What Are the Best Bargaining Techniques When Buying a Car From a Dealer?

Answer by Jason Lancaster, president of Spork Marketing, for Quora.

1. Don’t negotiate. Tell the salesperson and sales manager that you’ll sign the paperwork the minute they hit your target figure. Politely decline any counter-offers, give them your phone number, and leave. If the price you’ve proposed is within the realm of possibility, they’ll call you at some point.

2. Follow-up on Saturday or Sunday nights an hour before closing time. Call and ask to speak with the salesperson or manager you’ve spoken to before. Remind them you’re a buyer when they meet your figure, but that they shouldn’t waste your time if they won’t.

If your offer is possible, the opportunity to do one more deal before the end of the day might compel them to work with you…especially if the dealership is having a bad weekend.

3. Follow-up on the last day of the month. Again, salespeople and managers are often under pressure to find one more deal before the month ends. A deal that didn’t make sense on the 25th might make sense on the 31st if the month hasn’t met expectations.

4. Follow-up on days that have had terrible weather. A major snowstorm, a day of wind and rain, etc. can dramatically affect car sales. Call and remind the salesperson or manager that you’re happy to come down when they meet your offer. Again, the fact that they’re not selling cars might get them to bend in your favor.

5. Rinse, wash and repeat. Do the same process concurrently with a couple of other dealers in your area. Make sure they have the car you want, and then give them their mission.

6. Know what a car is worth. If you’re buying a new car, Edmunds.com and TrueCar.com provide “true market” estimates that are reasonably accurate. If you’re buying a used car, KBB.com is a great resource, as it will tell you both retail value and wholesale (aka trade-in) value.

My suggestion is to try and buy a new car for $500-$1000 less than true market value. This is aggressive, but assuming that you’ve got time and you’re willing to work the phone, you can often find a dealership willing to dip into their holdback (financial reserve) to make one more deal.

If you’re buying a used car, I’d try for a 10-15% discount off of wholesale (trade-in) value. It’s damn difficult, but every now and then a dealer will take a car in on trade at below market value. If you make this kind of aggressive offer, you might get it every now and again.

Of course, you can always just offer true market value (new) or wholesale value (used). That will make getting a deal much easier…but what’s the fun in that? (Hat tip to Doug Dingus.)

7. Secure your own financing if you can. A great way to avoid the drama in the finance office is to get a loan from your local credit union. However, if you’re buying a new car and you want to take advantage of a special interest rate (like 0%), you’re going to have to work with the dealership’s finance person.

Quite frankly, I don’t see what the big deal is about going through finance. It’s true that you’re going to be brought into a small room with a very good salesperson, and that he or she is going to pitch you all sorts of stuff. You’re an adult. You can handle this. Be polite, but say no to everything. It’s not personal, it’s just business.

If you’ve got bad credit, the dealership finance office is going to help you out (at least a little bit). However, this doesn’t mean you need to do them a favor and buy a warranty or something…just say no.

8. Always be polite. In some of the other answers to this question, I’ve read suggestions about telling the dealer to “take it or leave it,” threatening to walk out, etc. This is all bad advice.

There are a lot of things that suck about working at a car dealership, not the least of which is being treated like crap by most of the people you deal with. While dealership employees learn how to “warm customers up” – it usually only takes a minute or two to get a stranger to laugh and relax a little – it’s emotionally draining.

Therefore, when someone starts dictating terms and making threats, most salespeople and sales managers will respond aggressively. It’s human nature. Instead of finding a way to make a deal, you’ll be told to wait an hour because someone is “on the phone with Japan” (see Leonard Kim‘s comment here).

Therefore, be nice and respectful to everyone you deal with. If you’re a genuinely nice person, I’m far more likely to do something unusual for you (like selling a car for less than invoice) than I am if you’re a grade AAA jerk.

What’s more, dealerships are now frequently paid on their overall customer satisfaction scores. Polite and courteous customers are far more likely to give a dealership a positive review, and dealers know it. A dealer’s worst-case scenario is to cheap sell a car to someone who gives them a lousy review on the manufacturer’s satisfaction survey. Not only did you fail to make money, but you get yelled at by the GM or owner for doing a bad job.

In closing, the downside to my process is that you might have to buy a car late on a weekend, might have to buy a car during a blizzard, etc., but you’ll get the price you want (or at least get closer than you ever thought possible).

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