Best ways to negotiate with a car dealer

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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, updated on June 9th, 2023       

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So, you’re buying a car. The bad news, for the global economy, is that it’s going down. The good news, for you, is that it’s driving down car prices. Consequently, you can now get your dream car for a lower price than ever before. Take advantage of that sweet deal. However, you’ll need some negotiating skills because there is nothing worse than being face to face with a dealer. Let’s see what you can do.

Do your research

First things first: you don’t just walk into a showroom – you do your research beforehand. Walking into the first showroom, with the intention to buy is a mistake. The dealer will be able to “smell” your lack of experience and you will get ripped off. Shop around a little, first; go online, look around some dealerships and only then get ready to buy.

Don’t be set on one car

One of the biggest mistakes you can make is to walk in and let the dealer know that you really, really want this one car. That will only ensure that they will raise the price as much as they can and will be completely unwilling to haggle because they know you want it. They hold the car, you want the car; thus, they hold the power. Instead, be vague and remain open to possibilities, even if you know exactly what car you want. The key is not to let your dealer know that.

Never accept the sticker price

The price that is advertised is never a fair price, you can be sure of that. It’s not final, either. That means that there is room to haggle. The trick is to get the dealer to say a number (preferably lower than the one written on the car), first. That way, you can gauge your counter-offer. Don’t go too low, but a full 15% lower is a good idea.

Don’t budge from your bottom line

If you say you can only spend a certain amount, whatever you do, don’t backtrack from that number. Don’t suddenly be willing to add to it, because the dealer will know that you were bluffing and will strengthen his position. A bottom line price is a bottom line price and make it clear that you cannot and will not go over it, for reasons outside of your control, if necessary.

Don’t “buy now”

“Buy now” is almost always a bad idea. All it’s meant to do is trick you into thinking that a) it’s a limited offer or b) someone else is going to get it before you. But you know for a fact that those are lies and that you are, in fact, the only potential buyer on the horizon. Don’t allow yourself to be fooled into thinking the “low, low price” they’re offering is only available on a certain day. After all, they’re trying to sell and any day is a great day.

Walk away

This is the ultimate power move that you always have up your sleeve if you need it. If the dealer is not willing to drop the price, all you need to do is walk away. Don’t make a spectacle of it, but let him know that you cannot afford their price and you are going to check out some other dealerships. Wanna bet he’ll suddenly reconsider?

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