4 Tips on Negotiating a Car Price

negotiating a car priceI’m a big fan of negotiation. It’s all strategy and there’s always tricks you could do. Mark Cuban used the “24 second” shot clock trick on Shark Tank. Another trick is to use silence. Silence is the killer that can make the other side very uncomfortable. I’m not an expert on negotiation by any means, but I have recently gone through negotiating a car price and will detail what I found out. To this day, I still don’t know if I won but I think I got a great deal out of it. Buying a car for the first time is something that the majority of people go through, which is why I will share my experience to learn what to do and what not to do.

It’s one of the very few times that I’ve negotiated for something. A car is a depreciating asset that costs a good chunk of change to purchase. I didn’t know what to expect and I didn’t know what to do. I’ve negotiated to save $75 on my phone bill before, but never for something of this magnitude. There were a lot of mistakes made and a lot of lessons learned while going through this process.

Know the Car You Want

A car has many characteristics. Some are slick, some are expensive, and some are economical. Defining what you are looking for helps. I was overwhelmed by the wealth of choices out there and didn’t know where to look, especially because I knew nothing about cars. Negotiating a car price is never easy under these conditions.

Some of the things that I did want was a car that was fuel efficient and had a great price. I looked up dealers around my area (it was in Austin, Texas this past May) and didn’t even know which ones were reputable. I went online to look for reviews. Since it’s a salesman driven business model, I expected bad reviews across the board. Surprisingly, I found one with a 4.1 star review from Google Reviews.

Next, I had to find a car that I wanted. Since I didn’t know what car I wanted, I filtered the choices down following these criteria 1) can’t cost more than $10,000 2) has to be an automatic. That narrowed the choices down to about 5 cars. Great. I had a list and I went down to the dealer after a day to make the purchase.

Choose the Car You Want

I ended up really liking the 2015 Nissan Versa Note SV Hatchback. It had 39,134 miles on it (the previous owner must have done a lot of driving in a year) and the price was $9,700. A quick google search shows that it has an MSRP of $16,330.

This price is probably inflated though because the website probably used the statistic that a car will be driven an average of 12,000 miles a year. The car I was looking at had more than 3x the average. But with this in mind and after test driving it and having the dealer walk us through the car specs, it was time to go to the negotiation table.

It was a tough process. I didn’t know how I should have responded to the majority of the time. He used speed of talking very well to his advantage. He talked fast so I would have a harder time comprehending and thinking of the best response. It gave me a clue that he really wanted to sell the car. 

Negotiating a Car Price

When I told them that was the car I wanted, they muttered “I don’t know if we can do more than a couple hundred dollars off the price.” Then I asked something not very smart. I asked “then could you take off a couple hundred dollars?” Big mistake. I needed to start lower, I shot myself in the foot by asking this because then they asked “so if we do $9,500 right now, do we have a deal?”

Well, now I look bad. They gave me exactly what I wanted, how can I say no?! Even though I realized I made a mistake, I asked for a couple more hundred dollars off to $9,300. I wasn’t prideful enough to care about how I looked by asking. However, they wouldn’t budge. Then they went on to explain that they are going to send the car off to the auction anyways for$9,500 so it was either selling it to me or selling it to the auction dealer.

It doesn’t make sense that they would be able to sell it to an auction dealer for the same price as a consumer but I don’t mention that. Instead I still ask for just a little more to sweeten the deal. They wouldn’t budge and in the end, I took the $9,500 offered price. After taxes and additional fees, it came out to be $10,400.

What I Learned During the Process

1. The Amount of Time in Inventory Matters

The car that I was looking at had the lowest price in all of Texas based on mileage and model. I had the sense to check AFTER making the purchase (when I should have checked before). The car was priced so low because it was on inventory for a long time. 128 days, in fact. Any days above 90 days in inventory spells trouble for the dealer.

Knowing this gives you more leverage when negotiating a car price. A simple question of “how long was this car in inventory” gives you clues how badly they want to sell it. If they avoid the question and doesn’t answer in a straightforward manner, it’s been in inventory for a long time.

