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How to get the best deal on a car

Negotiating for a good price on a vehicle ranks up there with getting a root canal for many. But learning to negotiate can save you a lot of money.

First, though, get the preliminaries taken care of. Identify the car you want, arrange financing, and locate some sellers. Know what add-ons you might want.

By the time you get to negotiating, the price should be the only thing not settled on.

A point to remember

Even if a vehicle is advertised with a "no haggle" price, there is still sometimes room to haggle, so it is worth considering.

Know the value of the vehicle you're negotiating

This can work in your favor if the salesperson is asking a price that's higher. Consult a source such as the Kelley Blue Book for values. Check more than one price guide (such as Edmunds).

The prices involved

When you negotiate, you want to pay close to the wholesale price, which is typically what the dealer paid for it. The dealer will want to stay close to the retail value for maximum profit.

There will also be the "blue book value," which will not be listed and which will most likely be somewhere in the middle.

In case the dealer's cost isn't apparent or you can't get it from the dealer, you can find it online on sites like and

A car salesman tries to make a sale at Santa Rosa Chevrolet  in Santa Rosa, California. (Photo: Justin Sullivan/Getty Images)
A car salesman tries to make a sale at Santa Rosa Chevrolet in Santa Rosa, California. (Photo: Justin Sullivan/Getty Images)

How it begins

The dealer will likely ask you how much of a monthly payment you can afford to pay.

Because dealers have ways of arranging financing, they know how to squeeze extra dollars out of you even while staying within your monthly payment range.

This is why experienced car-buyers put off telling the dealer how much of a monthly payment they can make until after they have settled on a price.

Don't go first

Experienced negotiators wait for the dealer to name the first price. That way, they can go lower, something they probably couldn't do if they were the one to name the first price.

The attitude

Cultivating an air of detachment also works in your favor (in other words, be ready to walk away if need be) because a salesperson who sees that you are attached to a car has a lot of leeway with you.


Knowledgeable negotiators recommend not bringing your trade-in into negotiations until you have first agreed on a price for the car.

Take control

It's important to be the one in control of the negotiations. That might mean telling the dealer you need to go home to think about it. Dealers expect this.

They will likely call you over the next few days to sweeten the deal, either with a lower price or some free add-ons.

Compare prices too

Get quotes from several dealers and bring them with you to negotiate. Using them can make dealers compete for your business — they might match other offers.

In closing

Once you have agreed on a price, you will get the sales contract. This contract will list additional costs such as sales tax, document fees, and perhaps service fees.

Know about these beforehand so that you will have a more accurate price that you will ultimately pay.

Summary of buying a car

Given how fast a car depreciates in value, you want to make sure you get your money's worth.

Learn the best tactics for getting the best deal. Start your search even before you are ready to begin looking.

Estimate the costs of ownership. New and used buyers are often pressured to buy more than they really need, and thus they may get stuck with a vehicle that they eventually owe more on that it is worth.

Practical ideas you can start with today

  • Estimate the cost of ownership of a vehicle.

  • Decide on a realistic price range for a vehicle and stick to it.

  • Learn the pros and cons of leasing, and decide if that's a good option for you.

  • Obtain financing on a vehicle.

Dive deeper: Buying a car: Everything you need to know

This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.

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