Finding a good deal is all about competition. Prices go down when multiple companies sell the same thing. Whether it’s 
How to systematically negotiate a low car price
If you’re in the market for a new car and want to get the best possible deal, you should make car dealers compete with each other. I explain how to buy a new car at a steep discount in my car buying strategy guide, and today I decided to lay out the steps visually.
Read more about my new car buying steps by getting your personalized strategy guide. It only takes a few seconds, it’s free, and you don’t even have to register.
Why is it free? Because buying a car is something almost everyone has to do and I strongly believe the process is designed to confuse and take advantage of consumers. I’d like to level the playing field and give everyone a chance at a fair deal.
In the example below, you’ll get quotes on a new car from 4 car dealers. You’ll then email each car dealer to make them compete against each other to systematically reduce your price.
Flowchart – How to systematically negotiate a low car price
Now you may be thinking, hey, that’s a lot of work….I had to send at least 4 emails. Well, in this example, we managed to get the price down $4800 from our most expensive offer. That’s a savings of $1200 per email! I don’t know about you, but even if I only managed to save half of this example, I’d be sending emails all day long at that rate. Also, take advantage of these email templates that I’ve put together that tell you exactly what to say to car dealers.
The great thing about this negotiation strategy is that it’s not a secret! Even when you make car dealers aware that you are getting competitive bids, they will still work with you because they want to sell cars.
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Why is it free? Because buying a car is something almost everyone has to do and I strongly believe the process is designed to confuse and take advantage of consumers. I'd like to level the playing field and give everyone a chance at a fair deal.
That is awesome!! I will be shopping for a new/gently used car for my wife in the near future and I will def use your site. Keep putting out that good stuff my friend!
Excellent post! Thanks for this strategy!
So many of us – even myself included – simply hate the car buying process. Making a systematic game plan removes the headaches and still produces some incredible results.
I’ll be sharing this!
I like it, Coach. Thanks for taking some of the angst out of the car negotiating process. Personally, I would keep going back and forth until the last car dealer finally becomes exasperated and tells me to fuggedaboutit! (At least then I’d know what the drop dead best price is!)
Best,
Len
Len Penzo dot Com
I like it. Let the dealers squirm…it almost seems like buying a new car could become fun.
I absolutely want to get the best price possible, but am not opposed to them making their profit. They’re not doing this for charity right?
Here’s a question. How come dealers don’t make it easier on themselves, and snuff out the competition by offering the absolute bottom-price + markup? Then if they have to move inventory, they can always reduce it but otherwise they know they have the lowest deals around?
@FinEngr- Thanks for the question. You’re right, I’m all for win/win negotiations and dealers should be allowed to make a profit. However, you are not going to force anyone to give you a lower price than they can afford. If they want to be competitive, they’ll give you a low bid, if not, you buy from someone else, but the price they offer is their choice.
I wish most dealers would start out with a low price, but alas, there are a lot of people that will just pay more than they have to so dealers start with higher prices. However, CarsDirect does take that approach and offers a low rock bottom price (with a guarantee). I like to get this number and compare it to what I can get by using the EPR process.
I tried a variant of this the last time I bought a car. I got the best price from carsdirect.com, which presumably pits the dealers in your area against each other to get the best price. Using this best price, I walked into a dealership, ready to negotiate the heck out of the dealer.
Anyway, long story short, the first quote from this dealer was way below the best quote I had in my pocket. And this dealer was one of the dealers that carsdirect had negotiated with on my behalf.
Moral of the story, most dealers in any local area for a given brand generally work together to defeat these strategies, atleast against well know buying groups like carsdirect. An individual, on the other hand, will have more success.
Checking Carsdirect is definitely a great idea and will give you a great price that you can always fall back on.
And I agree, it’s possible to get a better price as an individual. The bottom line is the more quotes you get, the more competition. And as competition increases for a commodity, price decreases (Economics 101).
I love this approach! Do you think it will work with [nearly] identical used cars as well?
