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How to Negotiate the Best Price on a Car

It’s the last big hurdle of every car-buying experience. You’ve already met with the seller or used car salesman. You’ve finished the test drive. Everything’s gone smoothly so far, but now you have to (gulp) negotiate on the price of the car. Dun-dun-dunnn.

We get it, the idea of going back and forth with sellers on car price is about as enticing as stepping into a boxing ring with Mike Tyson. But you know what is fun? Driving home with a new-to-you car that you know you got for a bargain!

Whether you’re negotiating for a car or a new sofa, Dave Ramsey says there are three rules to remember:

  1. The person with the most information usually wins. That means doing your homework and becoming an expert on the kind of car you’re looking to buy. This is one of those cases where it helps to be the smartest person in the room.
  2. The person with the most patience also wins. You can’t negotiate when you’re desperate or emotionally attached to a car—even the worst sellers will sniff that from a mile away. You’ve got to be willing to walk away from a bad deal. There are plenty of cars in the sea!
  3. The person with the most options wins. If you’re trying to choose between two bad options, it doesn’t matter which one you choose—you’re going to end up with something that sucks. And that’s not going to cut it! The more options you have, the more likely you are to get a good deal.

When you combine knowledge, patience and options, you’re going to win the negotiation every time! And the key to successful negotiating starts long before you get into a room with a private seller or step into a car dealership.


Dave's easiest money-saving tip: See if you're over paying for car insurance.

Let’s dive into some car negotiating tips that will help you drive home grinning from ear to ear.  

Do Your Research

Whether you’re walking into a dealership or meeting with a private seller, you should be armed with as much knowledge as possible on the car (or cars) you want to buy. If you decide you’re going to buy a Honda Civic, you need to learn everything you can about Honda Civics. That means you’re reading articles about the car, talking to people who drive them, and getting an idea of how much they’re worth.

Kelley Blue Book or Edmunds can help you find a price range to work from when you’re negotiating with sellers. And it’s so important to have this information—if you don’t know what a car is worth, you might pay too much for it.

Find Several Options to Choose From

Pay a visit to a handful of dealerships and private sellers that are selling the kind of car you want and get some offers on the table to pick from. The more options you have, the more power you have in a negotiation. You won’t feel boxed in to take a bad deal because you have other options available.

Let’s say you’re looking at two used trucks that are in similar condition. One is being sold at a dealership and the other by a private seller. After you meet the private seller and kick the tires on the truck, the seller says they want $9,000. You tell them you’ll sleep on it. The next day, you go to the dealership and the sales guy says they want $10,000 for their truck.

You can tell the dealer, “That’s not good enough,” since you have a better offer on the table. Maybe the dealer will counter with a new offer that’s under $9,000. If not, that’s okay. You can just go back to the private seller. Either way, you win. That’s the power of having options!

Don’t Shop in a Hurry

When you’re negotiating for a car, the worst thing you can do is go in desperate or be in a rush to get a deal done. That’s how you end up staring at that car in your driveway the next morning wondering, What was I thinking?

A car is one of the most expensive things you’ll ever buy, so take your time to think it through. Our new Ramsey Car Guide can help walk you through the ins and outs of buying a car the right way!

Use Your “Walk-Away Power”

Have you ever gotten emotionally attached to a car during the test drive? Maybe you’ve already picked out a name for it in your head? We’ve all been there.

But listen, don’t get too carried away with a car before you’ve signed on the dotted line. If you really like the car, you’ve got to put on your best poker face and play it cool. Because once the seller gets a whiff that you’re head over heels for their car, you’ve already lost. They’ll try to milk that for all it’s worth, because they know you’ve bought the car in your head and will probably be willing to overspend.

Remember: You need to be willing to walk away if the price isn’t right, and it’s hard to walk away when you’re emotionally invested in a specific car.

Understand the Power of Cash

The best way to buy a car is with cash. But does cash really have the same power that it used to? In a society where most folks buy things with the swipe of a card, it’s a fair question. But in an increasingly “cashless” society, cash is probably even more powerful as a negotiating tool than ever!

Nothing is more stressful than selling a big-ticket item worth thousands of dollars and wondering if the person’s check is going to bounce or if their loan approval will come through. With cash, you take away that stress completely—that makes your cash offer a lot more attractive!

People get silly when they see cash—real cash. It’s emotional. It’s visual. It sends a message that you mean business. So, don’t be afraid to literally put the money on the table and say, “Look, if you want this money today, you’re going to have to meet me at this price. If not, I’m outta here.” Even in a world with PayPal, Venmo and Apple Pay, it’s still all about the Benjamins!

Don’t Say Too Much

Negotiation and confrontation can make anyone nervous, and you know what many of us do when we’re nervous? We talk too much. Sometimes the best thing we can do during a negotiation is just shut up!

Simply say, “John, this price is too high.” Then be quiet and see how far the seller will talk himself down on the price. When you talk too much, you might end up giving away more than you bargained for, so let the seller do most of the talking.

Ask the Seller to Sweeten the Deal

The best negotiations are win-win deals. The buyer wins, the seller wins . . . everybody wins! There’s a healthy give-and-take involved, and sometimes that goes beyond the price tag. If a seller doesn’t want to budge on price, you can get a little creative and ask the seller to throw in something extra so you’ll agree to pay them what they want.

If you and the seller take the car to a mechanic who finds a problem with the car—maybe it needs new brake pads or the tires are worn down—that’s something you can use to either negotiate a lower price or sweeten the deal.

You can say, “If I’m going to give you $10,000 for the car, then I want you to throw in brand-new tires.” It doesn’t hurt to ask!

Don’t Forget Car Insurance Costs

When you’re shopping around for a new car, a lot of people forget to factor in one big expense: auto insurance. If you’re upgrading to a newer model of car or truck, there’s a good chance you might see a bump in what you pay for coverage.

So, once you’re done negotiating for your new ride, you’ll want to connect with one of our insurance Endorsed Local Providers (ELPs). Our ELPs are independent insurance agents who will help you get the right coverage in place and shop around for the best deal on car insurance. They bring the options to you, so you don’t have to go looking for them!

Find your independent insurance agent today!

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About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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