By on March 22, 2021

Buying a new car usually requires visiting a dealership.  That puts you at a disadvantage: You’re on foreign soil, and they know you don’t know your way around.

Having grown up around a dealership, working as a salesman, and later for manufacturers, I have a good idea what the dialogue will be before I step foot on their turf. Fourteen million new vehicles are sold in the U.S. annually, or about 38,356 cars a day. Looking at the board on or near the sales floor, you can get a pretty good idea of how many units the dealership you’re visiting sold. If they’re a high-volume store, they may be more willing to deal. Understanding how dealerships work begins by knowing what not to say, and the art of the deal.

Here are some tips.

Let’s start with what not to say.

Sure, I’ll pay your price. There’s a myth that if they put the price on the windshield or online, that’s it. They call this tactic no haggling or price transparency, but that’s only if you’re foolish enough to pay their asking price. Instead, make an offer you’re willing to pay. The best way is to show you’re serious is to go to the dealership. Money talks, although my aim is for them to get less of it.

While CarsDirect or TrueCar may be convenient, this doesn’t mean they’re cheaper. You’re dealing with an online sales consultant who’s all about the buyer experience. This is not what you want, which is to get the vehicle for less than the going rate. This runs counter to what they’re taught. They have no other tangible items they can offer to offset a price differential. At a dealership, there’s a parts department where they can go to get a set of floor mats or trade out the wheels. Online, what you see is what you get.

I’ve done my homework, and there are six exact vehicles in a 100-mile radius. Why tell them upfront that you know their ability to hold their price is greatly diminished? The same with comparable vehicles from competitive makes. Leave this for later, when you’re getting down to the nitty-gritty. It is a little more difficult if you’re looking for a model that’s hard to find, such as a Toyota Tacoma 4WD with a manual transmission in anywhere but a rural area. Toyota doesn’t believe if you reside in a city that you want to shift for yourself.


What to say:

My bank has a lower rate than what you’re offering.  If you’re going to finance the vehicle, you want to have options. Check to see if your bank or credit union is offering low rates on auto loans, so you have your own financing as a backup. This puts you in a better position to wrangle the terms. The dealer’s finance manager has a plethora of banks they use. What you want is for them to have to beat the rate you have, or you can do the deal through your own bank.

I’ll walk if I don’t get the deal I want. Forget how much you like the car, cross through their deal sheet, and write the number you want to pay. This is easy if you want something less desirable, with plenty of units on the lot, and you’re not stuck on a certain color or trim. That gives you the most flexibility, and it will drive the salesperson and their manager crazy. Include all the other fees, title, and taxes in your offer. It’s called the ‘out-the-door’ price, and if they agree, they can’t come back and tack on some superfluous charge. Watch the finance manager carefully, as they’re known for getting you to buy pin striping, detailing, an extended service contract, or paint protection if you’re not paying attention.

Car buying can be easy if you take the time needed to work out a deal you can live with.

[Images: NADA]

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46 Comments on “What Not to Say When Buying a New Car...”

  • avatar

    When I decided to buy a BMW 335i coupe, in 2007, I drove out to the BMW dealer in my 10 year old Lincoln Mark VIII. The salespeople didn’t even want to talk to me, much less sell me a car.

    I went to another BMW dealer, a little farther away. They not only were glad to see me, they even loaned me a 335i coupe for a weekend. I ordered one for European delivery. However, when it came to price, there was no bargaining room. The coupes were in hoot demand, and short supply. So I wrote a check for the car. It was a happy buying experience, and a happy ownership experience.

    • 0 avatar

      I’ll never forget the time I was at a Saab dealer, browsing their lot on a sweltering day, looking at a vehicle I was the target market for, and subsequently bought at another dealer. Wearing a tie even. Any decent sales staff would have been inviting me in to chat over a cool glass of water. After 20 minutes of pacing around and trying to look conspicuous, I left.

      • 0 avatar

        Huh, I thought most people hate when the salesman comes up to them while they’re browsing. I always count it as a plus if I can browse in peace. If I need a salesman I will ask for one.

        It’s weird that you thought not being bothered was poor customer service. YMMV

    • 0 avatar

      I’m interested in knowing how dealers in general view negotiating on special orders and how willing they are to deal on price.

    • 0 avatar

      But you did get the ED price, yes? Discount should have been around $3k or thereabouts.

