How to Negotiate a Better Deal on Your New Car

Many people approach the purchase of a new car nervously. Fortunately, a little knowledge can go a long way toward making you a smart shopper. If you’re in the market for a new car, the following tips can help you negotiate the best price on the car you want.

Step 1 – Start by determining the vehicle’s factory invoice price—the price the dealer actually paid for the car. Luckily, you can get this information from several reputable Internet sources. You can also find the Kelley Blue Book value at

Step 2 – Find out if any rebates or factory-to-dealer incentives are being offered on the vehicle of your choice. Rebates can be applied directly to your purchase price so that you’ll pay less sales tax.

Factory-to-dealer incentives are cash rebates the manufacturer gives to the dealer when a car is sold. If you know about these incentives, you may be able to use them to negotiate a better price. For example, if the manufacturer will pay the dealer $500 for selling the car, you can use this information to negotiate a smaller profit margin on your end of the deal.

Step 3 – Use manufacturers’ web sites or information from the dealership to determine how much you will be charged for dealer-installed options. Add the cost of these to the factory invoice price, subtract any rebates, and you’ll have a pretty good idea of what you should be paying for the vehicle.

Start at the bottom. Once you know what the car should cost you, start with this figure and negotiate up, rather than starting from the sticker price and working down.

Step 4 – Have your financing in place. Although some dealerships advertise zero-percent financing, it may not be available for the car or options you want, and you may not be able to qualify if you have anything less than pristine credit. Instead, you can get pre-approved for a SchoolsFirst FCU Auto Loan online in just minutes. You’ll know how much car you can afford before you start shopping, which lets you focus on negotiating a fair price for your dream car—without worrying about negotiating a fair loan.

When you click on external links, you are linking to an alternate website not operated by SchoolsFirst FCU, and SchoolsFirst FCU is not responsible for the content of the alternate website. The fact that there is a link from SchoolsFirst FCU’s email to an alternate website does not constitute endorsement of any product, service, or organization. SchoolsFirst FCU does not represent either you or the website operator if you enter into a transaction. Privacy and security policies may differ from those practiced by SchoolsFirst FCU, and you should review the alternate website’s policies.

Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

 If you post a comment, we will make every effort to respond or contact you directly. We reserve the right to delete comments that contain personal information, unauthorized content, or are generally inappropriate.