How to Negotiate Buying a Car Through Dealer (Part 2)

Negotiation with a car dealer to get the best price is all about using the right strategy. Here’s our top ten negotiating tips. For part one, please read this post.


Tip 1: Do your homework

The best thing you can do going into a negotiation is to be prepared. In other words, do your homework. Start by doing some web research. You can find out an enormous amount of market information online about the vehicle you’re looking to purchase and its market value.

Tip 2: Be confident

Confidence comes from doing your homework before you walk into the dealer’s yard. With a couple of hours of web research, you can often know more about the car you’re buying than the dealer salesperson, which gives you a big advantage. Make sure you know the market value of the car you want and what you’re prepared to pay.

Tip 3: Keep your emotions in check

Treat the negotiation process like a business transaction. You’ll think more clearly and negotiate much better if you keep your emotions under control. Even if you absolutely love a car, don’t let the salesperson know that during the negotiation process. A good rule is to NEVER pay a deposit on first visit: dealers know that once they get the deposit you’re pretty much committed to the sale. Give yourself at least 24 hours to ‘cool off’ before making any deposit, to give yourself a clear head for the right offer.

Tip 4: Time your offer

Salespeople and car dealerships usually have monthly, quarterly and yearly targets to meet. Strategically time your offer so you make it at the end of these periods. If they’re short of their targets, they’ll often bend over backwards on price to make a sale.

Tip 5: Understand the basics of supply and demand

Supply and demand play a crucial role in the car market, like they do in any market. For example, the dealer may have the car that you want but in an unpopular colour. Or it might have been sitting in their showroom for a while. Situations like that are good opportunities for you to bag yourself a bargain.

Tip 6: Be prepared to haggle

Go in with a lower offer than you’re prepared to pay. The dealer might refuse, but it gives you a starting point. If they give you a counteroffer, you’ll have room to move up to your limit if you need to.

Tip 7: Negotiate with several dealers at the same time

Always remember that you hold the whip hand as the buyer. Car dealerships want your business and it’s a very competitive industry. Play one off against the other to get the best possible deal you can.

Tip 8: Be prepared to walk away

If you aren’t getting the deal you want, walk away. There will always be another deal you can make somewhere else. No deal is better than a bad deal.

Tip 9: Be careful with trade-ins

Trading in your current car with a dealer when buying a new one is convenient. But it’s important to understand that convenience comes at a price.

It’s important to understand that dealers will offer you a wholesale price for your car, which means it will be lower than what you could get for it on the open market.
There’s no point getting a great price on your new car if you get a terrible price on your trade in. If you sell it yourself, you’ll probably be able to sell it market value and you’ll be able to pocket the difference.

Tip 10: Be careful with financing

There’s no point negotiating a good price deal but to blow it on the financing. Be especially careful with dealer financing. It’s a very expensive option.
It’s also hard to negotiate a good deal yourself directly with a lender. Using a finance broker, and getting your finance pre-approved BEFORE you visit the dealership, is a smarter way to go.

How we can help

We’re car finance brokers and we can get you the a great deal. Don’t use dealer-arranged finance or try and arrange a loan yourself. We can also help you access fleet-based pricing on new vehicles, so you can avoid the dealership run around altogether!
Just call 1300 301 051 during business hours to speak with one of our experienced finance brokers.

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