A proven process to negotiate the best price on a new car

ID-100148394Receiving the best price on a new car is a complicated process. Your first steps should be to figure out how much you can afford to pay. That will drive the next decision deciding if it should be new or used and if you should finance the car or lease it. While these factors are critical, they are not going to be covered in this article. Rather, I am going to assume that you have gone through this process and decided to buy a new car. Now the goal is to make sure that you have the best price on a new car.

Buying a car for the lowest possible price is not easy. The biggest problem is that you are an amateur at getting the best price on a new car, and you are playing with professionals. You may have a low opinion of car sales organizations, but they do this for a living. You probably buy a car every 2-5 years. The sales team (especially the managers) sell cars every day and have been doing it for years. They have refined their skills like a professional basketball team. Just like you probably couldn’t beat Dwayne Wade in a game of one-on-one, you are going to struggle beating these experts if you do not have a plan. Actually, if you follow my suggestions, this process is closer to having Dwayne Wade play Lebron James and you getting credit regardless of the winner allowing you to get the best price on a new car!

To get the best price on a new car you start by going shopping!

The first step to get the best price on a new car is actually quite fun. Go to a dealer of every car manufacturer that you can reasonably afford. You need to find your favorite two or three cars. This will likely take a bit of time as you will need to visit and test drive quite a few cars. Every dealer is going to have a highly-motivated salesperson deal with you. That salesperson is going to try to get you to sign – DON’T make any commitments. This is actually the hard part of the entire search process – you have to say, “I am not ready to buy yet.” It is very important that you do not commit anything to this salesperson during the shopping process. Your job is to shop and that means sitting in the cars, pushing the buttons, adjusting the seat, and taking the vehicle on a test drive.ID-100180337

During the shopping process, you need to select the features that you really want in a car, and you need to select the exact model of car you want. You will do this for your favorite two or three vehicles. You should be as absolutely specific as you can in this specification. You need to have a written description of each car down to the color, power seats, moon roof, and any packages or add-ons that you need. When you find the exact model that you like, take out your cell phone and take a picture of the window sticker. This will allow you include on any details that are important to you when you start negotiating the best price on a new car.

It may take several weeks or even a couple months to go through the shopping process. That is fine. Salespeople will be calling you and offering you deals – don’t take them. In fact, they may be offering end-of-the-week/month/quarter/season deals. You should thank them for the offer but don’t accept any deal. To every single deadline, simply reply, “I am not ready to buy yet.” Trust me, there is no expiration on deals from any dealer and those deals will be there later so you can get the best price on a new car.

The only expiration that should compel you to move faster is a manufacturer’s special. These actually do expire and the dealer typically cannot get an extension. Be cautious and don’t believe a salesperson that tells you the rebate ends at the end of the month. Ask for details of the rebate in writing from the manufacturer. If it really is an expiring deal from the manufacturer, it will be in writing on a piece of paper that comes from the manufacturer. I am not saying the dealer salesperson is lying to you on the expiration, but it is possible that he or she has been misinformed on the details of the program.

If a manufacturer’s special is expiring on a model of car that looks like will be in your top three, then you may need to accelerate your shopping process. This is unfortunate, but it is reality.

Go to Edmunds.com or KBB.com to help with the best price on a new car

Now that you have selected your top two or three vehicles, you can start the next part of the process of getting the best price on a new car. You should have a photo of the window sticker that describes the exact features and options of each car that you would like to purchase. You should also have your list of favorite cars prioritized.


Open the photo of the sticker of your favorite car. Go to Edmunds.com or KBB.com (or both). Fill out the forms and select your exact car as precisely described by your photo. Both sites will give you a suggested price in your region of the country. They will also offer to help you with a car loan – you will want to record the annual percentage rate (APR) of that typical loan. Using that suggested price and that APR go to a loan calculator (here is a good one) and decide if you can afford the car. If it is close, you may still be okay by the end of the negotiation process. If the monthly payment is way off, you will need to reconsider the car that you chose, the options on the car, or if you should investigate a used car instead. You can do this same exercise with a leasing calculator (the one I linked to earlier helps with that) and you may want to reconsider the buy v. lease decision. Also, it is likely that your second choice or third choice car has fewer features and, therefore, is a bit cheaper.

Assuming that you can afford the monthly payment, you must now start the negotiation process. This is where Lebron gets to beat up on Dwayne while you watch.

At the bottom of the car selection process, both sites (Edmunds and KBB) will give you suggested dealers for that car. You should select 5 dealers, not including the dealer that you found the car. If you cannot find 5 dealers, use the other site to try and find more. You really want 5 dealers that are within a 2 hour drive of each other but you don’t want that list of 5 to include the dealer that is closest to your home.

When you find the 5 dealers, you will communicate to each of them telling them you are planning to buy this exact car in the next 48 hours and you want the best price on a new car. The sites make this very easy. Tell them you want their best price on a new car and you are going to buy this car for the best price available. Tell them you want their written answer in the next 12 hours. Don’t let them give you the monthly payment as this includes more variables than you can compare. You need the best price on a new car. You can assume that any financing deal is available from all dealers that sell the same vehicle. Banks don’t favor one dealer over another and any financing from the manufacturer is going to be available to any of the brand’s dealers.

