Step 5: Negotiating A Fair Price
Haggling For A New Car
To begin negotiating the price of the new car, tell the salesman you have the True Market Value price from the Edmunds.com website. If they are unfamiliar with this pricing system, tell them this figure represents a profit for them and a fair deal for you. It is also good to let them know the figure has been tested with dealers and should be competitive in the marketplace.
Chances are the dealership will offer MSRP or slightly below it. Now is your chance to tell him what you have in mind. Don't be hesitant to let the salesperson know that you know the dealer cost, or invoice. Explain that you also know the cost of each option, and that you know about any applicable incentives and rebates. You should also know about holdback, the money that the dealer receives from the manufacturer for keeping an inventory on the lot, though do not expect holdback to be negotiable unless you are ordering a car directly from the factory.
Now it is up to the salesperson to make a counteroffer. The salesperson may feign shock at your initial offer, but whatever you do, do not offer more money until you get a counteroffer. The dealer may pressure you to come up with a better opening offer, but if you jump the gun and give them a better offer just because they whine, expect them to whine some more. In fact, by not waiting for a counteroffer, you will be doing serious damage to your own credibility as a negotiator.
From the time you make your counteroffer, you are immersed in the negotiations. If your opening offer brought a reasonable counteroffer, then try to anticipate the dealer's next counteroffer. In other words, with each succeeding offer, you and the dealer should be getting closer and closer to your target price.