      I too bought a new BMW in 2007. Went to the nearby dealer in my VW Scirocco, in shorts & t-shirt. Walked into the showroom and practically drooled all over a Z4M Coupe. Couldn’t get anyone to bother to acknowledge my presence, no matter how much I pawed at the car. Clearly they were unimpressed with my arrival vehicle and appearance. Screw that, went up the road to the other dealer in town and bought from them.

    • 0 avatar

      We live in south Florida and had to go up to Milwaukee for family emergency. We thought we’d be there for 2 weeks at most but when we realized that we would be much longer we decided to buy a car for my wife. We were about to buy one in Florida when we got the call anyway. Called the BMW dealer that had a black on black 535i with the sport, luxury and winter package – exactly what my wife was looking for. We show up in a ratty rental Mercury Grand Marquis and the salesman was more than happy to hand over the keys and told us to enjoy it. Gave us a half hour to drive it wherever we wanted. Fantastic experience. Drove back to FL a month later in it.

    • 0 avatar

      This interesting because I too picked up a BMW 335Xi coupe in 2007, and was able to get exactly what I wanted no issues whatsoever. This was the start of the financial crisis (yes, it started before September 2008) so demand was already waning. That first BMW dealer obviously sucked.

  • avatar

    “This is easy if you want something less desirable, with plenty of units on the lot, and you’re not stuck on a certain color or trim.”

    Yea, that’s not me at all. I’m pretty much resigned that my next car is going to be a special order or a lot unicorn, which will cause me to spend a higher price.
    If you’re wanting a gray RAV4 LE then you obviously have more leverage.

  • avatar

    Good advice, it surprises me that people don’t shop for financing before shopping for a car. Their first financing offer is often over market rates by a good margin, and they are getting a kick back for that margin. So yes it is good to say my bank will give me X and if you can beat it meaningfully I’ll finance with you.

    Out the door price is also the best way to negotiate. I tell them straight up I don’t care how you slice it up amongst yourselves with the various fees, I’ll pay X out the door.

    Walking out is also very effective and can be the quickest way to a deal. The last car I bought at a dealer was for my wife. I said I’ll give you X out the door and they came back with a total that was only about $200 off of the posted price plus a bunch of junk fees. So I got up and left. By the time I got to my car another guy was there I told him the quote was insultingly over market price and it took just a few minutes before he came back with a price that was $200 over what I originally offered. I did take the deal because it was the exact car my wife wanted and the first one I had found that fit the bill exactly.

    • 0 avatar

      Especially true since that rate is going to effect your payments directly. Your basically given the dealership extra monthly money for no reason. Of course if you have bad credit you may be stuck. I have excellent credit and thus banks are very happy to give me a nice low rate. The dealership sees I qualify for good terms and the upsell / attempted rip-off process begins. I always make sure I have an idea of what rate I should get, if the dealership is out of line I tell no thanks I’ll use my bank. I pay off my loans early so in the end the rate doesn’t make a huge difference but still overpaying makes no sense.

  • avatar
    Add Lightness

    Get several prices on the exact same car and go to the dealership you really want to buy at LAST. By then you know the price to beat.
    With a file folder under arm, ask them if they want to sell the car you want for that price out the door. With little marketing on their side they can make a deal in 15 minutes, otherwise keep shopping.
    Never let them know you flew in and rented a car.

    • 0 avatar
      SCE to AUX

      “Never let them know you flew in and rented a car.”

      I know what you mean by that, but on the other hand I have purchased several cars out-of-town (2 – 5 hours’ drive). My line is that “I’m only here today” – which is true – but it tells them they shouldn’t wait to offer me their best deal tomorrow.

  • avatar

    “What Not to Say When Buying a New Car”

    “I’m rich and I can’t live without this car”

  • avatar
    SCE to AUX

    I never negotiate the new car and the trade separately. I don’t care what they make or lose on either vehicle, because for me it’s just one transaction. So you have to go in knowing the value of your trade-in and its potential resale value, plus a reasonable purchase price for the new car.

    My brother briefly sold cars at a Volvo-Subaru dealership. He was shocked by how many people simply paid MSRP – often first-generation immigrants, notably.

    • 0 avatar

      You don’t understand. In Russia it used to be
      — look, you have same car. how much you paid?
      — 30,000
      — you-dummy, I paid 35,000

      These immigrants probably did not know that dealer would take over MSRP if they give.