2. Look for Value Beyond a Lower Price

Since I knew nothing about cars, I couldn’t exercise this lesson. But now, I know  what to negotiate for. For example, I had to buy a battery for my car 2 months after buying it because it was almost eroded and it wouldn’t start without jumping it. There was also a coolant cap missing. If I had been familiar with looking under the hood of a car, I could have easily spotted a coolant cap that was missing and would have asked about how old the battery was. 

I could have requested for the battery to be replaced and to place a coolant cap where it was needed. If I had gotten it, I would have saved the $167 I spent for both items. Instead of looking to get a lower price than $9,500, I should have asked for additional non-cash items. Some non-cash things to ask for are: 1) a spare key (most dealers should offer this) 2) full tank of gas 3) new tires 4) new battery 5) car washed 6) free servicing. 

3. Find Out How Much They Paid For the Car

This one’s tricky. It’s not information that they are happy to disclose. It doesn’t hurt to ask, though. A simple “how much did you pay for the car?” can give you clues by reading their facial expression. I was surprised though that this specific dealer showed me through their software how much they paid for the car. They were losing about $1000 by selling the car at this price. I don’t completely believe that, because I don’t think they would consistently sell cars that makes them lose money, but if it was true, I got a fantastic deal. 

4. Find Points of Leverage

When it came to negotiation, I thought that it was just a haggling of prices. However, I am wrong. Especially when it comes to negotiating a car price. There’s no compelling  reason that the seller would concede if the buyer doesn’t communicate their points of leverage. There’s always leverage points, you just have to find them.

For example, I could have offered to leave a great review on Google Review, Yelp, or any other review websites if they lowered the price even further. Also, there was a high number of competitors around the area. Therefore, I should have done research on the cars that their competitors had to see if I could have gotten a better deal. 

A simple “thank you for the offers, let me browse other dealers to make sure that I’m getting the best deal” could have gotten me a slightly better price. 


In summation, I got lucky. The car was in inventory for 128 days resulting in a record low price, the dealer didn’t ask if I was financing the car or paying for it with cash (dealers hate customers who pay straight cash), and the day that I went, it was slow so they were eager to make a sale. On top of getting a great deal, I learned a lot of things while negotiating a car price. 

However, that’s not to say there weren’t mistakes. Consider me as the guinea pig that went through the process so you don’t have to make the same mistakes I made!

Readers, have you gone through negotiating a car price? Are there additional things that I should mention? Let me know in the comments below!

Finance Solver

I grew my net worth to $40,000 as a college student through hard work, discipline, and a little bit of luck. I graduated college in 2016 and will be starting to plan for my retirement once I start working.I am planning on reaching financial independence by my early 30's and I will document my moments of inspiration all the way to desperation here.

My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!

Read more about me here.

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16 thoughts on “4 Tips on Negotiating a Car Price

  1. This may sound odd but I don’t think there is a ton of value in negotiating a car price. It’s definitely worth trying, but I feel like with all the data out there these days it’s becoming tougher to shift a seller on their price, and the seller knows that if they price higher than the market they are unlikely to get a sale.

    • Finance Solver says:

      Huh, I never thought of it that way. I’ve always followed the idea that you should always try to negotiate, no matter what the outcome is and didn’t really take into account the other side of the debate. Great perspective!

  2. We got our 2007 Mazda 3 which was initially selling at the dealer for about $15k, to $11,700. We did a lot of searching, we bought at the right time of year, we bought with cash, we were very happy. This car is going to last us a very, very long time.


    • Finance Solver says:

      Wow!! That’s a significant amount of savings (actually, the best savings I’ve heard when taking into account my friends who’ve tried their hand at negotiating for a car). I’m guessing you played your leverage points very well to convince the dealer to discount so much 🙂

  3. Hi FS,

    I have a Nissan Versa 4 door Sedan. It is a good car, I think you got a good deal based on what you paid for it. There is always opportunity to learn from your mistakes. I have had it for two years. It is a good car, good choice!

