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Are New Car Prices Negotiable?


When purchasing a new car, you may turn away options due to its price, interest rate and other fees. It is important to understand all these costs up front when you want to buy a new vehicle. Often, you will find a car that is right for you in every way but the price. In a case like this, negotiation might a good option. There is one thing you should know before starting your car search: the price of a new car is always negotiable.

When buying a new vehicle, you will negotiate its total cost. From the basics to upgrades and add-ons, everything that goes into the purchase price of a car is negotiable. There are many factors that play into negotiating various aspects of the cost of a vehicle.

Some of these factors include:

  • Type of vehicle: Some vehicles are known as “volume models” and are often discounted because they are readily available from the manufacturer, such as Dodge Caravans and Toyota Camrys.

  • Time of year: If you are car shopping later on in the year, you are likely to get a better deal on a car from the current year. Dealers need to make space for the next year’s cars, which begin being released in August.

  • Your credit score: The better your credit, the better end price you are going to get on the vehicle. With an excellent credit score, you are a dream customer to a dealership. The Size of Your Down Payment- If your down payment is large, for example, 20% of the total price of the car, you may be able to negotiate a lower overall price. As with the credit score, dealers are eager to do business with people who can do larger portions of their car purchase without financing as it is assumed that there’s a better guarantee that you will not default on the loan.

What else can you negotiate?

When buying a new car, you can also negotiate the amount of your interest rate. Again, this will be a reflection of your credit. If you have excellent credit, you are less of a risk to the loaning bank, so they will be willing to trust you with a lower interest rate. Since you are less likely to default, it costs them less to administer your loan. Additionally, make sure that you shop around for a loan. It is much easier to negotiate with “Bank A” if you can tell them that “Bank B” offered a lower rate.

What a dealer won't negotiate

There are some fees that a dealer cannot negotiate on. These include documentation fees, sales tax, and tag and title fees. These fees are set by state agencies and not the dealer.

Also remember that the dealer may not negotiate below a set price on the vehicle that you want. While this may not mean they do not wish to make a deal with you, they may not always be willing to take a loss on the vehicle. It is also important to note that dealerships such as Carmax, Scion, and Saturn are “one price” dealers and will not negotiate their prices.

Finally, never purchase a car as an impulse buy. Even when you find your dream car, it is essential that you do your research to make sure that you are paying the best price.

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details

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