    • 0 avatar

      My parents paid ~5,500 (inflation adjusted) over what they should have paid for the ’57 Chevy 210 wagon in October of that year (I have the 63-plus year old loan document listing the sale price right here). I think they probably didn’t realize they were supposed to bargain. This was odd, because they said they’d waited until the fall to get the cheaper price, and had they bought in the spring, we could have driven Seattle to Menlo Park, and then Menlo Park to Cambridge MA in a new car instead of a Studebaker with 90K on the clock.

      It was their first new car, for which they paid about twice as much as they’d paid for the then 2 year old used Studebaker about five and a half years earlier.

      After that, when it came to buying new cars, my mother would call a dealership, ask them for a price, and then call another dealership and ask them if they could beat that price…

  • avatar

    I’m shocked that people prefer to be bothered by salespeople when they are browsing. I’m used to browsing in peace and when I need info or a test drive I ask the receptionist and they send over whatever sales guy is next on the list.

    I thought that was universal. But I guess not. I know a few local dealers have a “don’t speak unless spoken to” policy and you’re supposed to ask the receptionist for assistance when you need it

  • avatar

    I leased a new Hyundai Genesis sedan in 2016. On the First try with a salesman, I rejected his price and walked back to my car in the customer lot. As I was entering the next dealership’s address into the GPS, there was a knock on my window. The Sales Manager offered me my target price plus $200. I turned off the engine, went back insider and signed the paperwork.
    Walking out of the showroom is the buyer’s most powerful negotiating tool.

  • avatar

    F&I gets a kick from the bank when they sell their loan to you and a good GM is more focused on the overall shop making money vs on initial sale, trade, and F&I. Since trade is a variable and everyone wants a deal, much easier to offer some money off on the buy to make the more reliable F&I kick and anything on holdback. Some sales they don’t make as much as they could on one of those three, but overall the shop is in the black. Let them do this, then refi the bank loan to a credit union within 90 days. In this way, you get the better sticker and/or better trade and the bank likely eats a percentage of the kick they gave out when you refi (read the fine print on the fees in the bank loan before you sign as they may tap you if you refi before a certain period). Only downside is two hard pulls in a 90 period so in general be sure manage your pulls (which you should already be doing).

    • 0 avatar

      That’s a good reason to add “I’m paying cash” to the list of things not to say. Even if you can pay cash.
      Also, show up with an approved loan rate in hand, but there’s no reason you have to use it. Let them try to beat it. Nine times out of ten they will, even if only by a small amount.

    • 0 avatar

      “F&I gets a kick from the bank when they sell their loan to you”


      But when I bought my GTI in Dec. 2017, they found me a 1.86% loan. Seriously. I took them up on it. Only $1100 interest TOTAL over 5 years, while I leave my cash in investments? Sign me up.

      How much kickback did they get for a 1.86%, $1100 total interest loan? It almost wasn’t worth them spending the time to do the paperwork.

  • avatar

    On my last purchase I leveraged my CU pre-approval to squeeze more out of my trade. We were $1000 off on what I’d take and sales said “I’ll go up to your ask but I want the financing” – plugged his rate in my amortization spreadsheet and it came out to an extra $1.22/mo over 48. Fair trade in my eyes to get the $1K for max $60 in additonal interest payments.

  • avatar

    I like to tell them right up front that I don’t operate under the “how much are you willing to spend” course of dealing. I tell them that: “I have researched the vehicle and I think I can get it for this much. If you cant do it, I understand and will keep looking.”

    I make sure to let them know how upsetting it is that the last dealer came in with an offer that was a full 25% higher monthly payment that their final offer and how much I hate dealing with people perfectly willing to rip me off if I let them.

    I never tell them I am a lawyer because that is usually the first question they ask “so what do you do for a living” so they can size you up.

    Regardless of how good the deal is, I know they are making money on the sale. Everyone needs to eat, I don’t mind them profiting from the sale. I am not looking for the deal of the century, just a fair deal. That can be difficult to come by.

    • 0 avatar
      SCE to AUX

      “Regardless of how good the deal is, I know they are making money on the sale.”

      That’s typically my assumption, too, but car dealers sometimes go out of business despite their best efforts.

      I also figure the quality of my deal is inversely proportional to the majesty of the dealer’s facility. You won’t be getting a killer deal at the place with the recent multi-million dollar showroom overhaul.