I never heard of Carsdirect, thanks for the info!
Khaleef- There is definitely some merit to using a similar approach for nearly identical used cars. There are three big differences though:
1- No two used cars are completely identical, and as such it becomes harder to convince used car dealers you got a better price elsewhere.
2- You cannot use car quote services in the same way to immediately request several competitive quotes on the same type of vehicle. Although you can still find listings for used cars through Vehix and CarsDirect.
3- It’s difficult to know the true value of the car (to acurately compare email quotes) until you can verify its vehicle history and/or get it inspected. When bidding on new cars you can assume the value because it’s never been driven.
Thanks for the question, I’ll be writing more about used cars soon!
I would like to definitely tell you that although your strategies are sound, I am in the business to make money. Why everyone thinks we will sell a brand new vehicle below invoice is crazy. Why would you want to buy a brand new vehicle and cheapen it by asking for a couple of dollars off. When a consumer asks me for my best price, I give them sticker. I believe that your interest in my vehicles is substantial enough that you will pay full retail MSRP for it. I average at least 9 new cars a month, and almost always I wind up maybe letting go of $100-350 off the price.
Also, checking edmunds, and all the other car buying sites out there don’t take into account things like what’s in high demand, or what’s becoming a hot item on certain models that continually sell. For example why would I discount a brand new 2011 Camaro when I can’t keep enough of my lot to sell. Now as far as financing your advice is def sound, however most big name dealerships will at least be able to match bank interest rates if your credit is superior enough.
Regards
I followed the above mentioned strategy and was surprised to see that there could be a $5000 range in price on a $30000 price car.
Neil, that’s crazy isn’t it? I’m glad the process worked for you (I’m assuming it did if you saw a $5000 range
)!
Very interesting and easy to understand flow chart. I find the traditional car buying process to be needlessly complicated. Fortunately, as you show, the internet is slowly making the process easier. Finally, power is shifting to the consumer away from dealers.
Good Article! It’s great to be able to haggle car prices via email, instead of having to go back and forth to the different dealers. Another good suggestion is to make sure your credit is clean, nothing stops a deal going down than bad credit.
Great artical, but couldn’t you just lower one dealer it may be a good choice to deal with cash.. if they want to move the car they will go really close to msrp
I work at a dealership (just started) but as far as my experience goes, car selling is a now deal, if you want it now great if not we wont even try to give you our best price so if you want the best price all you need to do is pretend that you are taking the car home right now say no to the price 3 times an the 4th time the manager comes out and will get you the best price then you can go to the other one show them the papers so you dont have to do the same thing there and have them to beat the price, cuz almost everybody say that “well that dealership is giving it to me for this much” but if dont see it we just simply assume thats a lie
Hi Ali, thanks for commenting. You’re right about the “Now” part. One of the key points when buying a car with this strategy is to tell the dealers you will be buying within a couple days at the lowest offer you receive. If you wait a couple weeks before emailing back, they will not take you seriously.
As for going to the dealer to haggle on a new car, I think that is a mistake. First, you’re not likely to get anything in writing, and second, the main reason they will lower the price is competition. When you’re sitting at the dealership they know you are less likely to move on to the next offer. When you are on the Internet at home, it is almost assumed you are shopping around and have other options.
HI! This is very helpful, but I have question: the sales people in our area quote you a price online and when you sit at the signing table the price is suddenly $1500-$2000 higher due to “destination and dealer adds.” We walked out of a Honda dealer last night because of this, after negotiating (what we thought was) a great price on a new car. What is your suggestion?
Hi Julie, Excellent question because this happens all the time! And it’s very frustrating.
When getting car quotes online, before you go to the car dealership to sign the paperwork, make sure you ask the dealer to quote you the total “out-the-door” price including all fees and taxes. Here is an example email to send to a car salesman.
Also, before heading to the dealership make sure they quote you a price on a specific car and ask for the VIN#. Print out the email and take it with you. That way there will be no last minute surprises.