Can You Negotiate New Car Prices? | Capital One Auto Navigator (2023)

Can you negotiate new car prices? It's something many car shoppers want to know. Here are some things to think about before you start negotiating.

By Liz Froment

Mar 9, 2022

Can You Negotiate New Car Prices? | Capital One Auto Navigator (2)Shutterstock

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It's a question many car shoppers want to know: Can you negotiate new car prices? The short answer is yes. However, for many, even the thought of negotiating new car prices can seem intimidating.

Treat this experience like any negotiation and go in with a plan. The more thought you put into it upfront, the more confidence you'll feel about speaking with your dealer about the price of your new car.

Here's what you need to know to start hatching your negotiation plan.

Key Numbers to Know Beforehand

Invoice price? Manufacturer's suggested retail price (MSRP)? Which number is right? When it comes to determining the price of a car, there can be a lot of confusion around the numbers involved. Start with a basic understanding of some of those key terms, so you know what they mean before you start negotiating.

  • MSRP: The MSRP is the retail price chosen by the manufacturer. When you go test-drive a car, this is what you'll see on the sticker in the window. You'll often see the "sticker price" referred to in commercials or by dealerships
  • Invoice price: The dealer's invoice is what the dealer paid the manufacturer for the vehicle. In most cases, the dealer's invoice is lower than the MSRP. Knowing the difference between these two numbers for the vehicle you want is a good place to start your research. Finding the specific number can be challenging, but several online resources can give you data points to start with
  • Local market rates: The final number to research is the local market rates for the car you want to buy. Car prices can fluctuate depending on various factors, and location is one of them. A little bit of time researching vehicles can help you see the ranges your make and model is going for in your area. Having a handle on these numbers canmake the negotiation process easier

What else should you consider?

Of course, there are some other things to think about before you start to negotiate new car prices.

  • Budget: A good place to start is with your budget. While the MSRP and dealer invoice will highlight the car's total price, you may want to think about it in terms of the maximum totalcar price you can affordto stay within your budget versus focusing ononly looking at monthly payments. Avoid getting stuck on payment amount during a negotiation as well, since stretching out loan terms can target a loan payment amount, while drastically increasing the total amount you pay over the life of the loan
  • Financing: If you're planning on using bank ordealer financingto pay for the vehicle, consider those costs, too. Many people shop around with a few lenders to present to the dealer to get a better rate. You may also think about gettingpre-qualifiedto show the dealership you're a serious buyer
  • Cash on-hand: Your trade-in, if you have one, ordown paymentcan also be a factor. Having a down payment is one way to help secure a loan. It shows you've got funds on hand, which helps reduce a lender's potential risk. The funds you have available to put toward the vehicle can help your negotiations
  • Features: You want to narrow down not only the make and model of the car you'd like but also the features. The car youtest-drive off the lotcould be fully loaded with all sorts of features you may not want or need. Usually, these features and their costs are in the sticker price, so you can subtract them and get a ballpark figure
  • Rebates: Depending on the manufacturer and the dealer, there also may be rebates or other special incentives available. Common ones might be $500 cash off on a new car or incentives for teachers or veterans. Keep an eye out for those as you do your research; it may be something that can come up in negotiation

Keep The Big Picture In Mind

As you prepare to start the negotiation process, take a step back and review your numbers. You've done your homework. You know the vehicle and the features you want. You understand the different pricing structures, and you've put yourself in a good position for financing.

All of this information can help you as you negotiate with your dealer. Knowing that the price is often flexible and feeling confident with your budgeting and financing options can help you work with the dealer to find a price that makes everyone happy.

Remember, negotiating with a dealer over a new car price is fundamentally the same as any negotiation. The dealer still wants to make money, but by approaching the process better informed, you can apply traditional negotiation tactics to a new car purchase as well to get the best deal possible.

How Do You Negotiate a New Car Price?

Test drive a few examples of the vehicle you want, if that's possible, and then head into the dealership when you find the one with all the right options and non-negotiable features. It's best to come into the process of negotiation already having driven the vehicle you want. You want your visit to be about negotiating the price of the one you want.

First, you'll want to focus your discussion with the salesperson on the topic of the vehicle you want, and work initially on the price of the new vehicle. Try to stay focused! Though a dealer may want to steer you into a conversation about monthly payments, redirect to total price and try to agree upon a number.

Once that's done, then you want to let them know if you already secured financing, or if you will be paying with cash. Wait to bring this up until after the price is agreed upon, since some dealers make money off of the financing process, and will be less inclined to offer you a lower price if they already know you've secured financing elsewhere. If you have the time, it might be a good idea to let them present a competing credit offer. Examine it carefully to make sure the terms are the same as what you already secured.

The process can be as simple as that, especially if you don't have another vehicle totrade in. If you do have a trade-in vehicle, it's smart to plan ahead and get several offers from local dealers or online car-valuing services so you have a realistic idea of how much your vehicle is worth.

So, can you negotiate new car prices? Now you know the answer is usually yes. As nerve-wracking as it may feel at the start, going into any negotiation with your research and a game plan can help you feel a lot more confident in your approach.

