How to negotiate at the car dealership
Buying a car is one of the biggest financial decisions most people make. Yet, many car buyers walk into the dealership unprepared to negotiate the price. With a little preparation and a solid understanding of the car-buying process, you can walk away with a good deal. Here’s how to confidently negotiate at the car dealership and avoid paying more than you should.
Do your research before visiting the dealership
Before you step onto the lot, research the make and model of the vehicle you’re interested in. Look up the sticker price and compare it with what others are paying in your area. Websites like Kelley Blue Book and National Automobile Dealers Association (NADA) provide valuable tools for understanding the market value of the vehicle. Get familiar with the door price, which includes the total cost of the car with taxes, fees, and add-ons. This number is what you’ll actually pay — not just the base price.
Understand your budget and financing options
Knowing your budget helps you set realistic expectations. Consider the monthly payments you can afford, and don’t forget to account for insurance, maintenance, and fuel. When it comes to auto loans, your rate is a major factor in your monthly cost. Check rates from banks, credit unions, and online lenders before you visit the car dealership. Getting an auto loan pre-approval gives you leverage in the negotiation process and protects you from overpriced in-house financing. A good credit score also plays a key role in securing lower interest rates and better loan terms.
Pro tip: When you’re an active member with Empeople, you’ll save even more! Active members with a new Empeople auto loan will receive a loan pricing interest rate discount.¹ Read our FAQs to learn how to attain active membership status.
Get a clear understanding of your loan terms
Don’t just focus on the monthly payment. A lower payment might seem attractive, but stretching the loan term out too long will cause you to pay more in interest. Ask for a breakdown of the final price, including the full cost of the car loan, fees, and taxes. Always negotiate based on the lowest price of the car, not the monthly payment.
Don’t skip the test drive
It might seem like a formality, but test drives are essential. They help you get a feel for the car’s performance, comfort, and features. Make sure everything works as promised. If anything feels off, bring it up. This can give you additional negotiating power or a reason to walk away.
Start the negotiation process with confidence
When you’re ready to buy, approach the car dealer with confidence. Tell them you’ve done your research, and you know what the car is worth. Start by offering a price below your target to give yourself room to negotiate. Use your pre-approval offer from your lender as a comparison to their financing terms. Let them make the first move in the negotiation, whenever possible. Once they throw out a number, you can counter-offer. Stay polite, firm, and calm — this isn’t a confrontation, it’s a conversation.
Focus on the final price, not the sticker price
Salespeople often try to shift your attention from the final price to the monthly payments. Don’t fall for that trap! Focus the conversation on the lowest price for the car itself. Ask the dealer to break down all fees, taxes, and extras. Don’t agree to unnecessary add-ons – like paint protection – without considering their true value. The sticker price is just the starting point — it’s not what you have to pay. Most dealers expect negotiation. The more informed you are, the stronger your position.
Don’t be afraid to walk away
One of the most powerful tools in the negotiation process is the ability to walk away. If you don’t feel like you’re getting a good deal, leave. Often, the dealer will come back with a better offer. If not, you can try another car dealership. You will almost always find a comparable model at another dealership. Buying a car is a big decision. Don’t rush it or let pressure tactics cloud your judgment. Stick to your numbers and stay patient.
Trade-ins and extras
If you’re trading in your old car, negotiate its value separately from the purchase of the new one. Dealers sometimes use trade-in offers to mask a poor deal on the new car. Get your trade-in appraised by multiple sources to know its true worth. Protecting your investment is important. Add-ons like an extended warranty or gap insurance may be necessary, depending on the vehicle you purchase and the amount you finance. These extras are often available though your lender at a lower cost than the dealership. Whenever possible, try to pay for these items out of pocket to avoid a higher monthly payment.
Final tips for a successful deal
Here are a few final takeaways for car buyers looking to make the most of the buying process:
- Bring a calculator. Double-check numbers on the spot.
- Don’t reveal your max budget too early. Let the dealer negotiate against themselves.
- Ask for everything in writing. Verbal promises are not binding.
- Don’t feel rushed. Take time to read the contract and understand all the terms.
Negotiating at the dealership doesn’t have to be intimidating. When you inform yourself, prepare, and stand your ground, you dramatically improve your chances of securing a good deal. The key is to stay focused on the final price, understand the full scope of your financing, and never be afraid to walk away. By mastering the car buying process, you’ll not only save money — you’ll also gain confidence for future negotiations.
¹ APR=Annual Percentage Rate. Interest rates determined by individual credit history. The “As Low As” rates based upon credit scoring criteria and applicable discounts such as preferred member loan pricing. Rates, terms, & conditions subject to change at any time. The rate listed indicates automatic payment made electronically (not using cash, coupon book or check mailed to credit union to repay your loan). Add 1% to rate listed when using cash, check or coupons (non-electronic or automated payment method).
