How to Bargain to Buy a New Car

You can negotiate for the car of your dreams.
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Buying a new car isn't like buying groceries or paying for a haircut, where the prices are fixed--you see what they cost and if you want the service or items, you pay for them. The car-buying process features much more flexibility if you know what you're doing. There are many negotiable areas in a car purchase. Knowing how to bargain with the dealer can save you thousands of dollars in the end.

Step 1

Narrow the field. The search for a new car will go more smoothly if you limit your search to the top two or three models that interest you. Once you have your short list--taking into consideration mileage, look, safety and durability--you can approach the dealerships that sell those particular models.

Step 2

Research what dealers in your area paid for the cars. There are several online resources--including you plug in your zip code, the car's information and options to discover the dealer invoice price for that make and model. You can then use the same source to discover the holdback amount, i.e., the rebate given to dealers for each car they sell. Knowing what the invoice and holdback amounts are for each car reveals how much wiggle room the dealer has with the final sales price.

Step 3

Look for rebates. Many dealerships offer cash-back rebates through advertisements. If you buy the make and model described in the ad, the dealer must fulfill the rebate offer. Researching and gathering information about rebate offers can help you decide which car to purchase.

Step 4

Obtain quotes. Before going to the dealership, go online and gather several email quotes for the make and model of vehicle you want to buy. This can cut a lot of haggling out of the process because you are not face to face with the dealer. Once you plug in the information about what you're looking for, you'll know which dealers in your area are selling that car, as well as their initial sales offers. You can get quotes from many sources, including Yahoo quotes and, or directly via the dealerships' websites.

Step 5

Visit the dealership that offers the best price. Bring a folder with all your research notes. Tell the dealer you are going to buy this particular model within the next few weeks and you already know what options you want. Then ask the salesman what the lowest price possible is for the car you want.

Step 6

Negotiate for a reduced price. The dealer can cut into the holdback rebate to make the sale. Be prepared to show the salesman your research. Also understand that the salesman's job is to get you to pay as much as possible. Walk out if necessary and tell the salesman you're sure you can get the car elsewhere for a fair price. If the salesman doesn't stop you from leaving there is a good chance he'll call you within the next few days offering a new price.

Step 7

Add options. Once you've found the lowest possible price, ask the salesman to throw in some options free of charge. All he can say is no, and in the effort to make the sale, he may say yes. For example, you can ask him to toss in an upgraded stereo system at no additional cost.

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