Money Essentials

More vehicle negotiating options

The telephone or car-buying services can be a boon when buying a car, if you know a good deal when you see one.

For new car buyers, the real wonder of the Web is how easily you can get reliable price information that will give you a much stronger negotiating stance. But the Web is also powerful if convenience and low hassle matter a lot to you.

If you plan to buy from a dealer, know your target price before you start shopping. Popular Web sites like, and AOL Autos can tell you the manufacturer's suggested retail price, or MSRP, the dealer's invoice price and an estimate of what others in your area are paying for the car.

Focus any negotiation on that dealer cost. For an average car, 2% above the Dealer's Invoice Price (that would be $400 on a $20,000 car) is a reasonably good deal. Once you're done your research and figured out exactly what car you want -- down to the options and a few color choices -- use the telephone or e-mail to start negotiating. Many dealerships today have inventory listings on line so you can see exactly the car you're negotiating for.

Call several dealers in your area and ask for the "Internet sales manager" or fleet manager. It may take several rounds of calls to get the best price. Before you agree to go in and seal the deal, ask the dealership to fax you all the paperwork with the agreement in writing. That way you can be sure you're not getting drawn into a bait-and-switch routine.

Do not rely on connections to get a good deal. Unless you have an official relationship with the carmaker entitling you to an employee or supplier discount, don't think that knowing someone at the dealership or car company is going to get you the best price. The dealer's incentive to offer the lowest price comes from competition with other dealers, not from the desire to do someone a favor. Your relationship might get you a good deal, but not the best deal.

Join the club

Internet services like and buying clubs like those operated by Costco and Sam's Club offer a simple, no-hassle way to get a good price. These services pre-negotiate discounts with local dealers. In theory, the dealer should offer club members good prices in exchange for the business these services bring in. You may still be able to get a better deal negotiating on your own, but you might consider the hassle-free experience worth the risk that you're not getting the best possible deal. Top of page

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Updated 11/23/2011 with SEO tweaks - abell
Updated 7/25/2012 content - aross