Drive Home a Deal: How to Negotiate Your Car Purchase Like a Pro
Buying a car is an exciting experience, but many buyers feel unsure or overwhelmed when negotiating the price. The good news? You can leave the dealership with the best possible deal with the right strategies and preparation. Whether you’re purchasing new or used, knowing how to negotiate effectively can save you thousands of dollars.
At PDCU, we’re committed to helping our members get the car they want at a price they can afford. And with a pre-approval from us, you’ll have a powerful bargaining tool to use at the dealership. Here’s how to negotiate your car purchase like a pro.
1. Do Your Research Before You Walk In
One of the most essential steps to a successful car negotiation is research. By understanding the fair market value of the car you want, you’ll know what’s reasonable to pay. Resources like Kelley Blue Book (KBB) and Edmunds can give you a sense of the vehicle’s value based on make, model, year, mileage, and condition.
Key Points to Research:
- Fair Market Value: Know what the car is worth and what other buyers pay.
- Manufacturer Incentives: Many dealerships offer manufacturer rebates or special promotions that can lower the price. Be sure to ask about any current deals.
- Local Listings: Check other dealerships and online listings to see how similar cars are priced in your area.
Walking into the dealership with a clear understanding of the car’s value shows the salesperson that you’ve done your homework, putting you in a stronger negotiating position.
2. Get Pre-Approved for a Loan
One of the best ways to increase your bargaining power is by getting pre-approved for an auto loan before heading to the dealership. With pre-approval, you’ll know exactly how much you can spend, and it allows you to negotiate as a cash buyer—making it easier to focus on the price of the car without being tied to dealer financing.
Why Pre-Approval Helps Your Negotiation:
- Stronger Position: A pre-approval letter shows the dealer that you are a serious buyer with financing, giving you leverage to negotiate the best deal.
- Avoid Dealer Financing Traps: Many dealers offer financing that seems appealing upfront but comes with hidden fees or higher interest rates. With pre-approval from People Driven Credit Union, you can skip this and focus solely on negotiating the price.
- Clear Budget: Pre-approval helps you stick to a budget, ensuring you don’t get talked into a vehicle beyond your financial comfort zone.
Apply for pre-approval at People Driven Credit Union and be ready to negotiate with confidence, knowing your financing is already secured.
3. Negotiate the Price, Not the Payment
A common tactic used by dealerships is to focus on monthly payments rather than the overall price of the vehicle. While a lower monthly payment might seem like a win, it often means extending the loan term and paying more interest over time. Instead, keep the conversation focused on the total price of the car.
Tips for Focusing on the Price:
- Ask for the Out-the-Door Price: This includes the total cost of the car after taxes, fees, and any add-ons, so there are no surprises.
- Avoid Extras You Don’t Need: Dealers often try to add on features like extended warranties, service packages, or other extras. Stick to the essentials and negotiate these down or ask to remove them.
- Be Willing to Walk Away: If the dealer isn’t willing to meet your price or continues to focus on monthly payments rather than the total price, be prepared to walk away. This can often shift the negotiation in your favor.
When you know what you can afford and stick to the overall price, you’ll avoid overpaying in the long run.
4. Time Your Purchase
Timing can play a major role in getting a great deal. Dealerships often have quotas to meet, and salespeople may be more willing to negotiate at certain times of the month or year.
Best Times to Buy:
- End of the Month or Quarter: Salespeople are often more motivated to make a deal to meet their sales goals.
- Holiday Sales Events: Major holidays like Labor Day, Memorial Day, and Black Friday are prime times for dealerships to offer discounts and promotions.
- End of the Year: Dealerships need to make room for next year’s models, so they often discount current-year inventory to clear their lots. This is a great time to get a deal on a new car.
You can increase your chances of getting a better price by purchasing at the right time.
5. Don’t Forget Trade-In Negotiation
If you’re trading in your old vehicle, treat this as a separate negotiation from purchasing your new car. Dealers will often try to bundle the trade-in with the purchase to obscure the actual value of both. Make sure you know the trade-in value of your car before going to the dealership, and don’t be afraid to negotiate that price as well.
How to Maximize Your Trade-In:
- Get Multiple Offers: Don’t rely solely on the dealership. Use online tools like CarMax or Kelly Blue Book to estimate your car’s trade-in value.
- Negotiate Trade-In Separately: First, focus on getting the best price for your new car. Then work on getting the best deal for your trade-in.
- Consider Selling Privately: If the dealer’s trade-in offer is too low, consider selling your car privately. You may get more money this way, though it requires more time and effort.
Maximizing your trade-in value is a great way to offset the cost of your new vehicle.
Boost Your Bargaining Power with People Driven Credit Union
Negotiating your car purchase can be a rewarding experience when you come prepared. By doing your research, getting pre-approved for a loan, and focusing on the total price—not just the monthly payment—you can secure a fair deal and drive home happy.
At PDCU, we offer our members auto loan rates and pre-approval options that give you the upper hand at the dealership. Apply for pre-approval today and take control of your car-buying journey like a pro!
Own the Road for 4.99%¹ APR*
Same low rate whether you’re buying new, used, or refinancing.
Drive off with payments as low as $18.87 per $1,000 borrowed†
*APR = Annual Percentage Rate. Rate available for qualified borrowers financing new or used cars, trucks, and SUVs, or refinancing an auto loan from another lender.
Loan terms up to 72 months. All loans subject to credit approval and membership eligibility.
†Example payment: $18.87 per $1,000 borrowed at 4.99% APR for 60 months.
Loans must close within 30 days of application. People Driven Credit Union is an equal opportunity lender.
