How to Negotiate With a Car Salesman

Being good friends with a former general manager of a car dealership, I've learned a lot of both myths and facts about negotiating with car salesmen. These tips have saved my husband and I quite a bit of money over time, and I hope they will help you as well.

1) First, I think it's very important before you set foot in a car lot to do your homework, both on the car you're interested in as well as the dealership itself.

Two good places to start on learning a car's true value are Kelly Blue Book and N.A.D.A. I'm going to provide links to both below. As far as learning the reputation on a dealership, ask as many friends and family members that you can about good and bad experiences they've had.

2) After you have a good idea of what you want, the next step is going to the car dealership itself.

The main thing to keep in mind here is your body language. Trained salespeople can recognize an impulse buyer by their behavior, no matter how much they verbally say, "I'm just looking." You also want to be polite but say very little in the beginning. This tends to throw salespeople off guard a little, making the "talking" types more likely to tell you possible things wrong about the car you wouldn't even think of asking!

3) This doesn't happen as much anymore, but don't fall for the "I need to discuss this with my manager" technique (where the salesperson is really taking a coffee break for 5 minutes).

This is sometimes used when you make an offer, and the salesperson comes back to you and says "Sorry, I tried but that's not good enough." If the salesperson is not the decision maker when it comes to offers, ask to speak directly with the person that has that power.

4) If at all possible, have cash for the vehicle (see some of my other money articles if you're tired of being in debt) so you have a visual of what the salesperson is going to lose if you walk away.

The ability to walk away is your strongest negotiating tactic as a customer. You don't have to be mean, but you should be firm enough that you know the value of your own money and what you want to do with it.

More Tips:

• The best time to buy a car is late in the month (dealership trying to make quota) and on a weekday morning (typically slower).
• Realize that newer cars generally drop in value at a higher percentage than cars 5 years and older. Don't get yourself in a situation where you're "upside-down" (where what is owed on the vehicle is more than the value of the vehicle itself if you sell it).
• Consider this same technique when it comes to furniture, which has a much higher mark-up than cars as a percentage. One of the things that amazed my friend is that people are willing to talk a car salesman down in price but will then pay full retail for their furniture!

Resources:

NADA Website
Kelly Blue Book