TAGScar negotiationcar buyingMSRPcar financingnew cartrade in

This site is for educational purposes only. The third parties listed are not affiliated with Capital One and are solely responsible for their opinions, products and services. Capital One does not provide, endorse or guarantee any third-party product, service, information or recommendation listed above. The information presented in this article is believed to be accurate at the time of publication, but is subject to change. The images shown are for illustration purposes only and may not be an exact representation of the product. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

Liz Froment

I love learning about money — deals, financing, and what to avoid. All that came in handy after my own extensive car search, where I put everything I learned about the financial side of things to use. That's where I can help you too. I want to give you tools to help you find the best vehicle that will fit your practical and financial needs.


How far down can you negotiate a new car? ›

New cars. It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.

Do dealerships expect you to negotiate? ›

Some dealerships and brands have developed no-haggle pricing. The price on the window is the price of the car, they say. In most cases, you'll still need to negotiate the value of your trade, the cost of financing and the price of any add-ons.

How much can a dealership take off MSRP? ›

Since the manufacturer's suggested retail price (MSRP) is technically the starting point for negotiations, any amount below MSRP is a good deal. Typically, dealers charge about 3–5% over the MSRP, and if the vehicle is in high demand, they may charge more.

Can you negotiate a car deal? ›

If you're unhappy with the sale price of your new car, or think you got too little for your trade-in, chances are you won't be able to alter those terms after the deal has been signed. If you signed the sales contract, you own the car. But if you're unhappy with your car loan, you may be able to refinance.

What not to say when negotiating for a car? ›

5 Things to Never Tell a Car Salesman If You Want the Best Deal
  • 'I love this car. ' ...
  • 'I'm a doctor at University Hospital. ' ...
  • 'I'm looking for monthly payments of no more than $300. ' ...
  • 'How much will I get for my trade-in? ' ...
  • 'I'll be paying with cash,' or 'I've already secured financing. '
Aug 19, 2019

How do you negotiate dealer markup? ›

Feel free to negotiate: Dealers don't always expect people to pay the full markup, so if the vehicle you really want has a market adjustment, try offering half of its cost.

How do you ask for a lower price? ›

Top eight phrases to use when negotiating a lower price
  1. All I have in my budget is X.
  2. What would your cash price be?
  3. How far can you come down in price to meet me?
  4. What? or Wow.
  5. Is that the best you can do?
  6. Ill give you X if we can close the deal now.
  7. Ill agree to this price if you.
  8. Your competitor offers.
Jun 15, 2022

Do you know how do you haggle or negotiate a lower price? ›

Tips to help you negotiate a better price
  • Do your research. ...
  • Have a good opening line. ...
  • Be polite. ...
  • Be aware of your body language. ...
  • Look for opportune times to buy. ...
  • Think about the situation from the seller's perspective. ...
  • Draw attention to unique features. ...
  • Ask for add-ons.
Nov 27, 2020

Do you pay MSRP for a new car? ›

If the model you want is in especially high demand, you may end up paying the full MSRP, but you'll almost always be able to negotiate with the dealer. Before you head to the dealership, it's a good idea to do some research on the market value of the make and model you're interested in.

What is best month to buy a new car? ›

In general, it's best to wait until the end of the year to buy a car. But if you can't wait that long, there are other times of year when you can still get great car deals, incentives and rebates. The best time of year to buy a car is from October through January 1, with December as the standout.

How much will a dealership come down on price on a used car in 2023? ›

Prices could drop up 5% for new vehicles and 10% to 20% for used vehicles in 2023, according to a report in November from J.P. Morgan. The basis for the prediction is that demand has stabilized and vehicle inventory is improving.

Are most dealers charging over MSRP? ›

Some vehicles command well above MSRP.

With that bit of folksy poetry fixed in your mind, you'll need to guard against any dealers treating today's short supply of cars like a winning lottery ticket. Many are tacking thousands of dollars in dealer markups to the manufacturer's suggested retail price (MSRP).

What is a good interest rate for a car? ›

The average interest rate on a new car loan with a credit score of 650 is 7.25%, while the average interest rate on a used car loan is 9.81%. What is a good interest rate for a 72-month car loan? An interest rate below 4.07% for a new and 8.62% for a used car can be considered good for a 72-month car loan.

What is invoice price vs MSRP? ›

Invoice price (or dealer price) is the amount that the dealer paid the manufacturer for the car. MSRP is the “sticker price,” which is the amount that you will pay the dealership.

How do you negotiate a car phrase? ›

When negotiating, it helps to be able to justify what you're asking for, he adds: “Instead of saying, 'I want to pay this,' try something like: 'I've looked at five or six different cars that are similar to yours in the market. The price range goes from $19,500 to $20,700. I'm comfortable making an offer of $19,100. '

Should you negotiate price over text? ›

For most business negotiations, it's usually wise to begin with one or more face-to-face meetings. If connecting in person isn't possible, start with phone calls or videoconferences before adding texts and e-mails to the mix. Visual and vocal cues will enhance rapport and understanding right from the start.

How do I know the invoice price of a new car? ›

Other good resources include sites such as, or our own CarsDirect search page. Simply enter details such as the make, model and year, and cost and pricing information will be displayed. You will see the MSRP (the manufacturer's suggested retail price) and the car invoice price.


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