Car salespeople are trained, professional negotiators. This makes most of us regular folks feel intimidated when we find ourselves at the negotiating stage of the car buying process. There are many questions that will be running through your head. Will there be any wiggle room in the price? Will you be hit with fees you don’t understand? How hard can you push on a price and does ‘no’ really mean ‘no’? We'll tell you what to expect and give you some insider tips to set you up for negotiating success.

Before You Go to the Dealership

Girl Looking Up Cars Online

As with most things in life, being prepared for negotiating a car price is a smart move. It will help you get as close to your target price as possible. A few negotiating tactics start before you even walk into the dealership.

Tip 1. Do your Research

You’ve probably done a lot of this already while narrowing down the car you want to buy. Make sure you have a vehicle in mind as well as the trim levels that are right for you. The trim levels and options you choose will significantly affect the price.

Tip 2. Get Quotes from Several Dealerships 

Getting prices on the car you're interested in increases your bargaining power when you’re ready to go in and make an offer on a car. Having multiple quotes will allow you to show the salesperson that you’ve done the research and will walk if they aren’t able to give you a good price.

Get Local New Car Discounts

Tip 3. Get Pre-Approval for a Car Loan

Car loan pre-approval doesn’t mean you need to go through with the loan offers you're given, but it does increase your negotiating power. If the dealership offers you a higher interest rate for financing, show them the rate you were pre-approved for and let them know you won’t finance through them if they can’t match that rate.

At the Dealership

woman in dealership with car salesman

Tip 1: Be Aware of Sales Tactics

According to Bankrate, there are several tactics that car salespeople will use to get the sale. In order to negotiate like a pro, you should be ready for these and avoid falling for them during the price negotiation.

The first tactic is when the salesperson uses your time as a tool to tire you out. If you’ve bought a car in the past, you may remember it being a lengthy and exhausting process. That’s by design. By making you sit for hours during the back and forth of negotiations, they’re hoping you’ll just agree on a price. In order to avoid being exhausted from the process, you can come in for the test drive and then come back to talk numbers another day.

Sale today only

Another tactic in the car sales world is referred to as an “impending event.” This is when you’re told that a limited time event like a special sale or another interested buyer will prevent you from getting this car at this price if you don’t take the deal now. This is a way to create urgency for the buyer to take the deal today. If you feel that this tactic is being used on you, you should confront the salesperson by asking if they really won’t sell you the car, because another dealership will.

There are three common closing strategies that you should know. They're called the Porcupine, the Ben Franklin and the Alternate Choice. Here's what they mean:

Closing Strategy 1: The Porcupine Close

Don't let the salesperson stick you with pushy questions.

The porcupine close, named after the prickly critter, is when the salesperson will try and stick you (get it?) with “If I...” type questions. Examples include: “if I can get you this price” or “this monthly payment” or “this color” then will you buy today? This is just a tactic to get you to say yes and then sign the paperwork.

Closing Strategy 2: The Ben Franklin Close

Pros and cons on notepad
What may seem like a helpful nudge, is actually a ruthless closing technique.

Named after the founding father’s decision-making trick, this technique is when the salesperson draws a line down a piece of paper and then asks you to write down reasons to buy on one side and reasons to not buy on the other. They’ll help you out with reasons to buy and leave the reasons not to buy for you to fill out. When you can’t think of any reasons, they’ll pressure you to just take their price and buy the car.

Closing Strategy 3: The Alternate Choice Close

two cars different colors
"Do you want that in red or yellow?"

The salesperson will ask you if you want the car in a red or yellow color, for example, even if both are available. Just like the porcupine technique, this strategy reduces your ability to answer ‘no’. The best answer you can give is "I will see what’s available" or "I still need to do some research."

Tip 2: Establish Yourself as an Informed Shopper

Couple buying a car

Before you start the back and forth of price negotiations, you’ll want to make sure the salesperson knows all the research you’ve done and the steps you took to prepare. Don't be shy to inform them you know exactly which trim level and options you want and have researched the fair price for that particular model. You can also let them know you have other competitive prices from dealers without giving away the exact numbers. This will make you less of a target for the common sales tactics described above.

Tip 3: Take it One Step at a Time

3 step checklist

Your salesperson may start the conversation by asking you what you'd like your monthly payments to be. Don’t fall into this trap. You should negotiate the car price, finance terms and trade-in separately. Allowing the salesperson to roll everything up into a monthly payment leaves a lot of gray areas for them to raise the price. You should insist on negotiating the lowest possible price on the car first and only after you land on a number should you move on to the financing and trade in.

Tip 4: Stay on Track
car skidding on track

Staying focused means you won't let the salesperson lead you down the path of preemptively talking about your trade-in or financing. You'll want to start with the lowest reasonable offer that you've determined after researching the car. You can calculate this by taking the invoice price, subtracting incentives and factoring in a little extra (say $100). You will likely go back and forth on the price as the salesperson presents counter offers and then disappears once in a while to go "run it by the sales manager."

tug of war game
Negotiating is like a game of tug-of-war. Pull hard for your price but don't break the rope. 

If the counter offers are much higher than what you had in mind, you can let them know you have competitive bids that you got in person at other dealerships or over email. You can also ask if the dealership can beat a price you got from an online car shopping site. Make sure you don't get angry or try to argue with the salesperson. You're not going to win yourself a good price if the salesperson starts visualizing themselves ringing your neck.  

You also don't want to appear as a pushover. If the price is too high and not even close to your competitive offers, let them know. If you stand your ground and tell the salesperson you'll go elsewhere, they'll oftentimes stop you and tell you that something can be figured out. 

Tip 5: Know When to Leave (and When to Say Yes)

Man leaving exit sign

Should you stay or should you go? Sometimes your best bet will be to walk away from the negotiation table and take your business elsewhere. Look for signs that the salesperson may not exactly be Honest Abe.

If your salesperson is trying to convince you that the rebates available are only offered to anyone paying sticker price for the car, you should politely get up and walk. The rebates are offered by the manufacturer, not the dealership and if they try to tell you otherwise, you'll know you're being duped.

The salesperson may offer you a 'today only, take it or leave it' offer. They are most likely all talk. Unless you're satisfied with the price and are confident another dealership won't beat it, you should call their bluff. They will likely still offer you the same price if you come back later that week.

woman buying car from salesperson
If you're working with a trustworthy salesperson and the price is right, go for it.

On the other hand, car dealerships need to make a profit and not all dealers will try to deceive you. You'll be better off accepting the price if it seems fair and you believe the salesperson isn't trying to pull the wool over your eyes. If the price falls within your target range, you can choose to do the handshake instead of leaving. You don't want to waste time going to other places only to come back later when other dealerships can't beat the price.

By following the right steps to be prepared, understanding the tactics car salespeople use, and standing your ground, you'll have a much smoother time getting your car at a good price.