Negotiating with a Dealer So, you are at the dealership, have completed your test drive and review of the car and have decided to make the purchase. At this point there is usually room to negotiate downward from the dealer's asking price on a used vehicle. However, in the last few years several "No-Haggle Pricing" dealerships have popped up across the country and, while the "no-haggle" approach usually applies only to new cars, it may apply to the used inventory, as well. While there may be little or no room for directly negotiating the price of the car at these dealerships, there are other opportunities to put your negotiating skills to work.
The Kelley Blue Book Retail Value you have printed out and brought with you to the dealership (make sure to print the "Retail Value" and not the Private Party or Trade-in Value) represents the typical dealer's asking price or the number likely to be on the window sticker, and not necessarily the selling price. If you're up for a little negotiating it is very likely that you will pay less than the Kelley Blue Book Suggested Retail Value.
Here are a few tips: You may have a better chance of saving yourself a few dollars if you negotiate the price of the vehicle, your interest rate and your trade-in separately. However, you should remember a very significant point. Nearly every new-car deal involves four separate items: The new (or newer) vehicle being purchased, the value of the trade-in, the down payment and the monthly payment. The industry works on a system of combining all these into the deal because, in the reality of the business, that is the way almost all deals are structured. It is, in fact, the way most people buy cars. To try to figure them as distinct, separate items with no relationship to each other is folly; the money has to come from someplace. Another truth is that most buyers have a vehicle to trade and, in most cases, they are upside-down on that trade, which means they owe more on the car than it is worth. Therefore, if you are attempting to purchase a new or newer vehicle of a certain price, and you are upside-down on your trade, and you don't want to put very much money into the down payment, the only remaining source for the money is the monthly payment. The people at the dealership most assuredly want to sell you a car, but they are not magicians and they will deal in reality.
As part of the negotiation process the dealer will often ask how much you are willing to pay for a particular vehicle. There is less chance for confusion if you aim for an overall price rather than a monthly payment. Again, however, most buyers are what are known in the business as "payment shoppers," and they are looking for low monthly payments. This is absolutely a terrible way to purchase a car. The dealership may be able to meet your monthly payment demands, but it will quite often be at the expense of extending those payments for a longer duration. The best advice is to stay within a reasonable price range and don't over-extend yourself.
Other items up for negotiation might include an extended warranty or options and accessories on the vehicle. The addition of options like an upgraded sound system, premium wheels or new floor mats can be negotiated. Many times these low-cost items can be thrown into the package. You may also be able to negotiate an extension to the vehicle's current warranty, providing coverage for up to one year rather than, say, six months. And, just as with a private party sale, if there is any work a dealer promises to do or options it intends to add, get everything in writing before you close the deal. This additional work is often written on a form known as a "Due Bill," for work "due" to be completed, and you should receive a copy of this form when you sign the final documents.
What can be negotiated is between you and the dealer and you never know what you can get until you ask.
And, here is one final point regarding negotiation that nearly every customer misunderstands, particularly men (who too often turn the process into a contest), but which is universally understood by every good car salesperson: He who talks the least is controlling the negotiation, he who talks first loses.
With that, good luck, good shopping and good driving.