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How to Negotiate With a Car Dealer

Car buying and negotiating is complicated and for many people it's unpleasant, for good reason. New cars from dealers are pure purchase and assured depreciation, except in the rarest of circumstances. On top of it, 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?

So of course it's intimidating, but you can do it with our help. The secret is understanding where the dealer's profit comes from, and knowing when it's time to forget about all that and shop as you would for a good deal on any product. Trying to negotiate a good deal on a new car is tricky — even for experienced buyers. 

Though the negotiation process can be difficult, buying a new car shouldn't be thought of as a war between buyer and dealer; instead, it's a business negotiation — nothing more, nothing less. The sooner consumers recognize this, the better off they will be when it comes time to negotiate the purchase price with a dealership.

As you begin preparations to buy a new car, realize that getting the best possible deal requires a good amount of research and plenty of time. You may need to do a cost-benefit analysis that weighs your time and effort versus the difference between the invoice price and suggested retail. Without investing any time in research or haggle effort, expect to pay the dealer's sticker price for the vehicle and possibly more for financing and add-on items like optional accessories or an extended warranty. Taking the time to do your homework puts you in a much strong position when the time comes to negotiate.

You should peruse all of this comprehensive guide before you start shopping. Seriously, all of it. It is detailed and big — because it needs to be. Thanks to Cars.com, this guide costs you nothing. If you can't bother to invest the time in reading the whole thing, you're off to a rotten start in the car-buying process and your results will be predictable. Dealers are out to make money, so it takes a lot of effort and negotiation if you want to pay less than sticker price. This guide can help you boost your negotiation skills and make the best possible investment as a buyer. Remember that this guide, or at least the part about dealer costs, applies to new vehicles purchased at dealerships only.

Before Negotiations Start

Before you start to negotiate or interact with the dealer at all, decide which vehicle you're interested in and how you're going to pay for it. Also, think about how much you can afford for a monthly payment and how much your trade-in is worth. Having this information in hand will help you negotiate the best deal with the dealership. 

Buying Guides: Figure out what you want to buy before you set foot on a dealership's lot. Use buying guides to compare vehicles in a particular class (minivans, passenger cars, SUVs, etc.). Pay attention to things like gas mileage and other specifications that will help you choose the right vehicle. 

Research: Being armed with the right information makes it much easier to negotiate. Find the MSRP and technical specifications on our Research page. Knowing what each car has to offer, as well as its window sticker and invoice pricing, is the first step toward negotiating a good deal. Compare warranties as well, and check into extended warranty options. You may be able to negotiate with the dealership for an extended warranty. 

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

Focus on Financing

Finance Channel: 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 calculators. This will help you calculate your monthly payment and determine how much you can actually afford. You may also want to think about getting pre-approved. Knowing exactly how much you can afford to spend makes it easier to determine your target price and negotiate with the car salesman. 

Find Cars for Sale Near You

Listings: Now you're ready to start shopping. Search used inventory on Cars.com or build a new car and start shopping at dealerships in your area. Get price quotes from multiple dealers to find a good price. 

Dealers: Not all dealerships are created equally. Check out dealer inventory, location and see what real consumers have to say about their experiences on the lot. Talk to friends and family members to learn more about which dealerships they recommend and which dealers they suggest you avoid. 

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