When you see the Manufacturer’s Suggested Retail Price (MSRP) on a vehicle’s window sticker, you should know that the price can be negotiated. You don’t have to settle on the number you see, and there are other aspects of the car-buying process that can be negotiated as well.
What Can be Negotiated
What can and can’t be negotiated when buying a vehicle is universal in the car-buying world. There are four things that can be negotiated when making a vehicle purchase:
- The Sticker Price: The number that’s printed on a car’s window sticker reflects the MSRP, or Manufacturer's Suggested Retail Price – and please note the word "suggested." Dealerships have the power to charge whatever they want for a particular vehicle, and this is especially true for used cars. You should understand that it’s more difficult to get a big discount on a vehicle that's heavily in demand than it is on a car that has been over-produced.
- Your Trade-in: To help you get the most for the vehicle you're trading in, make sure that it’s clean both inside and out (preferably detailed). It’s also helpful if you're able to provide the maintenance records in order to prove that it’s been well maintained. You should get an idea of what similar models are selling for in your area, and you can research this by using valuation sites such as NADAguides.
- Your Interest Rate: Your credit rating is essential when shopping for the best interest rate. Request copies of your credit reports (from all three major reporting bureaus) well in advance, and try getting pre-approved before going to a dealership, so you know how much negotiating power you have. Also, making a substantial down payment, close to 20 percent of the car’s selling price, may earn you a better interest rate.
- Extended Warranties, GAP Insurance, and Accessories: All add-ons are optional, and if you decide that you want one or more with your auto loan, you can also negotiate the price that you pay for these items. Also, remember that you don't have to purchase any of them at the dealership, since they're all available from outside sources.
Before you get ready to buy a vehicle, make sure you read up on our car buying negotiating tips, so you can approach the process with confidence.
What Can’t be Negotiated
Everything that comes with a price tag isn’t negotiable. The things listed above are managed by the dealer, so they're able to adjust prices. But there are items that are regulated by the state you live in that can’t be negotiated. The three things that can’t be negotiated are:
- Sales Tax
- Registration Fee
- Title Fee
Your state also sets the maximum amount a dealership can charge for a documentation fee, but you can negotiate a lower price for this service with the dealer.
It’s important you know what can and can’t be negotiated before heading to a dealership so you can budget accordingly. If you need help coming up with a car-buying budget, you can use our Car Loan Estimator and Auto Loan Monthly Payment calculators to get an estimate.
The Bottom Line
Negotiate with confidence by doing some research before heading to a dealer. It pays to be prepared, and you never know what kind of deal you can get. Unfortunately, if you have bad credit, you can’t just walk into any dealership and expect to get financed. You typically need to work with a subprime lender, and Auto Credit Express can help you get connected to one.
We work with a coast-to-coast network of special finance dealers that have the subprime lenders available to help you get financed. Getting started is a breeze, simply fill out our free and secure car loan request form, and we’ll get right to work connecting you to a dealership in your area.