Never mix the vehicle price negotiation with other factors
Dealers like to combine all the parts of the negotiation into one single negotiation. For example, having them put the vehicle price, trade-in value, and financing option into one overall negotiation. Oftentimes, this means that they will focus on the payment rather than the price of the components. This gives them greater ability to provide a more favorable number in one area while increasing the price (and their margin) in another. This type of vehicle price negotiation almost always favors the dealer and you should not allow yourself to be pushed into this type of negotiation.
To avoid it, tell the salesperson that you want to first focus on the price and then discuss the other aspects of the deal. Remember… as noted in Step 4, you should negotiate from the Dealer’s True Cost and not from the Sticker Price. Don’t be afraid to discuss the Holdback and other Dealer Incentives that may be applicable to the car you are negotiating for.
Consumer Reports offers a New Car Price Report that can be helpful in determining the actual True Dealer Cost on a vehicle. To access the Consumer Reports New Car Price Reports web page, go to: Consumer Reports Advice and Prices on Buying a New Car.
With a new car, don’t be afraid to tell the salesperson that you want the lowest price possible and that you’ll be visiting other dealerships to try to get the lowest price available. If the price negotiation gets very close between a couple of dealerships, then make the decision based on other factors such as dealer reputation, how you were treated, and quality of the service department.
With a used car, it’s more difficult to find comparable models at local dealerships. But, you can still research price and value using the web. Make it clear to the dealer that you aren’t going to overpay and don’t be afraid to start with an aggressively low price.