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Tips on How to Negotiate Car Price

For most purchases, price negotiation does not affect the process, and people typically pay the advertised price for their desired items. With car sales, however, negotiating is essential to getting a good deal on the car you want. While many people find price negotiation uncomfortable and antagonistic, there’s no reason to feel uneasy while negotiating. In fact, you can save thousands by negotiating effectively; and, when properly prepared, many car shoppers actually find the process enjoyable. Below, you’ll find advice for negotiating a better price on a new or used car. 

How to negotiate new car price

The key to every car negotiation is preparation. A buyer who has researched, compared, and planned for purchasing a new vehicle will have a significant advantage over someone who simply walks into a dealership. To ensure you don’t miss out on a great deal when negotiating for a new car, incorporate the following tactics into your search:

Research – What capabilities do you need your car to have? Will you be making long daily commutes, transporting large items or equipment or taking small children to school? Whatever your needs, make practicality your first priority. Once you’ve identified necessary features, search for models that specifically meet your requirements. Cars are routinely reviewed and rated on things like performance, reliability, fuel efficiency and family friendliness, so you should be able to find magazines and websites that rank the vehicles you’re interested in based on factors relevant to your search and investigate them.

Once you’ve come up with a short list of cars you would like to take a closer look at, it’s time to start shopping. Try to find websites for dealers in your area and look up as many listings for the models you’re interested in as possible and keep notes on the details and prices listed for each. You can also try using websites that search multiple dealer websites like or and perform an advanced search. This will allow you to filter and compare by model, year, color and features.

You’ll also want to research rebates and special offers. Manufacturer’s offer different incentives throughout the year and dealerships aren’t always forthcoming about current manufacturer incentives and other opportunities to save, including things like cash allowances, rebates, financing specials, customer loyalty discounts and discounts for being a member of certain organizations. At all costs avoid the idea that there is a single, perfect car for you. Since this mentality could weaken your negotiating position, strengthen your position by keeping your options open.

Negotiate – Call a few dealerships and schedule appointments for test drives throughout the day. Doing so means you’ll have other options if you visit a dealership you don’t like. Once you’ve taken a test drive and determined you want to negotiate, let the salesperson know you’d like to discuss pricing. If the sticker price is consistent with the prices of the other cars you’ve seen, begin by communicating that the amount you’ve budgeted for the purchase is 15-20% below the purchase price.

Be friendly but firm in your tone and voice. Let the salesperson know that you’ve investigated similar cars and know their pricing, but do not disclose the competing prices. Demonstrating market awareness communicates that you’re willing to shop elsewhere. Remember, as an uncommitted shopper, you have the upper hand in the negotiation. A salesperson wants to make a sale and he should be willing to work with you on the price to make that happen.

Your first offer is not likely to be accepted. If the price you were quoted initially included all available incentives and rebates, the dealer may not have a lot of room to negotiate. If not, this would be a good time to ask why you weren’t offered all available discounts.

The longer you continue to ask questions about how the price can be reduced further, the more likely you are to get the best deal possible. If the salesperson seems inflexible or you don’t trust that you’re getting the best deal he or she can offer, it is a good idea to visit another dealership and start the conversation over again. The more times you repeat this process, the more confident you’ll feel in your final decision.

Also, be aware that:

Negotiate car price for salvaged and repossessed cars

Salvaged and repossessed vehicles make up an often neglected portion of the used car market. When a buyer defaults on an auto loan, a bank can have that car repossessed and then sell it at an auction in an attempt to recoup the loss from the defaulted loan. Used car dealers frequently attend these auctions to try to find used cars to build out the inventory, often purchasing them for a low cost and reselling them for a profit. These auctions are usually only attended by industry professionals and not the general public and for good reason. Repossessed cars are sold “as-is,” and it takes an experienced professional to determine whether a repossessed car has significant defects that will need to be repaired before selling.

According to an industry survey, 92% of used car dealers responded that they acquire portions of their inventory through repossessed car auctions. If you find a used car you’re interested in while browsing, you might ask if the car has been repossessed. If so, there’s a good chance that the dealership acquired the vehicle for well below its sticker price, and you may have more latitude during your negotiations.

A salvaged vehicle refers to a car involved in a serious accident, which the insurance company has deemed irreparable or totaled. Sometimes mechanics, body shops, or dealerships will purchase and restore a totaled vehicle for sale. A salvaged vehicle will usually sell for below the market value of the same make and model vehicle that is not salvaged. This lower sales price can be very attractive to buyers, but you should be wary of purchasing a salvaged vehicle without having it inspected to ensure its quality. Salvaged cars can be difficult to insure, so buyers should contact their insurance company before purchasing.1, 2

About car financing

In addition to the research and price comparison you perform at the beginning of the car buying process, you should also seek financing before you buy. Pre-financing allows you to obtain a loan approval so you know what your loan rate, monthly payment, and cumulative interest will be. Dealerships often want to package their cars with their own financing so they can make more money (see “What is Dealer Reserve – Auto Loan Pre-Approval”) however, the particulars of their pricing may not be fully explained and customers could leave the dealership without knowing exactly how much they’re going to pay.

To arrange financing before you buy, start your pre-approval process with Nationwide so you’ll know exactly what you’ll be paying; the process is quick and easy, usually only taking 15 minutes. That way, you can enter the dealership with the confidence of knowing that your next car has already been financed, and all you have to do with the salesperson is negotiate.

Negotiating used car prices

Negotiating for a used car occurs in a similar manner to new car negotiations. The biggest difference is that by buying used, you may be able to save a significant amount of money on the overall price of your vehicle purchase. According to industry insiders, salespeople are especially willing to deal on used cars that have been on the lot for more than two months. If you’re strictly looking for the best deal on a used car, you can simply call a dealership and ask if they have any older inventory that they would be willing to make special deals on.3

If you’re worried about a used car’s condition, try searching for “certified pre-owned” vehicles. These vehicles are inspected by a mechanic, repaired or updated where necessary, and detailed. As such, the asking price for a certified pre-owned vehicle will most likely be higher, but you gain the security of knowing the car has been inspected and should be under warranty.

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