Auto dealerships have rebuilt inventory on their lots, and the pandemic-era buying frenzy has slowed. Dealer incentives are generally the most generous in years too, but, depending on the make and model, shoppers can still negotiate the price beyond those incentives.
Some vehicles are still in high demand with low availability, some still selling for more than its suggested retail price or MSRP. The dealership is not going to negotiate prices on those. But vehicles with availability on the lots — and not necessarily just slow-selling models — are worth negotiating beyond advertised discounts and incentives.
For buyers willing to negotiate, knowledge is their best bargaining chip.
“You know what the car’s market value is because you’ve researched it online. You can walk into a dealership and say ‘This is what I am going to pay. This is what I know the car is worth. If you can’t meet my price point, I am going on to another dealer,'” Karl Brauer, executive analyst at vehicle research site iSeeCars.com, said. “Dealers hate the idea that they know a consumer is about to spend tens of thousands of dollars on a vehicle and it might not be at their dealership.”
If price is not negotiable, buyers can try negotiating other things, such as accessories or additional auto protection. For buyers financing, that may be the easiest thing to negotiate.
“Interest rates is a big one because we all know how high they are right now. If you already have an interest rate set by your financial institution, make the dealer try to beat that. They usually will,” Brauer said. “They will want to do the financing because they make money off that too. When you can give them a monthly payment and an interest rate that you have already set up, they can try to beat that and they often will.”
One big mistake buyers make is not shopping around.
“Anything that adds to your ability to go somewhere else for the deal and not have to be reliant on one dealership. You should really never buy the first car you test drive or buy from the first dealership you visit. You should always have multiple dealers and tell yourself you are going to hit all of these dealers before you make a decision,” Brauer said.
Some buyers know exactly the vehicle they want — the model, the features, even the color — and price is not as important. Most serious car buyers are watching dealership inventories online. They may have set up alerts to let them know when the vehicle that checks off all the boxes shows up.
When it does, a buyer should keep that to themselves when they go to the dealership.
“For God sake, don’t fall in love with the car. Dealers can sense that,” Brauer said. “They can smell that when a consumer has just decided ‘this is it! This is the car I want!’ Once they sense that, they will absolutely not be giving you the best deal, because they will know you are already hooked.”
New vehicle incentives before any negotiations averaged 7.7% in October, according to Kelley Blue Book. Compared to a year ago, incentives have risen 60% as automakers compete for sales. The average new vehicle transaction price in October was $48,623, 1.7% higher than a year ago.
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