Negotiation can be tricky for many people, especially those who are usually not particularly assertive and shy away from conflict or confrontation. However, negotiation is not a confrontational action, but rather an expected part of the car buying process. Most sellers will be surprised but quite pleased if the buyer doesn't even try to negotiate the price. However, negotiation isn't the same as haggling over a trinket at a junk shop. It is important to make the right moves during negotiation over a car purchase.
The first step to successful negotiation happens at home, well before the actual negotiation discussion begins. Do not negotiate without first doing some research. Once you decide on a specific car make and model, go online and find out what the car's value is. Find out what other people have paid and research the car's retail value. Make sure you are looking up the correct year and the exact configuration you want. For example, if you want the luxury configuration of a certain car, don't look up the price of the base model that has cloth seats and other standard features. Make sure your research is precise and accurate.
Have Firm Boundaries
Once you find the retail value for the car you want, decide your ideal price and set an upper limit for how much you are willing to pay. Because you know what other people have been paying and what the retail value is for the car you want, you know what the reasonable price range is. Have a definite number in your head, and do not agree to pay more than that limit.
Time Your Purchase
Some times of year are better than others for car shopping. Part of your pricing research can also include looking into the local market and seeing when dealerships tend to be most desperate to make a sale. Conventional wisdom holds that the end of the month or the end of a yearly quarter tend to be high-pressure times for car salespeople, so this may be the best time to gear up for a successful negotiation.
Don't develop a bad reputation at the dealership or otherwise offend the person selling the car. Be friendly and courteous when you meet up with the seller to inspect and test-drive the vehicle. People who regularly sell cars are used to people trying to get on their good side, so don't go overboard, but sellers are very unlikely to lower their selling price for someone they do not like.
Don't get your heart set on one car in particular. Be open to buying a slightly different configuration elsewhere. This flexibility gives you the power to walk away from a deal that isn't good enough. Also, being aware of other options can make you feel more empowered in a negotiation, and it also gives you a good bargaining chip.
During the Negotiation
Now the time has come to actually get down to business. Go to the dealership or meet the seller in person. It's best to negotiate face-to-face in real time rather than over the phone or via email. Stay calm and remember your ideal price and upper limit. The seller or dealer may try to open the negotiation by asking you what you're willing to pay. Don't answer this directly. Instead, tell the seller that you've done your research and shopped around and you would like to know what his or her best price is. Allowing the other party to be the first to cite a number gives you the upper hand. Appearing informed and confident may cause the dealer or seller to open with a lower price right away.
Saying No to a Bad Offer
Of course, it is not very likely that the very first number quoted will be lower than the car's retail value. If the price is above your upper limit, shoot it down immediately. You can say something to the effect of ""that price is much higher than the car's retail value, and I know I can get a better deal than that elsewhere". The seller will likely respond with a lower number. Stick to your pre-set limits, and make it clear that you're well informed and aren't going to accept a bad price. Never agree to pay more than your upper limit, and avoid paying more than the retail value. Retail values often include profit for the dealer or seller, so do not feel guilty or think that you are strong-arming someone into taking a bad deal. Worry about your own wallet.
Talking the Price Down
Be polite and professional during the negotiation, but be firm. If the price being quoted is higher than the retail value, say that you know the price is too high and indicate that you can get a better deal somewhere else. This may make the seller feel pressure to provide a better deal. If you and the seller end up deadlocked, don't be afraid to walk away. Indicate that you plan to do this first, because that may end up breaking the stalemate.