How to Negotiate With a Car Dealer

Negotiating with a car dealer is complicated, and for many people, it’s unpleasant — for good reason. No one wants to pay more than they have to, and cars are all but assured to depreciate except in the rarest of circumstances. On top of that, car loans are weighted so you pay mostly interest initially, which means you don’t have much equity in the vehicle for a long time.

Related: Should I Buy a New or Used Car?

If you’re intimidated by car buying, we can help. Our expert advice and tools can help you boost your negotiation skills and make the best possible decisions as a buyer.

Before Negotiations Start

Research Models: Knowing what each car has to offer is the first step toward negotiating a good deal. You should aim to walk onto the dealership lot with all the swagger of, “I know more than you.” Use our research section to compare vehicles in a particular class, such as minivans, compact cars and full-size SUVs, and pay attention to things like gas mileage, MSRP and other technical specifications to help you choose the right vehicle for your needs and budget. Compare warranties, as well, including extended warranty options.

Compare Models Side-to-Side: If you’d like to whittle down your shopping list a bit more, our head-to-head comparison tool can help you compare two cars’ vital specs and pricing to find the car that best fits your needs. You can even compare the included equipment on specific trims.

Car Reviews: Before you head into the dealership, get our expert impressions and observations about new cars. See how they fare in real-world testing and use our expansive knowledge to negotiate the best possible price based on the vehicle’s features.

Find Cars for Sale Near You

Now you’re ready to start shopping. When you go to look for that one special car, don’t limit yourself to only one dealership. It’s better to find several candidates at nearby dealers, create a spreadsheet with the details and status of negotiations on each car, and ask for emailed confirmation of any deals you make over the phone. Gathering competitive examples in your area can also help you gauge the appropriate price, too. And if you’re transparent with each seller that you’re considering other similar cars, it could give you leverage when negotiating.

Browse Listings: Search new, certified pre-owned and used inventory on Cars.com and start shopping at dealerships in your area. You can use our filters to search for the exact features you want and get price quotes from multiple dealers.

Research Dealers: Not all dealerships are created equally. See what real consumers have to say about their experiences on the lot, and talk to friends and family members to learn more about which dealerships they recommend and which dealers they suggest you avoid.

Use the Cars.com app: An easy way to keep track of the cars you’re considering as you visit dealerships is through the Cars.com app, which is available for both Apple and Android. You can even use it to negotiate for a lower price by showing salespeople a list of the cars you’re considering and where theirs falls as far as price and miles.

Focus on Financing

When you contact dealers, ask for the best out-the-door price, meaning the total of the car’s price, taxes and any fees. That should be your starting point for negotiations, not its 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.

Know Your Financing Options: Once you’ve narrowed your vehicle options, focus on each car’s financing specifics. Peruse current rebate and financing offers, see which vehicles retain the most and least value, read our financing advice to learn about various payment options, and finally, run the numbers with our payment calculator. This will help you calculate your monthly payment and determine how much you can actually afford.

Prequalify for a Loan: 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 from an outside source, such as a bank, in place. Younger buyers may not get the best interest rate because they lack a credit history, but a qualified co-signer (like a spouse or parent) can help you get a lower rate. Because a dealership wants your financing business, they’ll likely try to match or beat whatever preapproval you have. You can prequalify for an auto loan right here on Cars.com using the tool linked above.

Research Your Trade-In’s Value: Trade-ins are a popular way to reduce the price of a new car; in fact, 40% of respondents in a recent Cars.com survey said they planned to do so when buying their next vehicle. However, a trade-in’s value is also one more item to negotiate with a dealer, and you’ll want to argue for the highest possible price. To help you get the most out of your trade-in, Cars.com’s Your Garage tool gives you market-price values (for, say, if you sold your car yourself) as well as an instant offer for a trade-in value. You can even contact a dealership to solicit the best possible trade-in deal. Alternately, you can get the vehicle appraised in person at another dealership, such as CarMax. If you get a lower trade-in offer from the dealer, ask if your best offer from an outside appraisal can be matched.

Inspect, Inspect, Inspect

Take a Test Drive: As part of your search, it’s a good idea to check out the vehicle you’re considering in person and take a test drive. Evaluate how well you fit in the car and look for warning signs of major mechanical issues. Anything that falls short of what the automaker or dealership promises, that’s less than ideal or that isn’t as good as another car you’re considering can be used to negotiate a lower price.

Inspect Used Cars Even Closer: While new cars come have lemon laws and longer warranties that protect consumers from mechanical woe, used cars come with a shorter warranty at best — and often nothing at all. Get a trusted mechanic to inspect the used vehicle you’re looking to buy, especially if it’s out of warranty, as they 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 $150 or so, but the possible problems revealed can save big headaches down the road.

More From Cars.com:

• Sticker Shock: How Much More Than the Starting Price Will That Car Really Cost You?
• How to Spend the Least Amount of Time at a Car Dealership
• Should I Buy a New, Used or Certified Pre-Owned Car?
• What Makes Up a Destination Charge?
• Are Extended Car Warranties Worth It?
• More Car Buying Advice

Beware of Extras

After you agree on a price, a dealership may try to sell you accessories, extended warranties, service contracts and even car insurance. Be sure you know what you really need and how much these add-ons might cost you, and carefully consider any before you sign.

You can negotiate the price of those warranties, too — everything, down to individual options, is negotiable. That being said, you should be mindful of practices like extending your auto loan by months or years. If your monthly payments don’t change, extending a loan term to afford extras on your car may seem like a great deal at the time, but those extra months will prolong your car payments and often add interest to the total loan.

You Can Always Walk Away

If a dealership simply will not work with you — and the price isn’t right — you should always be willing to walk away. Bear in mind that the salesperson wants to sell you a car now. Understand that today-only deals are often a sales tactic unless there are manufacturer incentives ending that day.

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.

Cars.com’s Editorial department is your source for automotive news and reviews. In line with Cars.com’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of Cars.com’s advertising, sales and sponsored content departments.