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5 tips for negotiating a car’s price at a dealership

Follow these steps for how to negotiate a new or used car's price and score the best deal on your next set of wheels.

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By

Alex Jeffs

&

Jaclyn Hurst

Updated

Fact checked

Whether you’re planning to buy a new or used car, you can usually get a better deal by bargaining with the car salesperson. A little preparation beforehand can help you drive away from the dealership with a great deal — or help you know when it’s time to walk away. Learn these 5 tips for how to negotiate with a car dealer.

1. Follow the 3-dealership rule

The 3-dealership rule can help you find the most competitive offer on whatever car you’re interested in buying. Simply do a quick Google search and find the closest 3 dealerships to your house. Pick a weekend that works best for you and make the time to go to all 3 of them.

Once you’ve gone to all 3 dealerships, you’ll have a good idea of which one has the best deal on the car you’re interested in and can use offers from competing dealerships as leverage when it comes to negotiating the price of the car you want.

2. Shop near the end of the month

There are a few times of the year that are better than others when it comes to buying a car. The general rule though is to shop for and negotiate a car’s price at the end of the month. Salespeople have monthly targets, and they’re sometimes willing to play ball to lower the price in order to hit those targets near the end of the month.

But don’t wait until the very last day of the month. Some dealerships have fiscal months that end a few days before the calendar month, and salespeople might hit their targets a few days early. Instead, aim for shopping a few days to a week before the month ends for the best chance at a killer deal.

And for the absolute best deal, shop near the end of December, when salespeople are trying to get rid of old models and hit both yearly and monthly goals at the same time.

3. Get pre-approved for a car loan before visiting the dealership

Dealership financing is convenient, but it’s not always the best deal. Before you drive away with the car of your dreams, take the time to compare your financing options and see if you can get a better deal from a bank, credit union or reputable online lender.

Not only can a third-party lender offer a better deal in many cases, but getting preapproved with a few lenders before you visit the dealership also puts you in a better position to negotiate both your car’s price and your interest rate.

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Ask an expert: How can I find the best interest rate for my credit?

LeeAnn Shattuck

LeeAnn Shattuck

Automotive expert and founder of The Car Chick

Get preapproved for a loan through your local bank or credit union first. Then take that preapproval to the dealership to see if they can beat that rate.

You don’t have to show them the preapproval letter — just tell them the rate you’re approved for. Feel free to fudge a little and tell them a slightly lower rate to see if they can beat or match that to get an even lower rate.

Dealers have relationships with multiple banks and can sometimes negotiate better rates on your behalf.

4. Don’t be afraid to walk away

It can be tough to walk away when the dealership closest to you is offering a free window tint or stereo upgrade. But if the salesperson is offering you a car above your budget and isn’t willing to negotiate on a car’s price, it might be time to go elsewhere.

If you think there’s a better deal out there, there probably is. And sometimes, walking away might even make the salesperson lower their offer price. Always try to keep your budget and needs in mind and not get pressured into buying a car you don’t want.

5. Be polite to the person who’s trying to sell you something

While it’s important to be confident when negotiating a car’s price, people are usually more likely to do something nice for someone who’s been nice to them. Keep this in mind when shopping around and you might just find a salesperson who’ll sell you the car for lower than the advertised price.

And while walking away is sometimes the right decision, it’s not a good idea to repeatedly threaten to walk away when you don’t mean it. Walk away when you think you can find a better deal elsewhere — not when you’re trying to play hardball to get a better price.

How to negotiate a used car price

You can use all of the same tips to negotiate a used car’s price, but you also need to make sure to know exactly what the used car your interested in is worth based on factors like the make, model, trim, year, mileage, vehicle history and any special add-ons or features. You can read our guide on how to estimate a car’s value here. The process involves visiting multiple used car sites like AutoTrader.ca and Kijiji to see what similar vehicles are selling for.

When you visit a dealership or private seller you can then negotiate the price of the used car based on those other offers. For example, if a dealership is selling a used car for $15,000, but you saw the same model with similar mileage selling online for $13,500, you could start your first offer at $12,000. After you negotiate the used car’s price, you’ll likely end up at or below the price you saw online.

Bottom line

Car prices aren’t set in stone, and learning how to negotiate a car’s price can help you save a pretty penny. If you’re ready to start shopping, compare car loans to increase your bargaining power when you hit the dealership.

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