Buying a Car: The Best Bargaining Techniques when Buying a Car from a Dealer

Back in 2005-2007, I used to sell vehicles. I was the #2 top selling sales person at both of the stores of where I worked. When I was working at a high volume dealership, I was averaging about 23 vehicle sales a month. I felt that I could provide the insight necessary on what consumers could do to purchase vehicles with ease, from the seller’s perspective.

Here are my best tips on negotiating the purchase of your next vehicle:

  1. Buy your car on Tuesday or Wednesday.  Preferably Tuesday.  The dealership is empty.  No one buys anything.  Sales people sit around and do absolutely nothing.  They’re dying to just find anyone or anything to talk to.
  2. Figure out how to get your sales person a bonus. Sales people get paid from $50-100, depending on the dealership, for a deal with no money.  If the sales person you’re dealing with gets paid a $150 bonus for selling two cars on a weekday, or $300 for selling four cars on a weekend, make him work for you.  If he’s already sold a car that day, you’re more inclined to have him try to earn his bonus, because his commission isn’t going to do anything on just one loser deal.
  3. Tip your sales person.  It’s the same thing as tipping a waiter.  Sales people in the car industry work on something called a draw.  A draw is a salary of minimum wage against commission. If I’m selling you a car and I only make $50 on the deal because it is so much of a loser deal, and the average sales person sells 8 cars a month, then I’m looking at a truly grim payday.  If you incentivize me to work for you, then I’m more than interested in making sure you get the best deal possible.
  4. Find the oldest new car on the lot. After 90 days, the dealership gets charged for the car that they keep on the lot.  Those monthly fees can add up quick.  No one wants to lose money by holding onto their inventory, so they are more than willing to significantly lower the price on old inventory.
  5. Buy a car that no one wants.  How many people do you know own this vehicle?  Acura ZDX.  Want to know how many I know? Zero.  If you look at my profile and see where I currently work… That says A LOT!  If all you cared about was the absolute best deal possible, then this is the car you need to buy.  I’m 100% certain that you can buy this car for less than cost.  You can probably even buy this car for thousands under cost.  This car will most likely be the best deal you’ll ever have in your life.  But will you look cool in your car?  Um…………… So…. To the next step……..
  6. Understand the Four Square.  There are four things you are negotiating in those boxes that you’re presented with after you test drive a car and fall in love with the vehicle.
  • Your Trade In
  • The Cost of the Car.
  • Your Down Payment.
  • Your Monthly Payment.

Your Sales Consultant is trained to focus on three of the boxes.  First, your trade in.  There is a 100% fact that you will not get the KBB pricing of the Fair Market Value for your vehicle.  Why?  Because Trade In prices are based off of what your car will sell for auction.  In California, the standard is Manheim Auctions.

The price you want to get for your trade in can’t be far fetched.  Getting “top dollar” for your vehicle as the “Fair” or even “Good” value is quite impossible at a dealership.  Your best bet is to sell your car to Carmax, from where you will at least $1,000 more than the dealership’s top offer would be, or to sell your vehicle private party.

The cost of the vehicle is next.  This is usually something that the sales consultant does his best to avoid.  He usually tries to push you back into the down payment or monthly payment areas to see what fits in your budget.

Instead, focus strictly on the price.  Ask to see the dealer’s cost sheet.  The cost sheet will show the invoice price of the vehicle.  (No, dealerships do not have two lists, one with fake pricing and one with the real pricing…  They only have one…)  Look at the invoice price.  Your goal is to get them to sell you the vehicle at that price that is listed there or below it.  If you go to a heavy volume dealership, your chances of getting the number under the invoice figure are much higher than at a low volume dealership.  The high volume dealership can take the loss.  The low volume dealership needs every penny they can get.

Ignore the other two boxes completely.  Don’t even look at the payment or down payment boxes.  Instead, go to a credit union in your area to secure financing.  The best two in California would be Kinecta Federal Credit Union or Lockheed’s Credit Union.  They offer the absolute best rates.  Unless you’re going for one of those 1.9% APR deals.  Then that’s the way to go.

Now, before anything, ask for a print out of an itemized break down of all the fees associated to the purchase of the vehicle.  The only parts that should be filled out are the price of the vehicle, the taxes, and the fees associated to registration.

There shouldn’t be a gap contract, an extended warranty, an alarm, or anything else.

From here, you would agree upon the deal and enter the finance office.

Now, it would be up to your discretion, if you decide to buy gap or any other type of insurances for your vehicle.  Gap is usually presented at $795.  You can get it for $395, but you may want to check with your lender first.  Some lenders already build something like Gap into their contracts prior to financing you your vehicle, others don’t.

If you decide that you need to buy an extended warranty for the vehicle, do it later.  Wait until after you purchase the vehicle, call the manufacturer of your car directly, and buy the warranty from them.  You will save yourself from paying for any unnecessary fees in the process.

Then, you can leave the dealership with a brand new vehicle at the lowest price possible.  Instead of having to negotiate, you have someone who knows the ins and outs of the business, your sales person, working for you for an extra $100.  And last but not least, you will be able to get the deal of a lifetime.

However, this is really only if you want to go through all the hassles of visiting a dealership and wasting about three to five hours of your life.  Even the fastest deals I’ve pushed through straight to finance…. The shortest time I’ve ever had a customer in the office was three hours.

My personal recommendation would be to skip going through any of these steps at all.  Test drive the vehicle you want at a dealership.  Leave.  Locate an auto broker.  An auto broker works for you, not the dealership.  They do all the negotiating and the paperwork for you and they usually deliver the car straight to your home.  All you have to do is tell them what you want, and they’ll work to achieve it.  They’re experts in the field and they know how to get you the absolute best price possible. However, be wary.  Some brokers are out for your best interest, and others want to make a small fortune off of you.

Good luck on your journey to purchase a vehicle, and if you need any help or recommendations, feel free to reach out to me at any time!

By the way… 


I used to work at a heavy volume dealership.  My customers who ended up entering the office late had to stick around in the finance office until 1:00AM in the morning!  That meant I had to stick around until 1:00AM as well.  I was always late to work every day because of people like this.  There was no way in the world I could ever make it to work before 10:00AM.  But then again, I was working 15 hour days and selling more than anyone else, so I guess that didn’t really matter to upper management.


I’ve never sold a car for less than $250 under MSRP in the rain.

If you’re dealing with a good sales person, they will make you go out with them in the rain to play with the vehicle and get drenched with you.  Then when you go to negotiate, you’re going to feel bad for the poor fellow who got drenched in the rain and ruined his expensive suit just for you.  Then you’ll pay top dollar, because we’re all emotional creatures who have hearts.

Originally posted on Quora.

Leonard Kim is Managing Partner at InfluenceTree. At InfluenceTree, Leonard and his team teach you how to build your (personal or business) brand, get featured in publications and growth hack your social media following.

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