Looking to score a deal on a new car? You’re not alone. But with supply chain issues driving up prices, it’s harder than ever to get a discount. In fact, according to J.D. Power, the average discount for a brand new car in July 2021 was just 4.8 percent of MSRP – an all-time low. But don’t give up hope just yet. Here are some tips to help you negotiate like a pro:
- Know your bargaining power: The demand for a specific make and model can influence the dealership’s willingness to negotiate on price. If the car is in high demand, then the dealer may be less likely to budge on the price.
- Timing is everything: The time of year can also impact the dealership’s willingness to negotiate. Towards the end of the year, dealerships may be more inclined to negotiate to meet their sales goals.
- Use your leverage: If you’re trading in a vehicle or plan to pay in cash, these factors may give you more bargaining power.
- Do your research: It’s important to research the market value of the car you’re interested in, so you have a good idea of the fair price.
- Get creative: If the dealership won’t budge on the car’s price itself, try negotiating things like warranty, service packages, or other additional features.
While it may not be easy to get a significant discount on a new car in today’s market, there are still ways to improve your chances. So, do your homework, be willing to walk away, and negotiate where you can. Happy car hunting!
My Experience Negotiating Prices at Car Dealerships
As a car blogger, I’ve personally been to dozens of car dealerships over the years, negotiating prices on everything from entry-level sedans to high-end luxury sports cars. Although every dealership and salesperson is different, I’ve noticed some general trends and strategies that can be helpful for anyone looking to save money on a new car.
Now, with the current market snarl, dealerships are unwilling to reduce the cost of a car. In July 2021, J.D. Power estimated the average discount for a brand new car to be just 4.8 percent of MSRP, an all-time low in the midst of the strained supply of dealers. However, that doesn’t mean it’s impossible to get a good deal. With the right research and tactics, you can still negotiate a fair price on a new car.
In this article, I’ll share some tips and tricks that I’ve learned from my experience negotiating prices at car dealerships, as well as some recent updates on the current market that will affect your bargaining power.
Reading Up on the Current Car Market
Before beginning your car buying journey, it’s important to understand the current state of the car market. In recent years, there has been a shortage of new cars due to chip shortages and factory closures caused by the pandemic. This has led to higher prices and lower discounts from dealerships.
Key Point: The current car market is not in favor of the buyer, with prices being high and discounts being low.
Understanding the Dealership’s Pricing and Policies
Knowing how car dealerships price their vehicles and what policies they follow can help you negotiate a better deal. Dealerships typically markup the price of a car based on the manufacturer’s suggested retail price (MSRP), which is the price suggested by the carmaker itself. However, this markup is not always fixed and can vary from dealership to dealership.
Key Point: Dealerships typically markup the price of a car based on MSRP, but this markup can vary from dealership to dealership.
Knowing When and How to Negotiate
Timing is everything when it comes to negotiating a better price. Dealerships may be more willing to offer discounts on certain days of the week or certain times of the month. In addition, it’s important to take the time to build a rapport with the salesperson and show them that you are serious about making a purchase. This can make them more willing to negotiate on the price.
Key Point: Timing is important when negotiating, and building a rapport with the salesperson can make them more willing to negotiate.
Highlighting My Qualifications as a Serious Buyer
When negotiating with a dealership, it’s important to show them that you are a serious buyer. This can be done by providing proof of financing pre-approval or showing them that you have done your research on the vehicle and its competitors. Dealerships are more likely to offer discounts to serious buyers who are ready to make a purchase.
Key Point: Highlighting your qualifications as a serious buyer can make the dealership more willing to offer you a discount.
Making My Best Offer and Staying Firm
Once you have done your research and built a rapport with the salesperson, it’s time to make your best offer. This offer should be based on your research and should be lower than the MSRP. Once you have made your offer, it’s important to stay firm and not budge on the price. Dealerships may try to tell you that they cannot go any lower, but if you stay firm and confident, they may be more willing to negotiate.
Key Point: Make your best offer based on your research and stay firm and confident in your negotiation.
Exploring Other Options for Savings
If the dealership is unable or unwilling to offer you a discount on the price of the car, there may be other options for savings. This can include negotiating for free upgrades or accessories, such as a sunroof or leather seats. You can also explore financing options to see if you can save money on interest rates.
Key Point: There may be other options for savings beyond the price of the car, such as free upgrades or better financing options.
Accepting a Fair Deal and Making the Final Purchase
Once you have negotiated a fair deal, it’s important to accept the offer and make the final purchase. Before doing so, however, be sure to read over all of the paperwork and ask any questions you may have. You should also take the time to inspect the vehicle and take it for a test drive.
Key Point: It’s important to accept a fair deal, but also take the time to inspect the vehicle and read over all paperwork.
Tips for Getting the Best Possible Deal on a New Car
To summarize, here are some tips for getting the best possible deal on a new car:
- Research the current market and understand pricing and dealership policies
- Build a rapport with the salesperson and show them that you are a serious buyer
- Make your best offer based on research and stay firm in your negotiation
- Explore other options for savings beyond the price of the car
- Accept a fair deal after inspecting the vehicle and reading over paperwork
Final Thoughts: The current car market may not be in favor of the buyer, but with the right tactics and research, it is still possible to negotiate a fair deal on a new car. Remember to stay firm and confident in your negotiation, and don’t be afraid to explore other options for savings beyond the price of the car.