How do I Buy a New Car From a Dealer?

Buying a new car from a dealer involves negotiation.
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There are a lot of benefits to buying a new car from a dealer. Your car will have a full warranty; it will be protected under lemon laws, and you can qualify for tax breaks. Buying a new car is also expensive, so it's important that you take the time to get the best deal you can. Successful negotiation with a dealer can save you thousands of dollars and may get you a few added benefits as well for no additional cost.

Step 1

Review your budget and determine how much you can afford to pay for a new car. Figure out the amount you can use as a down payment, how much you can afford to pay on a car payment each month and how much you can borrow while staying within your payment range. Use an auto loan calculator to double-check the amount so that you don't buy a car you can't afford.

Step 2

Shop around for a car loan preapproval. Ask for loan quotes from several different banks and finance companies, comparing the quote amounts and the loan terms to find the car loan that best fits your budget. Once you are preapproved, you'll be able to purchase a car whose total value is equal to or less than the sum of your down payment and preapproval amount. You'll only have to repay the actual amount that you borrow, even if it's less than your preapproval amount.

Step 3

Shop around at multiple dealerships to find cars within your price range that interest you. Take note of the sticker prices and listed features of similar cars at different locations. If a salesman comes out to talk to you, find out what you can about the car and ask how firm the sticker price is. Don't commit to negotiating a price on the car yet; tell the salesman that you have a few other cars that you're interested in but that you'll be back to discuss the car more later.

Step 4

Research the cars you found prices on and compare the sticker prices to the market or "blue book" value. Take note of any cars that are at or below the market value. Compare the various cars you're considering to find the one that has the best starting price for your negotiations, making sure that it comes with the features that you want.

Step 5

Return to the dealership that has the car you want and ask to speak to the same salesman you spoke with previously. Remind him of your previous conversation and say that you'd like to talk more about the car you have your eye on. He'll take you into an office where you can discuss specifics with more privacy.

Step 6

Tell the salesman that the car is a bit more than you'd like to pay, offering an alternative amount that is a few thousand dollars lower than the sticker price. If the market value price is significantly lower than what he's selling the car for, point this out as a basis for your price offer.

Step 7

Listen to the counteroffer the salesman makes, considering whether it's a significant enough discount from the sales price to make the sale. Make another offer if you feel his offer is still too high, pointing out that you're preapproved for a loan but telling him that he's asking for more than you can borrow. Make your new offer higher than your initial one, but still lower than what he's asking.

Step 8

Continue negotiating the price until you feel that he's made you a fair offer. If the salesman continues to ask more than the car is worth to you, don't be afraid to tell him so and leave if necessary. Avoid buying extras such as extended warranties that are largely designed to pad the bill.

Step 9

Finalize the sale, making sure that the sales contract is signed before you leave. Contact your lender with the final sale amount so the loan can be processed.

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