It is critical to understand that you should never negotiate for a new car in person. Once you set foot in the dealership, you will be subjected to the Showroom car salesman’s tactics and scams. Not only that, but you will limit yourself to pricing from a single source with no reason for the salesman to make a competitive offer. Instead, get prices from several car dealers and follow these steps to make dealers compete with each other to win your business.
The best time to start contacting dealers is at the end of the month when salesmen are trying to hit their monthly quotas. Sometimes if a salesman (or the entire dealership) is close to hitting a quota tied to a bonus package, they may be willing to move cars off their lot for big discounts or even at a loss, especially if the dollar amount of the bonus is large enough. The negotiating process can take up to a week to work through, so it’s usually best to plan to start at least 3-4 days from the last day of the month.
Use a car negotiation site such as CarMarshal and enter the make and model of the car that interests you and your zip code. Get at least 5-7 quotes from different dealers, but no more than 8-10 to keep the process manageable.
After submitting a price quote request you should receive email responses from all the dealerships within 24 hours. Many of these responses (unless you use CarMarshal) will not be specific in terms of trim, options, or price…or the response will simply contain the salesman’s contact information. That’s ok!
If you do not receive all the information you ask for, feel free to reply again requesting more specifics. If the dealer is still not forthcoming, it’s probably best to move on and focus on your remaining quotes.
Now that you’ve collected your quotes, make sure they’re neatly organized so you can compare them to each other.
MSRP (Manufacturer’s Suggested Retail Price): MSRP is the “sticker” price required by law to be shown in the window of a new car. The manufacturer decides a retail price for each model (base MSRP) and then adds on the retail price for each option. The dealer is free to charge more or less than this recommendation from the manufacturer, but MSRP is a useful guideline for both you and dealers to evaluate comparably equipped cars to each other.
Invoice Price: This is the price paid by a car dealer to the manufacturer for each car. This price is the same for every dealer across the U.S. However, this is not always the bottom line. There are rebates and incentives to both consumers and dealers that occasionally allow you to buy a car below invoice price. Dealers will most likely not send you the invoice price, but it is easy to find on Edmunds, AutoTrader, or CarGurus.
Target Price: There’s no magic wand you can wave to find out the perfect target price. You’ll usually (but not always) end up somewhere between the invoice price and MSRP.
Now that you’ve organized and ranked the initial price quotes from several dealerships, we’re going to give everyone a chance to beat the best quote. Remember, these price quotes are all negotiable!
Next, you will be sending a detailed email to everyone that has supplied you with a quote. Working your way down from the most expensive quote, you will ask each dealer to beat your current best offer, and you’ll update that offer whenever you get a better one..
The end result should be a very attractive offer price. However, if you are still unsatisfied with your results, feel free to cycle through the dealers one more time, but do not bother with any dealers that did not come down in price.
When you’ve reached a satisfactory price, ask the dealer to email you with the VIN number, MSRP, all taxes and fees, and the final out the door price so you have something in writing.
1. Submit to dealers to receive special offers.
2. Then use CarMarshal's automated tool to request an even better offer.