high end to the low end. Know exactly what car you want and what the price should be. Research the incentives. Go in armed with as much information as you can gather.

Be flexible. You won't have much leverage if you want that Oxford green wagon with the moonroof and there's only one near you. On your prospective model, be flexible on features or colors, and you may be able to grab a deal.

Start with the out-the-door price: For dealers, ask via email for the best Internet price out-the-door, meaning the total of price, taxes and any fees. That should be your starting point for negotiations, not a price before fees or (worse yet) a monthly payment.

You might be surprised to find that a dealer's initial offer is the best one, but you won't know it unless you shop around.

Shop around: Don't contact only one dealership. It's better to find several candidates at nearby sellers, create a spreadsheet with the details and status of negotiations on each car, and ask for written (i.e., emailed) confirmation of the deals you make over the phone.

If you're shopping used cars, gathering competitive examples can help you gauge the appropriate price. If you're transparent with each seller that you're considering other similar cars, it could give you leverage.

Use the Cars.com app to show salespeople your list of 10 or so cars and where theirs falls as far as price and miles. If there's a higher trim level with the same miles for less down the street, that's a good way to get them to agree to a lower price.

For used cars, truly understand its condition: Get your trusted mechanic to inspect it, especially if it's out of warranty.

Check every switch, all exterior lights, USB ports and folding seats. Look for scratches, wheel blemishes and other wear and tear, and use those conditions to negotiate the price if it isn't absolutely perfect.

Any reasonable seller should let you take the car to your mechanic for an inspection. Make an appointment, and your mechanic will likely be able to find what the average buyer would miss. A good inspection will test things like engine compression, which can indicate age and significant wear. It may cost you $100, but the problems it reveals can save big headaches down the road.

Be willing to walk away: If you don't think the seller will work with you, you should always be willing to walk away.

Walk away if the negotiations are not going the way you want, or if you're turned off by the salesperson. Bear in mind that they want to sell you a car, now. Understand that today-only deals are often a sales tactic, unless there are incentives ending that day. Do your research to know if that's the case.

Need a loan? Get preapproved: Unless you plan to pay cash, it's a good idea to know how much you can borrow, and even have your loan prepped before you see the dealer. Dealerships advertise extra-low interest rates, but it's likely that only shoppers with top credit scores will get them, so it doesn't hurt to have a backup in place.

Younger buyers may not get the best interest rate best available because they lack a credit history.

Getting a qualified co-signer, like a parent, can help you get a lower rate. Because a dealership wants your financing business, they'll likely try and match or beat whatever preapproval you have.

When it comes to extras, know your options: After you agree on a price, a dealership may try to sell you accessories, extended maintenance agreements, service contracts and even car insurance. Be sure you know what you really need and how much these add-ons might cost you; carefully consider any before you sign.

You can negotiate the price of those warranties, too, but you should be mindful of practices like extending your auto loan by months or years to pay for them. If your monthly payments don't change, that extended warranty may see like a great deal at the time. But those extra months will prolong your car payments and often add interest to the total loan.

Be friendly: This isn't combat. At the end of the day, treat every salesperson the way you want to be treated. The Internet has given consumers more tools to negotiate than ever before. Many salespeople we've worked with understand that, and they're usually reasonable about the negotiation process.

It's best not to be too adversarial. You don't want an unpleasant salesperson, and he or she doesn't want an unpleasant customer. It works both ways.

In the market for a “cheap” car? Find cars priced at $6,000 or less near you.

Advice Car Buying First Time Buyers

Senior Consumer Affairs Editor Kelsey Mays likes quality, reliability, safety and practicality. But he also likes a fair price.  Email Kelsey