Tips for Negotiating a Vehicle's Price

Although finding an affordable new auto loan can be a stressful experience, it is usually not what consumers dread the most about the car-buying process. The exhausting price negotiations at the dealership are what car buyers typically fear. To ensure that the price negotiation process goes smoothly at the dealership, follow these tips.

• The higher-authority tactic. Anyone who has ever bought a car is familiar with this dealership tactic-you and the salesperson agree on a deal, but he must first get the approval of the sales manager. This is what's known as the higher-authority strategy, and it works for buyers as well. For instance, a husband negotiating with a salesperson might say he really wants to purchase the car, but his wife won't let him move forward until the price comes down.
• Always turn down the first offer. Whether the offer is on a new auto loan or the vehicle itself, always reject the first proposal. Salespeople never make their best offer right off the bat, so be prepared to turn it down. The absolute worst-case scenario is that the salesperson won't budge, in which case you take your business to another dealership.
• Show your outrage. Car buyers often operate under the mistaken assumption that they must stay calm during negotiations. This may be true with positive emotions, such as excitement over a good deal, but it doesn't apply to negative reactions, such as shock over an inflated price. Make sure you flinch when the salesperson makes you an unacceptable offer. Express your outrage and surprise over the deals you're offered, even if the price you're quoted is not completely unreasonable. Remaining stoic may help you contain your excitement about the car, but it will hurt you when it comes time to haggle. Don't be afraid to react to the interest rates you're offered on a new auto loan either.
• Use silence to your advantage. Buyers commonly make the mistake of talking too much during negotiations, and it ends up weakening their case. When used appropriately, silence can make the salesperson uncomfortable and eager to make you a better offer. After the salesperson makes an offer, simply respond with, "I'm sorry, but you'll need to make a better offer that that." Then be absolutely silent. Do not speak again until the salesperson has spoken. Let the power of your rejection hang in the air for as long as it takes to make the salesperson squirm.
• Make a minor concession at the end. To give the salesperson the impression of winning the negotiations, you should withhold a minor concession that you're willing to make until the end. For instance, if negotiating financing, you might agree to pay an application fee on your new auto loan at the end of the bargaining after you initially refused. Alternatively, you may at first refuse to pay the vehicle's destination charge (cost of moving the vehicle to the dealership via truck), but agree to it at the end to give the illusion of compromise.