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Getting Started

Before you begin negotiating the price of a car you’re interested in buying, knowing the vehicle’s market value is essential. Our review team recommends researching the car that’s caught your eye before beginning negotiations. You should always know the approximate value of a car before you make an offer.


When researching a vehicle, one of the first things you should do is find the manufacturer’s suggested retail price, otherwise known as the MSRP. A vehicle’s MSRP can act as a reference point for your target price.

Research is the first and most crucial step in the car buying process. Your ability to secure a better price hinges mainly on the strength of your research. Entering the negotiation process without knowledge of the industry and the vehicle you’re interested in could leave you fighting a losing battle with a seasoned car salesman.

After you research a vehicle’s MSRP, you should begin looking at the financing options available. For a new car, these include monthly payments, rebates, car loans, and leasing.

Financing Options
Monthly paymentsBreak down the overall purchase cost of a vehicle into monthly installments
RebatesReturn a portion of the final sales price to the buyer to lower the overall cost
Auto loansAvailable through a bank, credit union, or another lender, a loan dramatically lifts the financial burden on the buyer, depending on the loan terms
LeasingCreates significant cost savings compared to buying a vehicle outright

How to Negotiate Car Price

If you are worried about how to negotiate car price on a vehicle you’ve been eyeing for months, worry no more. The best car deals are made possible through the power of negotiation, and our review team has created a step-by-step guide to entering car shopping negotiations:

  1. Do your research. As previously mentioned, research is the basis for all negotiations. Not knowing what to expect can leave you at a severe disadvantage.
  2. Remember this is a business. When searching for the lowest price, it’s imperative to remember that you’re negotiating with a car dealer or private seller. These people want to profit from the sale as much as possible, and simply breaking even is never the goal.
  3. Begin financing early. Showing up to negotiations with pre-approved financing gives you the upper hand in negotiations and helps you avoid unnecessary add-ons and extra fees.
  4. Plan to play coy. Finding a good price for a car usually requires holding your proverbial cards close to your chest and not giving away too much information up front. Knowing what parts of the deal are up for negotiation is essential, too. Taxes and registration fees, for example, are etched in stone, but the baseline asking price is not.
  5. Consider the timing. Dealerships often offer commission and bonuses at the end of the month to salespeople who hit monthly goals. Buying a car at month’s end gives you a much better chance of negotiating a good deal because the salesperson can become desperate to hit their target.
  6. Know your options. When heading into negotiations, be aware of all the options available to you. Discuss costs with multiple dealerships and remember you can always walk away.
  7. Read the paperwork. This may seem obvious, but reading the paperwork associated with a new car purchase is paramount. You should always know the ins and outs of any contract you may sign, especially one with such a significant financial impact.

Differences in Negotiating: New Car Vs. Used Car

While some overarching principles apply to negotiations on both new and used cars, the two require different strategies. Knowing how to navigate each scenario will make you more confident of reaching your target price.

New Car Negotiations

When negotiating the price of a new vehicle, knowing how large a down payment you can make without financially crippling yourself is critical. It’s also important to know the value of the car in question. Our review team recommends using the Edmunds True Market Value (TMV®) pricing system and the Blue Book Value tool from Kelley Blue Book to gauge the car’s value.

It’s smart to understand the trade-in value of the vehicle you’re interested in as well. Car salespeople often try to raise the final cost by mentioning how much money you could get if you traded the vehicle.

Used Car Negotiations

One of the biggest keys to negotiating car price on a used vehicle is becoming familiar with its history report, which provides information on the mileage, status, previous owners, and involvement in any accidents. You can retrieve a vehicle history report in more than one way, but we recommend using CARFAX Vehicle History Reports due to the standing CARFAX has within the industry. CARFAX partners with many notable car manufacturers, so it’s unlikely the company won’t have your vehicle’s history report.

You should use the vehicle history along with your observations from taking a test drive as bargaining tools when negotiating car price. For example, if the car has had one or multiple accidents, you can have more of a leg to stand on when seeking a fair price. Likewise, you can save money if you notice something slightly amiss during a test drive or if the car has an extremely high number of miles.

Other Tips and Tricks for Negotiating

In addition to the steps listed above in the guide for entering car shopping negotiations, below are a few other tips on how to negotiate car price:

  • Check different dealerships for the best price
  • Know the deals and discounts before beginning negotiations
  • Mention the price of the car at a competing dealership and ask if the dealership you’re at can beat or match its competitor’s price
  • Keep your initial offer reasonably low so that you’re still likely getting a deal if the purchase price is higher
  • Know the out-the-door price before signing any contracts

Frequently Asked Questions