    We have bought a few cars both old and new over the past ~16 years. One thing I always do when buying a used car is this – I tell the dealer – I know the list price says $X. What is the best price you will give it to me for?

    Never make the first offer. Once the dealer comes with his number, you offer something much lower and then you will find a happy medium or middle ground.

    You exercise control over the negotiation as long as you make it clear to the dealer that you are ready to leave if things don’t go your way. Be ready to walk out. That will change their demeanor.

    The second thing I do is I don’t talk to the middle man who talks to you and then goes to manager in the back who makes all the decisions.

    I will plainly state that if you want to try to reach a deal with me, I want to talk straight to the manager face to face.

    This way I am negotiating with the man who has the power to make price cuts. He has to look me in the face, the guy who is going to write the check.


    • Finance Solver says:

      Hey Michael, thank you for stopping by and leaving a very thoughtful comment! We have almost the exact same car then. Glad you like it! I think it’s a very durable car and so far I have no complaints about it. The mileage efficiency I get can’t be beat, I just spent $17 on gas for driving it the past 5 weeks. Amazing!

      That’s a great trick, I haven’t ever considered using that. I knew that it’s bad to make the first offer and I let it slip. I’m going to be a lot more mindful of this going forward and the next time I negotiate. I also didn’t use the getting ready to walk out trick on them, which I regret also. Lessons learned.

      Fantastic tips, Michael, thanks for stopping by!

    • Finance Solver says:

      Congrats! I wish I had asked for $1,000 off the list price.. I always get afraid that I feel I’m overplaying my hand but then I forget they’re overplaying theirs so I shouldn’t be so afraid.

  4. When buying a used car it’s always a good idea to check Carfax. That will tell you the history of the car. Many dealers nowadays provide carfax report for free. Things like if the car was rental or had accidents or how often was it serviced, all show up in the report.

    In any case, seems you got a descent deal on a good car, so congrats!

    • Finance Solver says:

      Luckily, the car dealer I went to had a Carfax report so I got to see if there were any past crashes / what maintenance has already been done to it, etc. Information is getting cheaper by the day and it’s great that it has.

      Thank you for both stopping by and providing your thoughts!

  5. I have never bought a car as I live in the city but I know that one of the best times to purchase a car is right before a new model comes out as they want to clear out inventory. There are many ways to research what cars are going for these days that everybody should be able to negotiate a good deal but sadly many just wonder into the dealership and fall into their selling skills.

    • Finance Solver says:

      Great point! I haven’t ever considered that. Do you think you’ll ever purchase a car? Yes, the internet should have made buyers a lot smarter, and I think it has. But that still doesn’t mean that there aren’t people who don’t take advantage of the vast resources that are out there!

  6. I have bought a bunch of cars used off of craigslist over the years. Dealing with private parties vs. the dealership has saved me on average about $1,000. I am by no means a car guy but when I found a car that I liked I would take it to a mechanic before buying it to ensure that there weren’t any problems. It normally cost about $200 but was well worth the cost if there were any major defects that I wasn’t aware of.

    • Finance Solver says:

      Whoa, I would never be able to go through the Craigslist process because it’s hard to trust them. My friend bought his mustang through Craigslist for really cheap price of 3k, but I just know that if I go through with the process and with my luck, I won’t get a functioning car.

      • Me too. I am too afraid of buying or selling anything through Craiglist after hearing scary stories about people getting mugged or even worse. Though looks like facebook is going to beat craiglist on strange stuff for sale.

        I have used ebay to buy old Commodore computers and few other old tech stuff without any issues. Ebay maybe a good place to buy or sell a used car.

  7. With more practice you’ll be saving thousands! 🙂 This is a great start. The point near the end of saying “let me browse other dealers to make sure that I’m getting the best deal” is possibly the most powerful tactic – don’t miss out on that one next time.

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