8 Tips for Haggling at a Dealership, According to Insiders
By Kristin Wong
Whether you're looking for a new or used car, when you visit a dealership, you better be prepared to haggle. Most of us know the basics—do your research, don’t be afraid to walk away—but negotiating can be a tricky business. We asked industry insiders to tell us what works best when haggling over the price of a car.
1. ALWAYS SELL OUTRIGHT.
If you’re trading in your old vehicle for a new one, you’ll typically get a better deal if you just sell it outright, says Anthony Curren, a manager at a New York car dealership. While most dealerships will low-ball the value of your trade-in, new dealerships are especially sneaky about it. New dealerships are notorious for this. Let's say you come to my lot and want to get $1500 from your trade in. I will tell you it's worth $300, for example. You go to a new dealership and tell them you want $1500. They give you $1500, but add $1200 somewhere on the back side. New dealerships have a lot more play in their numbers, and therefore can give you more perceived value,” Curren says.
In other words, they’ll give you what they want, but they sneak in the difference when they sell you the new vehicle—maybe they’ll charge excessive dealer fees or an unnecessary warranty with an even bigger price tag. Before you resort to trading in your car, Curren suggests trying to sell it yourself first. “Put your vehicle up on Craigslist for a few days before you come to buy the car, and if you don't get any bites, trade it for what you can.”
2. GET QUOTES BASED ON PROFIT MARGIN.
When you negotiate a better price, don’t just get a number for that specific vehicle, says Mike Rabkin, founder of From Car to Finish and a professional negotiator with over 23 years of experience. Instead, ask for the discount related to the suggested retail price or invoice price (the amount the dealer actually paid for the vehicle).
For example, let’s say you're buying a new Corolla. Instead of talking the dealer down to $16,000, you would instead ask for $1300 less than the Manufacturer’s Suggested Retail Price (which is approximately $17,300). “This way, you can use it for whatever vehicle is available that starts with that description,” Rabkin says.
This discourages dealers from sneaking in a higher price for a different make, model, or style of vehicle. Going back to the Corolla example, if you want to look at a totally different model or just a vehicle with different options, you can easily negotiate the same discount: $1300 off whatever the MSRP is, regardless of the vehicle. If the second car you're considering has more basic features, this could very well be less than the $16,000 you originally wanted to pay.
3. USE MILEAGE AS LEVERAGE.
Let’s say you’re buying a used car, and you score competing offers for the same model at different dealerships. In this case, you can use the car with the higher mileage to your advantage, says Curren. “I'll give you an easy example. The customer was down to my vehicle and a vehicle on another lot. We were the exact same on price, but mine had 100,000 [miles] and theirs had 160,000. The car they were trading in had 200,000. By the time the customer paid off the loan at the other guy's lot, they would be back in the same place [in terms of mileage]. On the other hand, they could drive the car at my lot for another 7 or 8 years, and then trade in. In the end, I got the sale because my car had less miles. My tip here is that if they were going to go with the other guy, they could have negotiated to pay less because they were getting more miles.”
4. EMAIL DEALERSHIPS FOR NEW CAR PRICES.
Many buyers will skip the negotiation process altogether and simply email local dealerships and ask for the best price. It sounds simple, but it works. Chris Abouraad, a former dealership owner and current Sales Team Manager at CarGurus.com, says, “For new car shoppers, sending emails to local dealerships that have the exact desired model and asking for the best price can result in getting the best price."
He adds, “It can also lead to an influx of phone calls and emails from dealerships, so one tip is to create a new email address just for this process.” However, Abouraad points out that this tactic rarely works well for used car shoppers, since each car is different.
5. ALWAYS DEAL WITH MANAGERS.
When asking for prices via email Rabkin says you should seek to finalize the deal with a manager. “They’re the ones who can decide price on the spot, and aren’t on commission,” he explains. “Managers have quotas to hit each month, so the end of the month is a good time to negotiate, as they may get a bonus for hitting their quota, and you’re the customer that puts them over the top, getting you a better deal.”
6. LEAVING THE LOT DOESN’T ALWAYS WORK.
The age-old tactic of leaving the lot in a huff? It’s outdated, says Abouraad. “Years ago, the dealership made sure to keep shoppers on their lot, but now that isn’t as common or as effective with an incredible amount of information available online. Plus, recent research has shown that 10 years ago, shoppers visited an average of five dealerships when buying a car and today they’re visiting one or two dealerships. This shows that salespeople, much like the car research process, are evolving over time.”
These days, shoppers already know what they want and have done a fair amount of research online. As a result, Abouraad says, fewer customers find the need to leave. Typically, both the customer and the dealership knows what’s reasonable, so there aren’t as many surprises.
7. GET PRE-APPROVED.
Beyond the price of the vehicle, you can negotiate your financing, too, and perhaps score a better rate. The key, Curren says, is getting pre-approved for your loan elsewhere. “Go to your bank, get pre-approved for an amount, then tell the dealer you want to get into a car, and can do no more than this," he says. "They will find a way to make it work for you, or they will lose the business. If you can gain control on this aspect of the sale, you gain the upper hand.”
Curren adds a word of warning: “Do not lie, because dealers will always call and double check the pre-approval amount.”
8. ASK FOR REBATES.
Rabkin adds that there are often unadvertised rebates you can score just by asking. There are often discounts for military personnel, senior citizens, college students, and first-time buyers. Sometimes, there are even loyalty rebates if you own the same brand of car already. “These aren’t from the dealer, and lower the price of the vehicle,” Rabkin says. “It’s up to you to ask the dealer what all the qualifying rebates at the time are, as they may not offer this information.”