Knowing how to negotiate a new car purchase matters if you’re hoping to get a lower sale price. Knowing how to approach negotiations with the seller or dealer can improve your chances of getting the best price possible.
10 tips for how to negotiate a used car purchase
Buying a car doesn’t mean you have to accept the asking price at face value. These 10 car buying tips can help you and the seller reach an agreement on price that you’re both happy with.
1. Make price your first priority
There are other things the seller may try to negotiate besides price, such as how much you’ll get for a trade-in or how much you’ll need to put down.
These are important to the negotiations, since they affect the total cost of buying but don’t get distracted. As you enter into negotiations, start with price first, then work your way down the list.
2. Draw your baselines
Before you begin the negotiations, do your research.
Decide which options you want (or don’t) and research the vehicle’s value. Figure out what you can afford to put down and where you’d like your monthly payment to land.
Use those numbers and the car’s value to determine the lowest price you’d like to pay and the highest price you’re willing to pay to buy. Pick a number in the middle that represents a good compromise.
3. Know your strengths
When negotiating, you need to have some kind of leverage that could help sway a salesperson to offer you a better deal on a car. So take stock of what you have in your corner.
One of the best car buying tips you to follow is comparing your loan options. Surprisingly, 70% of Canadians only consider one lender before getting a car loan.
Keep those aces in your pocket and be ready to pull them out during the negotiations if needed.
4. Go in low and have a counteroffer ready to go
The main goal of negotiating when buying a car is to make the transaction as favorable as possible for you, not the dealer. If you’re asked to make the opening offer, stick as closely to the lower end of your target price range as possible.
Don’t be frazzled if the salesperson comes back with a number that’s much higher. That’s their job, after all.
When it’s your turn to make a counteroffer, don’t take a huge leap all at once. Bump up the price in small increments and be prepared to justify why you’re asking for that price to the salesperson.
5. Ask for a price match
If you’ve done your research thoroughly, you might have taken time to get some prices from competitors. Pull those out if it looks like negotiations are starting to stall.
Ask the salesperson to match the price their competitor is offering as closely as possible. If you’re in a strong position to buy and the salesperson knows it, they may be willing to match the price to keep your business.
6. Stay focused
As the negotiations move along, the salesperson may try different tactics to steer you away from discussing price. If you feel the conversation moving off-course, politely but firmly bring it back to price and let them know you can negotiate everything else once that issue is settled.
7. Take your time
Buying a car isn’t like taking a stroll through the park. It could take you all day or even several days to come to an agreement with the dealer.
Go slowly and don’t allow the salesperson to rush you.
8. Make your case to someone else
If you feel like you’re getting nowhere with negotiations, it’s okay to start over with another salesperson or even their manager. Just be ready to explain your position and your reasons for choosing the price that you have again.
9. Be prepared to walk away
At some point, you may have to rethink your purchase if negotiations have reached a deadlock.
If the salesperson absolutely refuses to budge another inch, consider whether it makes sense to continue. Let them know you’re willing to walk away from the deal and if they don’t make any effort to try and woo you back, it’s a sign that you may be better off trying another dealer.
10. Get it in writing
If your negotiation efforts yield fruit, don’t accept the price at face value. Get the offer in writing before moving on to negotiating anything else.
Get preapproved for a car loan before you negotiate
Having a loan preapproval in hand can show a dealer that you’re serious about buying and it may be a helpful bargaining chip. At Birchwood Credit Solutions, you can submit an application for loan preapproval in just a few minutes and get a decision in as little as 24 hours, so you can approach negotiations with confidence.