How to Negotiate Car Prices

The best way to negotiate a car's price is to obtain multiple offers from dealerships and use the lowest offer to either improve on the discount or match the sale price at a location closer to home. Dealer websites may only list the manufacturer's suggested retail price, or MSRP, which is why we recommend contacting the dealer directly to determine if there are any markups or unwanted dealer-added accessories. There's more to it than that, which is what we'll dive into here.

New and used car prices have been steadily trending downward as of late, further distancing themselves from the record highs during the COVID-19 pandemic. According to Edmunds data, the average discount off MSRP for a new car in June 2024 was $1,819. Compare that to the same month in 2022, when shoppers were paying an average of $683 above MSRP.

This trend means that there should be room for negotiation, but understand that the discount will vary based on the vehicle's popularity, the quantity the dealership has in stock, and the salesperson's willingness to negotiate.

Start by determining the market value
Get price quotes
Strategy A: The path of least resistance
Strategy B: Negotiating with offers
Strategy C: Classic negotiation
How to negotiate a used car price
Additional tips for how to negotiate car price
Negotiating FAQs

Start by determining the market value

You'll need to determine the market value of a vehicle before you begin to negotiate. This figure will serve as the backbone of your strategy and give you a reference point when you start getting price quotes from the dealership. Edmunds calls this the Edmunds Suggested Price, formerly True Market Value. The Edmunds Suggested Price is what we recommend you pay, not including taxes or fees. It is based on our analysis of millions of data points, including supply, demand, incentives, options and recent nearby transactions.

Start by looking up the car you like on the Edmunds. For new cars, there should be a "pricing" box near the top of the page. It shows the Edmunds Suggested Price and will vary it by the trim level selected. For used cars, that same box will instead show a price range of all the vehicles of that make and model in Edmunds' listings. This range can be widespread, which is why we recommend looking at a specific piece of inventory.

Edmunds features a price details section for both new and used inventory — meaning an actual vehicle listed for sale — which shows if the price qualifies as “great,” “good,” or “fair” — or instead is a high price, plus a figure indicating how much above or below market the vehicle is. This is your basis for determining if you're getting a good price or if you were quoted something on the higher end of the spectrum.

Keep in mind that Edmunds' suggested pricing is an average. Your goal is to get a price at or below it. But if it is a little higher, that's OK too.

Get price quotes

Next, we recommend calling, emailing or texting a few nearby dealers to get a range of prices. You can also submit your information on Edmunds or the dealer's website. If you're calling, ask for the internet sales manager and, in that discussion, verify that the vehicle is in stock and make sure it has all the options you want.

Once you have a few quotes in hand, you can proceed with the following strategies based on your level of comfort. For starters, Edmunds has a price checker tool for new vehicles, which allows you to enter the details on a quote you've obtained and get a rating to let you know if it is a fair, good or great deal.

Strategy A: The path of least resistance

Not everyone feels comfortable with negotiating. If this is you, but you still want to get a fair price, the strategy here is to simply take the lowest offer and move forward on it. Here, you're not really "negotiating," per se, but instead letting the dealerships do the work for you. There are occasions when a dealership has offered you its "best price" in the beginning, in which case there's no point wasting time and energy haggling for more.

Strategy B: Negotiating with offers

Let's say dealership X offered you a better price, but dealership Y is closer to home. An easy form of negotiation is to call dealer Y and ask if they can match or improve the price you were quoted from dealer X. Be prepared to show them the offer if they don't believe you.

If you're inclined to push further for an even better deal, you'll need to do some old-fashioned negotiating, so keep reading.

Strategy C: Classic negotiation

You'll need to approach the negotiations carefully, as the salespeople are trained professionals. That doesn't mean they're not willing to work with you, but it will be more effective to justify the discount with data rather than simply because you want a bigger discount.

When talking with a salesperson, a typical conversational opener from them might be, "What monthly payment would comfortably fit into your budget?"

It's important that you sidestep this question because it's hard to track the price of the car when the salesperson presents it as a monthly payment. Instead, tell the salesperson you will talk about financing later and that you just want to discuss the purchase price of the car for now. The salesperson will usually check with the manager and then come back with a price. You may not like that price, however, and this is where the negotiation begins.

Asking for a lower price: After the salesperson presents the initial offer, you could respond with: "I've done a lot of research on the market value of this vehicle and have a good idea of what it sells for because we've shopped around a bit. If you can beat this price (here's where you present your best price quote printout from another dealership), we will have a deal."

A response like this accomplishes a couple of things. First, it lets the salesperson know that you're an informed buyer. You are justifying the drop in price rather than asking for a discount without context. Second, the salesperson knows there are other offers to beat, so there is a good chance the salesperson is going to jump to the lower end of the dealership's pricing structure. This approach works for both new cars and used cars.

