How to negotiate with car dealer?

Question

we are going to buy our first new car. we are keen on Honda Accord EX-L V6, fully loaded.

i hear you can negotiate with the dealer. how do you negotiate? what words, body language do you use, does how you dress matter, etc? any tips will be appreciated. we want to get the best value for money and not get misled or cheated.

Answer 1

Don't plan on getting an accord for less than invoice.  the guy who said that is out of his mind.  Offer that and you are likely to get yourself thrown out of the dealer for saying something so stupid.  Accords typically sell for only about a grand off MSRP.  If you get 1500 off, you did great.  They are awesome cars and have been well received by not only the public, but testers alike.  It's a powerful car that gets almost 30 mpg, and it's worth every dollar the sticker says.

Don't call or email dealers, you are setting yourself up for the classic low-ball which will ruin your new car buying experience.  Go to you local dealer first and tell them you are going to shop them.  Then go to another dealer, do not tell them you've been anywhere, and ask for their best number.  Whoever treats you better should get the deal, the price will probably be similar.  

You can save by going to a bunch of dealers,   and you'll probably end up with that deal far from home.  But you can't put a price on buying from your local dealer, if you have a problem, they will NOT help you because you bought elsewhere for a couple hundred bucks.  Just keep that in mind.

Answer 2

As an Internet Manager at one of the top 10 Honda dealers in the country I can easily answer this question. I'm going to go in-depth and cover finance as well (where most people fail in negotiations) so I hope this helps.

The Honda Accord EX-L V6, while popular, is still a simple mass market low profit vehicle. What I mean by this is it is very easy to purchase this car in any major city for invoice (the price the dealer pays for the car) plus fees - Tax, Title License, and Doc Fee (doc fee's usually range 299-399$). There are no dealer incentives (rebates or "dealer cash") on Honda Accords at this time, and I have -never- seen a rebate on an Accord in over 6 years with Honda.

So what I'm saying here is save yourself the stress. You don't need to dress a certain way or beat anyone up. Send a few FRIENDLY e-mails to Internet Departments at different Honda dealers in your city and ask them to sell you an Accord at invoice. See if they have one in the color/equipment you desire. If your in a smaller town where this isn't possible, send e-mails shopping in the nearest BIG city. You will save potentially thousands by driving a few hundred miles. When you finally do get to the dealership, again, be friendly and thank them for helping you. Car salespeople make the absolute minimum $'s they can make when they sell a vehicle at Invoice, thus, being rude or condescending can lead to a very bad experience at the dealership. If you send off several e-mails I promise you WILL run into some greedy salespeople who will flat refuse to sell the vehicle at invoice. Don't bother with these guys, just find one who's interested in your easy to earn business at invoice, and enjoy your new Honda.

If you are hoping to purchase the Accord significantly -below- invoice, bear in mind that this is impossible without the dealership physically losing money. While a price 100-200$ below invoice on a Honda Accord is often possible in a COMPETETIVE market, you have to realize that Accords are not distressed merchandise and as such the dealer has no incentive to sell the vehicle at a physical loss. If we were talking about remaining 2008 Pilots, or Ridgelines (SUV/Trucks that have cash from Honda direct to help reduce the price below invoice) it would be a different story. On the complete flipside of this, there are vehicles right now which are in such high demand you will not find them anywhere near invoice. For example don't expect to be quoted invoice pricing on a Hybrid Civic (a car they are making far too few of, and is usually selling before it can even get to the dealership).

The last thing I want to bring up is what happens AFTER the negotiations on the car, and where you need to be very careful. That place is Finance. After you've agreed on your invoice deal you will have to go through the finance department to finalize the deal and sign all relevant documents (purchase contracts etc). During this time they will offer you many various "products" in a completely sepperate sales pitch, in an attempt to make additional money for the dealership. Many of these products are very importaint and you should absolutely consider them, namely Gap Insurance, and Extended Warranty's. However, I want you to understand that prices on these products are usually negotiable, and you can absolutely refuse them if you are not interested. Gap insurance is what protects you from owing a "gap" if your car is totaled in an accident or stolen. For example, your 26,000$ Honda is stolen 2 days after you purchased it. Insurance is only going to pay 23,000$ (what they say it is worth at this point as a used car), leaving you owing 3000$ on a car you no longer have. Gap insurance would pay this "gap" off, leaving you free and clear. This is a very useful thing to have if you are financing a large portion of your car, and you should be able to purchase it somewhere between 399-799$ depending on the dealership (remember to negotiate for a good deal on gap). Extended Warranties extend Honda's normal warranty (3 year 36,000 mile bumper to bumper, 5 year 60,000 mile powertrain). These can take your warranties all the way up to 100,000 miles and are often a good deal even on a Honda (famous for their reliability). That said, bear in mind that this is also negotiable (with warranties ranging from 1000-3000$). If you decide you want one, I highly suggest you negotiate strongest here, offer 50% of whatever they are saying the price is, allow for budging up in price 300-500$ from there. Stay friendly through this and you should have an easy experience.

