Most people shopping for a new car spend their time comparing models, trims, options and prices. That's important, but once you've decided which car you want, there's another part of the process that can make a surprisingly large difference in what you pay:
Stop shopping just for the car and start shopping for the dealer.
I spent years working as an auto broker, and one of the most useful things I learned was that two dealerships selling essentially the same new car can have very different reasons for wanting your business.
One dealer may give you an ordinary price. Another may be considerably more aggressive. You don't necessarily need to know why. You just need to give enough dealers the opportunity to show you how badly they want to make the sale.
Why Do Different Dealers Charge Different Prices for the Same New Car?
Different dealers can offer very different prices on the same new car because their inventory, sales goals and motivation to make a particular sale aren't the same.
A dealer may have too many of a particular model. Another may be trying to hit a sales objective. A vehicle may have been sitting longer than the dealer would like. There can also be differences in local demand, competition and other circumstances inside the dealership that you, as the buyer, may never know about.
Fortunately, you don't have to figure any of that out.
This approach can work even when you're shopping for a high-demand vehicle. Strong demand may reduce your negotiating room, but it doesn't mean every dealer selling that vehicle is in the same financial position or under the same pressures. Dealers can have different inventory levels, sales objectives, cash-flow needs and other reasons for wanting to make a particular sale.
That's why I wouldn't assume that a high-demand vehicle automatically means there's no deal to be made. Two dealers may refuse to budge while two others have a reason to be much more aggressive. Sometimes the difference may simply be avoiding a market adjustment or unwanted add-ons, but under the right circumstances it can also mean significant savings.
In fact, when some dealers aren't negotiating, finding the ones that are especially motivated can become even more valuable. You don't necessarily have to know what's creating that motivation. Give enough dealers the opportunity to compete and let their offers reveal it.
Let the dealers' prices tell you who is motivated.
This is where my approach differs a little from simply deciding what you think the car should cost and trying to negotiate every dealer down to that number. I'd rather first find the dealership that already has the greatest reason to make a deal.
How Many Car Dealerships Should I Contact to Get the Best Price?
There isn't a magic number of dealerships you must contact, but you want enough competing dealers to expose meaningful differences in their prices.
If you contact only one or two dealers, you don't really know whether either one is particularly motivated. With several dealers competing for the same sale, it becomes much easier to see when one offer stands out.
In a large metropolitan area, you may have plenty of dealers nearby. In a smaller market, you may need to expand your search.
I normally include dealers within about 100 miles. That doesn't mean you have to drive 100 miles to buy the car. You're simply widening the competitive field and finding out what dealers in the surrounding market are willing to do.
The objective isn't to collect dozens of quotes. It's to create enough competition that an unusually motivated dealer has a chance to reveal itself.
How Do I Ask a Car Dealer for an Out-the-Door Price?
Ask the dealer for a written out-the-door price that clearly shows the vehicle's selling price and the additional charges required to complete the purchase.
Getting an attractive vehicle price isn't very useful if thousands of dollars in dealer add-ons and fees suddenly appear later.
When comparing quotes, make sure you're comparing the same vehicle or equivalent configurations and look at the complete transaction rather than just the advertised discount.
You can simply tell the dealer that you're comparing offers and would like the selling price and an itemized out-the-door figure in writing.
Pay particular attention to dealer-installed accessories, protection packages, documentation charges and other dealer-added fees. Some charges are legitimate government or manufacturer charges, while others may represent additional dealer profit.
If you're unsure which is which, see my guide to car dealer fees and which ones you may be able to negotiate or avoid.
The important thing is that a dealer shouldn't appear to be $1,500 cheaper than another dealer only because $1,500 worth of charges hasn't been disclosed yet.
What Should I Do if a Car Dealer Won't Give Me a Price Online?
If a dealership won't provide useful pricing information before you visit, you don't have to let that dealer control the process.
You can politely explain that you're contacting several dealerships and will decide where to shop after reviewing their offers.
