How to Get the Best Price on a New Car

What's the best way to get the lowest price on a new car?

Most buyers assume the answer is becoming a better negotiator.

After spending years in the automobile business—and another 15+ years helping consumers buy cars—I've come to a different conclusion.

The buyers who consistently get the biggest discounts usually aren't the toughest negotiators.

They're the ones who understand how dealerships really work and know how to find the dealer that's most motivated to make a deal.

That's exactly what this guide will show you.

We'll begin by answering one of the most common questions car buyers ask...

How Much Can You Negotiate Off a New Car?

How much you can negotiate depends on several factors, including the popularity of the vehicle, local inventory, manufacturer incentives, and—perhaps most importantly—how motivated the dealership is to sell it.

While there are no guarantees, there are some fairly consistent real-world discount ranges that buyers can realistically expect.

Typical Discount Ranges

Remember, these are general guidelines. Market conditions can change quickly, and every dealership has its own pricing strategy.

Why Invoice Price Matters More Than MSRP

Many buyers focus entirely on the sticker price.

Dealerships usually don't.

While MSRP is useful as a starting point, invoice price is often a much better reference when evaluating an offer because it more closely reflects what the dealership was billed for the vehicle before manufacturer incentives, bonuses, and holdbacks are considered.

If you'd like to see a vehicle's invoice price, many online buying services provide it while you're requesting dealer quotes.

What Actually Determines Your Discount?

Contrary to what many people believe, the biggest discounts don't usually go to the toughest negotiators.

They go to buyers who happen to be purchasing the right vehicle, at the right dealership, under the right market conditions.

The biggest factors include:

Notice something interesting?

Only one of those factors has anything to do with your negotiating ability.

Most of the others depend entirely on market conditions and the dealership itself.

Typical Buyer Results

Over time, most buyers tend to fall into one of four fairly predictable categories.

The interesting part isn't the numbers.

It's how buyers reach them.

The widest differences usually don't come from arguing longer with a salesperson.

They come from putting yourself in a position where dealerships compete for your business.

Practical Buyer Takeaways

Bottom line: Knowing what's possible is only half the battle.

The more important question is this:

How do some buyers consistently end up near the top of these discount ranges while others pay thousands more for the exact same vehicle?

Surprisingly, it usually isn't because they're better negotiators.

It's because they're using a completely different buying strategy.

And that's where the real story begins.

The Biggest Mistake New Car Buyers Make

Most buyers think the next step is becoming a better negotiator.

That's understandable.

After all, if one buyer saves $5,000 and another saves only $1,500, it seems logical to assume the first person was simply better at negotiating.

In reality, that's often not what happened.

The biggest savings usually don't come from negotiating harder.

They come from negotiating with the right dealership.

That may sound like a small distinction, but it completely changes how you should approach buying a new car.

Stop Shopping for the Car ... Shop for the Dealer

Once you've decided which vehicle you want, most of your research is finished.

You already know the make, model, trim level, colors, and options you're looking for.

Now your focus should change.

Instead of continuing to shop for the car, begin shopping for the dealership that's most motivated to sell it.

That simple shift is where many of the biggest discounts begin.

Why the Same Vehicle Can Have Very Different Prices

Many buyers assume that every dealership selling the same vehicle should have roughly the same price.

After all, they're all selling the exact same car.

So why would one dealer be willing to accept thousands of dollars less than another?

Because every dealership operates under completely different business conditions.

One dealership might have only two of that model in stock.

Another may have twenty.

One dealer may have already reached its monthly sales goal.

Another may still need several more sales before month-end.

One dealership may have another truckload of inventory arriving next week with very little room left on the lot.

Another may have no immediate inventory concerns at all.

Same vehicle.

Different business.

Different motivation.

A Huge Factor: Floorplan Costs!

One of the biggest reasons dealerships become motivated to sell is something most consumers never hear about:

Floorplan financing.

Most dealerships don't actually own hundreds of new vehicles sitting on their lot.

Instead, that inventory is typically financed through loans. Every day those vehicles remain unsold, they continue costing the dealership money through interest and other carrying expenses.

Now multiply those costs by several hundred vehicles.

It's easy to understand why some dealerships become much more motivated than others to move inventory.

