How to Haggle at a Car Dealership: Top Tips for Negotiating the Best Deal

Buying a car can be an exciting, yet nerve-wracking experience, especially when it comes to negotiating the price.

The idea of haggling at a car dealership may seem intimidating, but with the right approach, it can save you a significant amount of money.

In this guide, we’ll break down the art of negotiation step by step, ensuring you’re well-prepared to walk away with a great deal.

Do Your Homework: Research Before You Go

The key to any successful negotiation is knowledge.

Before stepping foot in a dealership, arm yourself with as much information as possible about the car you’re interested in.

Start by researching the market value of the vehicle. Websites like car pricing tools can give you a rough idea of the car’s average cost.

Don’t stop there – look into the dealer’s invoice price too. This is the amount the dealership paid for the car, which is usually lower than the price they’re asking. Knowing this number gives you a solid foundation to negotiate from. Additionally, check customer reviews about the dealership and understand any potential fees they may add on. The more informed you are, the stronger your bargaining position will be.

To further prepare, check out our page on how much will a dealership come down on price on a new car in the UK to get a better idea of what to expect when negotiating.

Time Your Purchase Wisely

When you buy a car can be just as important as how you negotiate.

Dealerships often have monthly, quarterly, and yearly sales targets. As these deadlines approach, salespeople may be more inclined to cut you a better deal to meet their quotas.

The end of the month is generally a great time to visit, as salespeople are often keen to finalise deals. The same goes for the end of the financial year when dealerships try to clear stock.

Also, consider timing your visit for when new models are released, as this is when they’re looking to offload older models.

If you’re paying for your car with cash, you’ll want to read our comprehensive guide on how to pay cash for a car at a dealership for tips on how to navigate the process.

Understand the Dealership’s Profit Margins

To haggle effectively, you need to understand how dealerships make money.

The manufacturer’s suggested retail price (MSRP) is often higher than the dealer’s actual cost, known as the invoice price. Dealerships aim to make a profit between these two figures. Your goal is to negotiate as close to the invoice price as possible.

Additionally, be aware of “holdback” – a percentage of the car’s cost that manufacturers refund to dealerships after a sale. This is why some dealerships are willing to go below the invoice price, as they make money back later.

Understanding these dynamics allows you to gauge how low the dealer might go during negotiations.

Be Ready to Walk Away

One of the most powerful tools in your negotiating arsenal is the willingness to walk away.

If the dealer senses that you’re desperate, they’re less likely to offer a good deal. By showing that you’re prepared to leave, you gain the upper hand.

Walking away doesn’t have to be the end of the conversation, though. Salespeople will often reach out to you later with a better offer, especially if they need to meet a sales target.

Keep in mind, it’s all part of the negotiation dance. Stay calm and composed, and don’t be afraid to walk out if the deal isn’t right.

If you’re unsure about the dealership’s practices, read what to do if a dealership sells you a faulty car in the UK to protect yourself and your purchase.

Start Low and Be Prepared for Counteroffers

When it’s time to make your first offer, start lower than the price you’re ultimately willing to pay.

This gives you some wiggle room as the salesperson will likely counter your offer.

For example, if you know you want to pay £25,000, you might start with an offer of £23,000. This way, even if the dealer counters, you’ll likely end up around your target price.

Remember, the goal is to meet somewhere in the middle, so always leave room for negotiation.

Negotiate Beyond the Sticker Price

Haggling doesn’t stop at the sticker price.

There are often additional fees and add-ons that dealerships will try to include, such as extended warranties, gap insurance, or protection packages. These extras can significantly inflate the cost of the vehicle.

Be prepared to negotiate on these as well. In some cases, you might be able to get them included for free or at a discounted rate.

However, it’s important to know which extras are worth it and which ones you can do without.

For example, many people find extended warranties unnecessary, especially if the car already comes with a solid manufacturer warranty.

Leverage Trade-Ins as Part of the Deal

If you have a vehicle to trade in, this can be a useful bargaining tool.

However, dealerships often offer less than the market value for trade-ins, so it’s crucial to know the true value of your car before heading to the dealership.

Websites that offer free valuations can give you a good idea of what your trade-in is worth. Use this information to negotiate a fair price.

If the dealership is unwilling to meet your expectations, consider selling your car privately, where you’re more likely to get a better return.

Use Financing to Your Advantage

Financing is another area where you can save money.

Dealerships often partner with banks and finance companies, and they make a profit by selling you a loan. However, these loans might not always offer the best rates.

Before you visit the dealership, shop around for financing options from other lenders. Having a pre-approved loan gives you more negotiating power.

You can then compare the dealership’s offer and see if they’re willing to beat the rate you’ve already secured. Even a small difference in interest rates can save you hundreds over the life of the loan.

If you’re interested in understanding more about financing and costs, check out how to pay for a car at a dealership for an in-depth guide.

Be Polite but Firm

Negotiating doesn’t mean being rude or aggressive.

In fact, a polite and respectful approach can go a long way. Salespeople are more likely to work with you if you’re courteous and professional.

Build a rapport with them, but stay firm on what you’re willing to pay.

It’s important to keep the conversation friendly but focused. Don’t get swept up in casual small talk that might distract you from the negotiation.

Know your limits and stick to them.

Know When to Close the Deal

Once you’ve reached a price you’re happy with, it’s time to close the deal.

But don’t rush through the paperwork. Carefully review all the terms and conditions to ensure there are no unexpected fees or charges.

If everything looks good, congratulations – you’ve successfully haggled your way to a better deal!

If not, don’t hesitate to ask for clarification or walk away if something seems off. After all, it’s your money, and you have the final say.

Conclusion

Haggling at a car dealership might feel daunting at first, but with the right preparation and approach, it becomes much easier.

By doing your research, timing your purchase, and staying calm and confident, you can walk away with a deal that suits your budget.

Remember, it’s all about balance – staying polite but firm, knowing when to push and when to step back.

With these tips in mind, you’re well on your way to becoming a savvy car buyer.

FAQs

Can you really haggle at any car dealership?

Yes, haggling is expected at most car dealerships. While some dealers may have fixed pricing policies, many are open to negotiation, especially on new and used vehicles.

How much can you typically negotiate off the sticker price?

It varies depending on the car model and dealership, but it’s not uncommon to negotiate 5-10% off the sticker price. Some buyers manage even more significant savings, especially if the dealership is keen to hit a sales target.

What happens if the dealer won’t budge on the price?

If the dealer refuses to lower the price, you can try negotiating for extras like free servicing or a better trade-in value. Alternatively, you can always walk away and visit other dealerships.

Are you looking to buy a new used car? Contact us today and we can help you!