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How to Negotiate the Best Price on a Car

Okay, so you’ve picked out the kind of car you want. Maybe you’ve even taken it for a test-drive. But now you have to (gulp) negotiate on the price of the car, and your armpits are already sweating.

I know the idea of going back and forth with a seller on car price is about as fun 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 good deal—because you paid with cold, hard cash (more on that later).

So, buckle up! I’m here to help you negotiate the best price on a car.

How to Negotiate the Best Price on a Car

Whether you’re negotiating for a car or a new sofa, remember this: The person with the most information, the most patience and the most options is the person who usually wins. (Aka don’t be desperate and don’t be impulsive because the salesman can sniff that out like a dog looking for treats.)

But the key to a successful purchase starts even before you talk to someone face-to-face. Here’s how to negotiate and get the best deal on your next ride.

1. 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 specific car (or cars) you want to buy.

For example, 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. I’ve even printed up several of the same car comps from around the area and brought them with me for even more leverage.

2. Find Several Options to Choose From

Don’t just settle on one seller, guys. Check out several places to buy used cars—including dealerships and private sellers that have the kind of car you want. That way, you won’t feel boxed in to taking a bad deal. And the more offers you have to pick from, the more power you have to negotiate.

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 make sure everything looks good, 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.

But since you’ve got a better offer on the table, you can tell the dealer, “That’s not good enough.” Maybe they’ll counter with a new offer that’s under $9,000. If not, that’s okay, because you’ve still got the private seller simmering on the back burner. Either way, you win! That’s the power of having options.

3. Don’t Shop in a Hurry

When you’re negotiating for a car, the worst thing you can do is go rushing in to make a deal. Car salesmen can sense your desperation, people!

When I was in college, the heat in my paid-off Ford Taurus went out in the middle of winter. I went to a dealership “just to look” (famous last words). Needless to say, I walked out with a new car, a $300 car payment, and a co-signed loan. The only ounce of saving grace was that I bought the Jeep instead of the PT Cruiser they tried to sell me. What was I thinking?


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

Take it from me: A car is one of the most expensive things you’ll ever buy, so take your time to think it through.

4. 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. I personally think you should walk away at least once. It’s a good skill to practice. There will always be more cars.

5. Understand the Power of Cash

Hear me loud and clear: The best way to buy a car is with cash. If they ask about financing, I tell them, “I don’t speak finance. I don’t know the language. I only speak cash money!” But does cash really have the same power it used to? It may seem like we’re heading for a cashless society, but cash is still the most powerful negotiating tool!

Sure, car salesmen would rather you finance a car—after all, that’s what makes them the most money in the end. Yes sir, they get kickbacks from the finance company for every financed car. Not to mention, when you finance a car, the process takes a lot longer than paying cash—which means they have more time to talk you into a bigger monthly payment (shoot, that’s how people end up with a $1,000 car payment!).

But when you walk in ready to slap down a stack of Benjamins, you’ve taken away their power to upsell you. Having exact cash in hand sends the message you’re serious about sticking to your budget—and you won’t be talked into buying a car you can’t afford.

When we bought our last car, I told the sales guy, “This is all the cash we have, and this is all that we will pay. We’re not trading in, either, because we don’t need a car. We’d just like to have one—if the price is right. And this is the only right price.” Then I slid the money toward him. My husband, Sam, looked at me and then at the salesman like, “Good luck, dude!”

So, don’t be afraid to lay it on the line and be firm! Tell them, “You’re going to have to meet me at this price. If not, please believe, I’m out of here.”

6. 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, “This price is too high” or “That’s more than I’m willing to spend.” 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.

In that moment, when I slid the cash over to the salesman, I promise you we sat staring each other down in silence for a good 30–40 seconds. “Okay,” I said. “Let’s go, Sam.” And we stood up. Then the salesman got up to “check with his manager.” He knew your girl was not to be played with!

7. 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 a 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.

For example, if you find a problem with the car during inspection (maybe it needs new brake pads or the tires are worn down), you can use that to either negotiate a lower price or sweeten the deal. I know I’d be like, “If I’m going to give you $10,000 for the car, then you’re going to have to throw in brand-new tires.” It never hurts to try!

How to Save Money On a Car

Negotiating on a car price can help you get the most car for your buck. But there are some other things you can do—before and after you seal the deal—to save more money overall.

Choose Used Over New

So many folks want to pull up to work in the latest model. But with how fast new cars depreciate, you’re basically throwing money out the window. In fact, a new car loses about 9–11% of its value the moment you drive it off the lot—and it goes on to lose 60% of its value within five years!1

The truth is, you get a better deal when you buy a used car over a new car. Let some other sucker take the hit from depreciation, and you swoop in for a sweet deal. It’s also way easier to negotiate the price on a used car. And don’t come at me with, “But Jade, used cars aren’t reliable.” Uh, I’m not sure where you’re looking, but there are definitely good used cars out there right now. And I know, because I own two of them: a 2012 I bought in 2017 and a 2013 I bought this year!

And do you know what a new car is after one year? A used car. But by then, it’s already worth about 20% less than its original price. Trust me, you’ll save so much money when you stop caring about the new car smell (just get you a nice air freshener).

Save Up for the Car You Want

Like I said before, the best way to buy a car is to pay cash for it. Not only does a car loan cost you big time in the long run, but having a car payment is also super stressful. Instead, you’ll get a better deal when you save up to pay for a car in full and up front. And that starts with a budget.

A budget helps you save for the things you want faster—including a car. Go ahead and create a budget for free with EveryDollar. Once you get in the habit of telling your money where to go every month and finding ways to cut back, you’ll have that car fund in no time!

Get the Right Insurance

When you’re shopping around for a car, a lot of people forget to factor in one big expense: auto insurance. And if you’re upgrading to a newer model, you’ll probably 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 RamseyTrusted insurance pros. These 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!

Connect with a RamseyTrusted insurance pro today!

Kick-Start Your Car Fund

Saving up for a car? Need some extra cash for car maintenance? EveryDollar gives you a plan for your money—so you can fuel your savings and hit your goals faster.

Create My Free Budget

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Jade Warshaw

About the author

Jade Warshaw

Jade Warshaw is a personal finance coach, bestselling author of Money’s Not a Math Problem, and regular co-host on The Ramsey Show, the second-largest talk radio show in America. Jade and her husband paid off nearly half a million dollars of debt, and now she’s a six-figure debt elimination expert who uses her journey to help others get out of debt and take control of their money. She’s appeared on CNBC, Fox News and Cheddar News and been featured in Fortune and POLITICO magazines. Through her social content, recent book, syndicated columns and speaking events, Jade is on a mission to change the typical American money mindset. Learn More.

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