      • 0 avatar
        Add Lightness

        Somebody is paying for their stainless
        steel/glass/granite palace and I’m not figuring it being me.
        I can’t help myself but I always gravitate to the plywood walls/bare concrete floor dealers.
        Unfortunately, Corporate standards force new car dealers to make the comfy petrohead Fiat/Lotus/Honda dealers from the 70’s completely extinct.
        BTW, I take my cut of these stupendous buildings at the construction stage and just shake my head at what they are trying to attract. (inverse markup you may say)

    • 0 avatar

      Just tell them you are selling cars for living at “some different brand”

  • avatar

    Yes, I got the ED discount, about $4k. Also got discounts on flight and hotel to Munich.

    I did not burden them with my 10 year old Mark VIII. Mark VIIIs were becoming cult cars, and I sold it on E-bay for $5k, with150,000 miles on it.

  • avatar

    1. “While CarsDirect or TrueCar may be convenient, this doesn’t mean they’re cheaper.”

    Exactly. You can easily get another $1000 without even trying

    2. “Include all the other fees, title, and taxes in your offer. It’s called the ‘out-the-door’ price…”

    This!!! This is how I always work dealers. I just tell them at one point, ” just give me OODP.” And work them on that.

    3. Why do we even need to discuss it here? I am sure that everyone here knows this stuff

    4. I only have met one sales person who actually knew the product he was selling. That was refreshing.

  • avatar

    Here’s a hot tip for all you browsers: GO DO YOUR BROWSING WHEN THE DEALERSHIP IS CLOSED. When there’s an “up on the the lot” the salesmen get yelled at if they DON’T go out to greet you. You lurking around the parking lot is going to drive the manager crazy and he’s going to to keep seeing an unattended “customer” that someone should’ve helped already. The salesman that says “they are just looking” to the manager is viewed as weak by the manager. Why are you trying to mess up everyone’s day because you have nothing else to do??

    • 0 avatar

      I think meandering the dealership property while closed may prompt a friendly visit from the local police.

      • 0 avatar


        Naah, I Sunday shop for grins. As long as you are doing it during the daytime, the cops don’t care. Never run into a problem anywhere but Carmax, which won’t let you on the lot after hours.

      • 0 avatar

        I usually browse the lot after business hours.I’ve never had an issue with after hours browsing. I don’t care if I waste a salesperson’s time, I prefer not to be annoyed by them when I’m not ready to buy. They tend to know little about what they sell.

    • 0 avatar

      “Why are you trying to mess up everyone’s day because you have nothing else to do??”

      That’s very unfortunate but I’m not going to alter my shopping schedule of a $50k+ consumer product to accomodate the peculiarities of car sales personnel.

  • avatar
    Master Baiter

    Invariably the car I’m shopping for is in high demand and short supply, otherwise, why would I want it?

    So there’s usually not much room to bargain on price. Conversely, if you got a great deal, it’s probably not a very desirable car.

  • avatar

    In general, I don’t like sales people that can’t understand pure English, they would sit across from you at the table and you say “I am not willing to pay more than xxx” but they continue with “how about this and how about that”, then, they will walk away and come back with the sales manager, that is the point were I am getting up and leave.
    At one time, the largest Mazda dealer in NJ actually held my car key hostage ! not kidding, I had to stand up and threaten I will call the police if I don’t get my key!

  • avatar

    Is it considered a baller move to hand the salesman an already filled out 4-square when you walk through the door?

  • avatar

    I think sometimes the people at dealerships know when I actually want them to talk to me, so they can avoid it. At one place, I would go in and be waiting on my car, and I would be asked, over and over again, “Has anyone helped you sir?”. I go in there to actually buy a car, same clothes, same everything about me, and I’m ignored. Like I’m invisible. I thought it was just a coincidence, but I went to another dealership that I’ve bought from in the past, and I’m ignored again. I’m a big guy and hard to miss, so that seems odd to me. A third place had a car that had been sitting on the lot for a long time, and the price they had offered a friend on it, out the door, was cheap enough to make me ignore it being silver, and check it out. After long time sitting and walking around in the showroom, I finally got someone’s attention. In the end, I got offered a price even less than my friend was offered a week earlier, but I just couldn’t imagine looking at a silver car for the next 5+ years, so I passed. Another friend finally bit on it with his brother and sister and bought it for their dad, who loves silver anything, and he still has the car with only about 11,000 miles on it. It’s a 2017 model, and isn’t driven in winter at all.

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