And floorplan costs are only one part of the equation.

Dealerships also differ in:

Those differences explain why two dealerships selling identical vehicles can arrive at dramatically different prices.

The Smartest Buyers Let Dealers Reveal Themselves

Here's the beauty of this strategy.

You don't have to guess which dealership is carrying too much inventory.

You don't need to know who's trying to reach a sales objective.

You don't have to calculate floorplan costs.

You simply let the dealerships reveal themselves.

Request price quotes from several dealerships before visiting any showroom.

The dealership that immediately provides one of the strongest offers is often telling you exactly what you need to know.

"We're motivated to earn your business."

That's the dealership you want to keep talking to.

Now Let the Dealers Compete

Once several dealerships know they're competing for the same sale, the entire negotiation changes.

Instead of trying to convince one salesperson to lower the price, you're allowing multiple dealerships to compete for your business.

That's a much stronger position to negotiate from.

In many cases, the dealership most motivated to sell has already provided a very competitive price before you've even started negotiating.

Your job now becomes comparing those offers—not trying to guess whether one salesperson is giving you their "best price."

Why This Strategy Consistently Works

Best of all, almost all of this happens before you ever walk into a dealership.

Instead of spending hours wondering whether you've negotiated well, you arrive knowing exactly where the marketplace stands.

Where to Get Multiple Dealer Quotes

There are many great auto sites that offer multiple dealer quotes. I happen to prefer Edmunds.com, due to their massive dealer participation and easy process. I've just had good experiences there.

But you can use any of the great car sites out there, such as AutoTrader, KBB, CarGurus, and others. The most important thing is to just get the quotes to set up the competition.

Usually, you'll just enter your make and model, then select the year, and then click on something like "Check Availability" or "Find Best Price". And I normally include dealers within 100 miles to be sure of a brisk competition, but you may have to go further if you are in a more rural area.

How to Respond After Receiving the Quotes

Most dealerships will respond by email, text message, or both. Some salespeople will also call you.

If you'd rather compare offers without discussing them over the phone, simply say:

That keeps the process friendly while allowing you to compare offers on your own schedule.

Always compare the complete out-the-door (OTD) price, including dealer fees and accessories. If it isn't included in the first quote, simply ask for it.

Otherwise, you're not making a true apples-to-apples comparison.

Should You Negotiate More?

If you want to negotiate further, which I usually recommend, you can respond to the highest bidders with an email telling them you have gotten a lower competitive quote. Never tell them what it is. Just tell them you'll consider their new offer if they want to send one. Simple, that's it.

You can even do something similar with the low bidder if you are not satisfied with the price. I don't recommend lying in any way. At the same time, you don't have to tell them they were the lowest bidder either. You can just tell them the truth, something like ...

Eventually the revised offers stop arriving.

When that happens, you've found the current market's best pricing.

At that point, you can buy with confidence knowing you've allowed the marketplace—not guesswork—to determine your final price. Or, you can do nothing at all.You're under no obligation.

One Last Buyer Tip

If your schedule is flexible, remember that one of the best times to buy a new car is when you don't actually need one.

Without the pressure of replacing a vehicle immediately, you can request quotes whenever you like, watch how prices change over time, and move quickly when an unusually strong offer appears.

Patience is often one of the most valuable negotiating tools you'll ever have.

Does This Strategy Work for Leasing?

Absolutely.

Lease payments are based largely on the negotiated selling price (capitalized cost), so every dollar you save on the purchase price generally lowers your monthly payment as well.

To give you an idea of the lease savings, for every $1,000 the price comes down, your payment will decrease by approximately $28 per month on a 36 month lease.

Once you've negotiated the vehicle price you're happy with, simply ask the dealership to calculate the lease using that agreed-upon selling price.

Bottom line: The buyers who consistently get the best deals usually aren't the toughest negotiators.

They're the ones who understand that the smartest strategy isn't simply shopping for the right car.

It's shopping for the right dealer.

So to get started, head on over to Edmunds.com or the site of your choice and I think you just may find this quite illuminating, and even fun.

Well, I hope this has been helpful. Have fun turning the tables with this ... and let me know how you do.

All the best - Josh