I wish you luck and a pleasant experience shopping for a Honda.

Answer 3

I agree with jay here.

No way in heck are you gonna be able to negotiate an Accord 1-2 k below invoice.  I was shopping around for the 08 Accord EX-L 6 months ago and the best price I got was $500 over invoice, and they would not back down.  I ended up with an Acura though.

Never negotiate over the phone because they will lie to you!  You can try to do it over email but in person is probably the best and make sure you get their offers in writing!

Answer 4

I agree you not going to get one at a big discount being high in demand. Look at edmunds and shoot for invoice on this one.

Other thing to think about. Guy that brought up warrantys being a rip off.....depends on how you look at it. Warranty I have anything goes wrong it goes to the dealer and I pay a 100 deductible and car is fixed. I have seen customers come in with cut rate warranty they have bought online. Warranty company is hard to work with, we charge you for the work ( full price) and let you fight with your discount rate warranty company for reimbursement. Kind of dumb to tie our time up with trying to beat warranty dollars from companies we have had problems with in the past when you chose to use them.

Just some food for thought ;)

Good Luck!

Answer 5

Go to different web sites like autotrader.com & cars.com to get a price range on the auto you're looking for.

Consumer reports will, for a fee, give you a price list of the actual dealer cost for the car & accessories.

Be flexible in what car & options you want. List out your "must haves" like AC/Auto/30+MPG & find several cars that fit the category.

Then you can set up a showing through the web or show up at your decided dealership with the pricing you found. GO ALONE - do not have both of you show up. Dress isn't important as they're going to run a credit check anyways to figure out what you can pay. The reason you go alone is so they can't play one against the other (I've had this done before - not pleasant, especially if you have to be the bad guy & say no). Take the car on a test drive & pick the other up from either home or a near location & then talk it out between you.

NEVER let them pressure you into an instant sale - cars are like potato chips - they'll make more. Come back in a day or two if you're having doubts or want to keep looking.

Be sure to mention the other cars you have looked at while talking about possibly buying & the different sites with autos you saw - keeps them honest in price if they want to make the sale.

Lastly, DO NOT GO FOR ADD ONS! like extended warranty & a bunch of gizmos. These add to the cost dearly & are high mark-ups for the dealer. Stick to your "must haves". Hondas are very reliable & an extended warranty is just a waste.

A friend has one like you're looking at & it's a very fine car. Good luck.

Answer 6

What I've always done was to tell the salesman after he is all through with his pitch, that I am just shopping different Honda dealers and taking the best price I'm offered. That's a good start. Good luck. You should do well in today's market.

Answer 7

The best thing to be when shopping for a car is educated on what you are looking at.  Do your research online about the model, options, etc.  Salesmen are supposed to be there to inform you, but most just want to sell you a car as quick as possible.  There is so much info on the net now, you can find out invoice prices, mark up, and what the make on the car.  If you are buying new, I would wait about one more month until the new model years come out.  Dealers and manufactures want the 08's out and will make you a nice deal as long as you do not mind a "left over".  Honda's are at a premium in the market, but since you want the less fuel efficient model, you could use that as a bargaining chip.

Answer 8

Congratulations on your decision, good choice on a car too, but here are some tips for you to negotiate a good deal.

Make sure you have all day to work everything out, sometimes its best to drag out the process, remember they want to close the sale as quick as possible, if you drag it out they may be more willing to cut deals.  

NEVER SAY THIS IS THE CAR YOU WANT!  If they know you want it then they will rip you off.  Its a lot more productive for them to think that you are not sure what kind of car you are looking for.  Test drive a few cars to confuse them, maybe even go across the street to the other dealer, walk over there and leave your car in the first lot so the first dealer sees you leave, they may be more willing to make a deal.  

Also don't tell them what types of payments you are "willing" to make because they can totally rip you off like that.  If you offer a payment of like 350 a month they can stretch it out however they want to make huge money off you.

Your best bet is to go in there, drag your feet and make it like you are not sure you want the car.  Maybe even leave the negotiation table and say you "just don't know."  Come back the next day and I bet you'll get a better deal.  The biggest thing is to not be eager.

Answer 9

Do not go to the dealer until you have the price negotiated over the phone. Once you are there, you have much less power. If you just call several dealers and ask for their best price, and make clear to them you are ready to buy the car right now, you should be able to find one that will give you the car for below invoice price (about 1-2k below invoice is the best you can do). If the dealer knows that you are buying today, and that you are calling to get the best price right now, you will get the best price. If they think you are shopping, you'll get a song and dance. As you call each dealer they will try to get you to buy the car from them right now without calling the others first.