5 tips for negotiating with a clever car dealer

Whether you’re planning to buy a new or used car, you can usually get a better deal by negotiating with the car salesperson. A little preparation beforehand can help up your bargaining power when you hit the dealership — or let you know when it’s time to walk away.

1. Follow the three-dealership rule

The three-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 three dealerships to your house. Pick a weekend that works best for you and make the time to go to all three of them.

Once you’ve gone to all three dealerships, you’ll have a good idea of which one has the best deal on the car you’ve already researched online.

2. Shop near the end of the month

Salespeople have monthly targets, and they’re sometimes willing to play ball and lower the price 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 options and see if you can get a better deal from a bank, credit union or 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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Loans Canada Car Loans		$500	0% to 29.99%	3-96 months	300	Min. income of $1,800 /month, 3+ months employed	Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.	Go to site More Info	Compare	loading Fetching your data...
Canadian Auto News		$7,500	4.49% to 29.90%	12-84 months	300	Min. income of $2,000 /month, 3+ months employed	Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.	Go to site More Info	Compare	loading Fetching your data...
Canada Auto Finance		$500	4.90%-29.95%	3-96 months	300	Min. income of $1,500 /month, 3+ months employed	Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.	Go to site More Info	Compare	loading Fetching your data...
Carloans411 Car Loans		$500	1.90% to 19.99%	Up to 72 months	300	Min. income of $1,600 /month, 3+ months employed	Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.	Go to site More Info	Compare	loading Fetching your data...
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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 budging, 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.

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

While it’s important to be confident when negotiating, 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.

Bottom line

Car prices aren’t set in stone, and good negotiating tactics 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.

Frequently asked questions

• Should I get an extended warranty?

  It depends on what the warranty covers and how much it costs. In some cases, an extended warranty can offer extra protection for your car, but it’s not always the best deal. Read our guide to extended warranties to learn more.

• When is the best time of year to buy a new car?

  If you don’t need the newest model, shop for a new car as soon as the next year’s models are released — typically at the end of summer or early fall. You’ll also find competitive year-end deals in December. You can learn more with our guide to the best time of year to buy a car.

• Can I buy a car online?

  It’s possible, though you might want to think twice before buying a used car online. You likely won’t be able to test-drive it or take it to an independent mechanic to have it checked out, which puts you at risk of getting stuck with a lemon.

  If you know exactly what new car you want, it might be a good idea to order it online if you can get a special discount or special order one with the features you like. But test-drive it at a dealership first to make sure you like it.