How to negotiate a used car price

If you are shopping for a used car, where apples-to-apples comparisons aren't always possible, your goal is to make an offer that is as low as possible but still in the ballpark. If you found the vehicle on Edmunds' inventory pages, refer to the price section to see the range of what might be a fair, good or even great deal.

If you found the vehicle elsewhere, head to our appraisal tool and be ready to answer a number of questions about its trim, options and condition level. Then, click on the Edmunds Appraisal Report to get a rough idea of what the dealership might have paid for the vehicle. Compare the "trade-in" price to its estimated "dealer retail" value on Edmunds. Your goal is to land in between those numbers. You can also look for comparable used vehicles near you to see what others are listing them for. It's important to note that the miles and options are similar — otherwise, you won't be making an even comparison. Once you've done all this research, you'll have a better idea of what a fair price would be.

If you're the first to make the offer, give yourself room for the dealership to make a counteroffer. In other words, if a vehicle is on sale for $30,000 and your research shows it as a "fair deal," make an offer near the top of the "great deal" spectrum, which, for the sake of argument, would be about $27,500. Make an offer of about $27,000. You should know ahead of time what your opening offer will be, how you will counter the dealer's offer, and what your highest price will be. Then, when you're in the heat of the moment, you won't get flustered. You will negotiate like a pro. The salesperson might counter at a price of $28,500, which is more than what you asked for but still less than the original asking price.

Don't be intimidated

Many car buyers seem reluctant to make a low offer. They often say they are afraid the car salesperson will laugh at them, become angry, or act insulted. And yet, if you think about it, the salesperson is really doing the same thing with you, starting with a higher offer and working down. Knowing that you've done some research should give you a bit more confidence in recognizing a good price and knowing when to counter.

Additional tips for how to negotiate car price

Here are a few more tactics to help you get a good deal on your next car:

• Don't buy a car in a hurry (unless you have no choice). And don't go into the car dealership unprepared. The salesperson may draw you into offer-counteroffer negotiations before you are ready.

• Check all the numbers and ask for the out-the-door price.

• Read online reviews of the dealership before you begin negotiating. Start with a dealership that has good customer reviews.

• Plan to spend a chunk of time at the dealership. Between the test drive, a possible trade-in, the negotiating, and the financing process, you might be there for four hours or more. Eat before you go: You want to be able to think clearly. You can speed things up by being prepared for all the car-buying paperwork. Shopping midweek rather than on the weekend will also cut down on the time you spend at the dealership.

• Other items are negotiable. While it is easy to focus on negotiating the MSRP (also called sticker price), don't forget you can also negotiate your interest rate, trade-in, and other products available for sale, such as undercoating or an extended warranty. 

• Get preapproved from a bank or credit union before visiting the car dealership so that you can compare interest rates.

• Don't enter negotiations with a car salesperson who intimidates you. Negotiating should be a relatively comfortable win-win process. If you get uneasy, ask for the sales manager and request a different salesperson. You can also "test-drive"  your salesperson before you even get to the dealership.

• Always remember you can walk away if you don't reach a deal you like.

• Dealer add-ons can sometimes be negotiated. These are items that were not originally included with the vehicle but that the dealership installed before putting it up for sale. You're not obligated to buy them but understand that the dealership may not always be willing to remove them from the asking price.

• Don't forget about incentives and rebates. Be sure to ask about any new vehicle rebates that may be available. Even if the car has a cash incentive, you can still negotiate for a better price.

Negotiating FAQs

Q: How to negotiate a car price when paying cash?
A: Paying with cash doesn't automatically mean the dealer will give you a killer deal. If anything, the dealer would prefer you finance the car so it could make a little profit from securing the loan. That said, it does simplify the process. You can ask for the "out-the-door price" instead of getting caught up in discussions of monthly payments and interest rates.

Q: What does a "no-haggle price" mean?
A: A "no-haggle" price is another term for a fixed price. It means you cannot negotiate for any discounts. You'll find this style of pricing at CarMax or a number of dealerships that might have their own name for it like "Sonic Price" or "Best Price." If you don't like the back-and-forth of a typical car negotiation, this style of pricing might work best for you.

Q: Can you negotiate a Tesla price?
A: No. Tesla does not offer any discounts on its vehicles. Everyone pays MSRP.

Q: How do I get the best deal on a new car?
A: Research the vehicle's market value, get several offers from dealers, and go with the place that treats you well and offers a competitive price. That said, price isn't the only factor that determines a good deal. Read "What Are the Elements of a Good New Car Deal?" for more.