Some dealers may still insist that you come into the showroom before they'll discuss meaningful numbers. That's their choice. But it's also your choice whether to spend your time there.
I wouldn't get into an argument or repeatedly try to force a reluctant salesperson to provide a quote. If several other dealers are willing to compete for your business, those are the dealers I'd concentrate on first.
Remember what you're trying to discover: which dealership most wants to sell you the car. A dealer that's willing to provide a serious, competitive offer has already given you useful information.
Should I Tell a Car Dealer I'm Getting Quotes From Other Dealers?
If you're requesting prices through an online service that sends your request to multiple dealers, as I recommend, you don't need to tell them you're shopping their competitors—they already know.
Dealers participating with services such as Edmunds, AutoTrader and other online car-shopping sites understand that the leads they receive are competitive. When your request arrives, they know other dealers selling the same vehicle have received it too.
That's actually one of the advantages of getting dealer quotes this way. The competition is established before you ever speak with a salesperson. The dealer knows it isn't simply competing against your willingness to buy; it's competing against other dealers for your business. That can provide an additional reason to make the initial offer attractive.
I'll explain more about where to request multiple dealer quotes in a moment.
If you're contacting dealerships individually instead, there's nothing wrong with letting them know you're comparing prices from several dealers. But I wouldn't necessarily tell each dealer exactly what the others have quoted, especially at the beginning.
Give each dealer an opportunity to show you what it's willing to do on its own. If you immediately provide the lowest price you've already received, you may simply encourage the next dealer to beat that number by the smallest possible amount.
Remember, those initial quotes aren't just prices. They're also helping you identify which dealer appears most motivated to sell you the car.
Should I Buy From a Local Dealer or Travel for a Lower Price?
Buying from a dealer farther away can make sense when the savings are large enough to justify the additional time and inconvenience.
I wouldn't drive a long distance merely to save a trivial amount of money. But if a dealer 50 or 100 miles away is substantially more aggressive than the dealerships near you, it's worth considering.
You can also give a local dealer an opportunity to compete with a legitimate offer you've received elsewhere. Just make sure you're comparing equivalent vehicles and complete prices.
Factor in your travel time and expenses as well. A distant deal that saves $200 may not be worth pursuing. A much larger difference could be another matter.
And don't assume that you must buy from your nearest dealer in order to have the vehicle serviced there. Warranty service and the purchase transaction are separate matters.
Should I Take the Lowest Dealer Quote or Keep Negotiating?
I wouldn't automatically assume that the lowest initial quote is the lowest price that dealer will accept.
This is one of the most important parts of the process.
Suppose you contact several dealers and most of the quotes are clustered fairly close together, but one dealership comes back hundreds of dollars lower.
Many buyers would simply declare that dealer the winner and accept the offer.
I look at it a little differently.
That unusually low quote may have just identified the dealership that's most motivated to make the sale.
Now you've found the dealer I most want to negotiate with.
That doesn't mean you should make an unreasonable lowball offer. You don't even have to decide exactly what you think the dealer's bottom-line price should be.
Instead, give the dealer an opportunity to improve its own offer.
For example, I might say:
"Based on your offer, I'm not prepared to purchase this vehicle at this price. If you'd like to submit another offer, I'd certainly consider it. It's up to you."
Then stop.
You haven't told the dealer what price it has to reach. You haven't negotiated against yourself. And you haven't claimed that another dealer offered a price that doesn't exist.
You've simply given a dealership that has already demonstrated unusual motivation another opportunity to earn your business.
If it improves the price, great. If it doesn't, you still have its original quote and the other dealers you've contacted.
Where Should I Get The 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.
What's the Best Way to Get the Lowest Price on a New Car?
The best way to get the lowest price on a new car is to create competition among several dealers and use their offers to find the dealer most motivated to make your sale.
That's the key idea behind this entire strategy: don't just shop for the car. Shop for the dealer that most wants to sell it to you.