You will receive 5 or more competitive quotes for the same car. One of them will be the lowest. Send a note to the other dealers and tell them that you have a quote for the exact same car for a lower price. Ask them if they would like to re-quote for the car. Remind them in your email that you are buying this car in the next 36 hours. You will now get the rock-bottom best price on a new car for the exact car that you want to buy. It is very likely lower than the suggested retail price that KBB and Edmunds published. If you are concerned with your monthly payment, repeat the loan or lease calculations from above.

Print the email of the best price on a new car that you received. Call the salesperson of the dealer that is most convenient to you. Tell him/her that you will be in later that afternoon to buy the car. You should plan to arrive with about 90 minutes left in the dealer’s hours. Arriving late in the day can help you as the entire sales team will be anxious for one more car purchase at the end of the day. Take that email and go to the dealer that is most convenient to you. Tell the salesperson that you are ready to buy the car. Hand him the email and tell him to match the price and you will sign the deal today. He will run off and talk to his manager about the weather or sports for awhile. He may come back and explain that he offers lifetime oil changes, car washes, and supports the local little league team. Tell him that you really don’t care – match the best price on a new car and you will sign. If he doesn’t match the price, you will be driving to the dealership that gave you the best price on a new car and will buy it there.

One of the common tricks the salesperson will tell you is that you will be one of the special people at the service desk for maintenance. Don’t believe him! Most profit in a dealership comes from the service department. The service manager will show you as much attention (or maybe more) if you have bought from another dealer. The service manager has a revenue and profitability number to hit each month. He doesn’t care if that number is earned by providing great service to people that bought the car elsewhere.

I have never seen the dealer not match the price. It may take 10 or 15 minutes but never longer than that amount of time. You will not be pressured by him because he has to agree to the price. You know that you can receive that best price on a new car from his direct competitor, so any offer that is higher is simply rejected. In this case, Dwayne Wade is not playing you, he is playing Lebron James but you get to declare the win regardless of the score!

ID-100174772After he agrees to the best price on a new car, you still have one very difficult process to get through. You will need to sit in front of one of the best salespeople in the company – the finance manager. This is the person that is going to print out all of the different forms for you to sign. You may think this is just a loan officer or a clerk but that is not the case. This is one of the most profitable salespeople in the business. While you are signing all of the loan documents, you will receive a pitch for a lot of extras that make a ton of money for the dealership.

One of these offers that you should refuse is going to be gap insurance. GAP stands for “Guaranteed Auto Protection.” Gap insurance is designed to cover the difference between the cost of paying off the loan and the value of the car. As soon as you drive your new car off the lot, you will lose money. This is a big reason that many people do not buy new cars but instead buy used cars. If you get hit by a truck on the way home and total your brand new car, the value of the car will be less than the value of the loan even if you have only owned the car for 15 minutes. This is unfortunate but not overly likely. While we can never predict when we will be in an accident that destroys your car, it is thankfully not an extremely common occurrence. It has probably only happened to you a couple times in your life, so there is little expectation that it will happen in the next couple days after buying the car.

One of the benefits of getting best price on a new car is that this gap is much less than if you get a bad deal. Your insurance company will likely cover you at a fair market value which should be more than you paid for the car (it is likely to be close to the fair market value from KBB.com). Also, this is one of the reasons that you have a 6-month emergency fund. That emergency fund is designed to take care of these unlucky events in our lives. If you have an emergency fund, you are probably “self insured” for the gap in value. If you are concerned about this, you should do some shopping in advance of walking into the showroom on the final day. A few inquiries to insurance companies on the web or phone calls to agents will give you a great idea of how much gap insurance costs when not bought from the dealer. If the dealer is higher than your previous offers, you can refuse it and you will know that all of the other offers are overpriced. I would be amazed if you could not find cheaper gap insurance without the dealer being involved.


I think the favorite offer by the finance manager is interior treatment. He will tell you about wiping up a spill last week in his personal car and it was amazing – the spill magically disappeared. You need to tell him that a can of Scotchgard Auto Protector costs about $15 from the local car parts dealer or Amazon. For that minuscule investment and 15 minutes of time, you will have exactly the same coverage as his high priced service.

At the end of all of this work, you will drive off the lot with a great car that you love. You will have purchased the car for the lowest price around. You will be comfortable that you didn’t get screwed in the negotiation process. When your friends ask you about the deal you negotiated, tell them the highlights about how to get best price on a new car and send them a link to this article. I hope you enjoy your car.

The car price sticker image is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, is used by permission of it creator, and was originally found here.
Car loan image courtesy of Stuart Miles / FreeDigitalPhotos.net
Man in car image courtesy of Naypong / FreeDigitalPhotos.net
Cartoon salesman image courtesy of Grant Cochrane / FreeDigitalPhotos.net
Front of car image courtesy of David Castillo Dominici / FreeDigitalPhotos.net


  1. No discussion of your trade-in? Most of us have a car we need to be rid of.

  2. Author

    Buying and selling a used car is far more difficult than a new car. I wanted to separate the two transactions because they need to be separated. Many people will do a bad deal for one while doing a good deal on the other. The end result is a bad deal overall. The used car conversation will occur in a separate article in the future.

  3. Use Carmax for a cash value quote before you go in to the dealer. It’s not the highest you’ll get, but they are usually competitive and at worst you can take the car to them if the dealer is being a pain.

  4. Author

    Great suggestion, Harsh. Selling your used car is a massive risk and the best way to do it is to get multiple people bidding for the car. Competition can drive up the price or at least confirm that you have the best price.

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