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Negotiating the Best Car Price: What You Should Know

Get all the details on negotiating car price for the next time you head to the dealership.

Shopping for a new car can be a challenge, especially if you’re not familiar with the process. It's hard to know what questions to ask and how much you should actually pay. But don’t let uncertainty about negotiating prevent you from getting the best deal on a new or used car.

Negotiating is normal. When you find your perfect car, contact your local dealer to get their best price on that vehicle. If you don't like what they come back with, it's okay to see if you can negotiate or to go somewhere else until you're happy.

In this article, we'll cover everything from the cost of a new car to important questions to ask your dealer, plus tips and tricks for negotiating car price. Check it out!


What actually goes into a car price?

When you head to the car lot or browse online, you'll see plenty of numbers. But what actually goes into the cost of a new car?

The price of a car includes the base cost, which is the manufacturer’s suggested retail price (MSRP), along with other fees and taxes, like:

  • Title and registration fee 
  • Sales tax
  • Documentation fee
  • Destination fee
  • Advertising fee
  • Dealer preparation fee

You’ll find the MSRP on the window sticker at the dealership, but Kelley Blue Book is a good place to start when reviewing vehicle prices and expected trade-in values.

You may find that a dealer is trying to sell add-on services like protective coating on paint or additional security. These might not be negotiable, but it’s important to ask about unnecessary extras and how to opt in or out. 

How do you prepare to negotiate?

Being informed upfront will help you have more control when you do decide to make a purchase. So, once you know the MSRP and possible fees, there are a few more things to look at before you really start negotiating.

Get some information on the fair market range of the car you want. This is the price at which similar vehicles are selling at dealerships in your area.

It can also help to research dealer invoice prices to know exactly what the dealer paid the manufacturer for the vehicle. You can even ask a dealer for these so you know they’re being honest about what they paid.

Finally, one big tip: Before you head to the dealer, make sure you know what kind of auto financing options are available. That way you'll be more prepared to negotiate on factors like APR (annual percentage rate), loan term or whether there's a rebate on the purchase price. A great way to do this is by going to your own financial institution to talk about their lending options and getting pre-approved.

After you’ve prepared this information, you can start negotiating wisely.

What can you negotiate?

The things you can negotiate about car price include the down payment, loan terms, some fees and the value of your trade-in, if you have one.

Focus on how each of these things will affect the overall price of the car rather than on what your monthly payments will be. Even if you know how much you can afford to pay each month, it’s best to keep it to yourself so you can keep overall cost low. For example, dealers may offer longer loan terms which have lower monthly payments but cost more in the end. Keeping this in mind can help keep you from paying more than you want to.

Also consider negotiating these separately. If you discuss them as a package, it can be hard to tell what you’re actually paying in the end.

Be firm about asking to discuss the overall price of the car you’re looking at before you tell them any other information, including trade-in value. Otherwise, the dealer will factor in the value of the trade-in and leave you with a more expensive purchase overall.

So, how exactly do you start?

Negotiating the price of a car can feel overwhelming but there are straightforward places to start.

First, it may help to visit the dealership on the final days of a month. Oftentimes, manufacturers will offer incentives for sales quotas that can benefit your negotiation.

Questions you can use to kick off your negotiation include:

What is the dealer's bottom line price? 

  • What does this price include?
  • How does $X in total sound for the purchase of this vehicle?
  • Does your dealership offer any promotions or incentives right now?
  • Which additional fees do I need to expect when buying?

These questions can help you get your best deal, and ensure that you're not getting tricked into buying something more than what you want.

Remember: There are also situations when it's perfectly okay to walk away from a negotiation, like if the dealer tells you they won't go below their bottom line price or if they tell an outright lie. What's most important is doing what's best for you.


When you go to the dealership to negotiate a car price, remember to do your research, be firm and focus on going step by step to negotiate what you need. Ready to start looking? Find out how much you can afford with our vehicle loan calculator.