What things can I negotiate when shopping for a car or auto loan? | Consumer Financial Protection Bureau (2024)

FAQs

What things can I negotiate when shopping for a car or auto loan? | Consumer Financial Protection Bureau? ›

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. If a car is in high demand, a dealership can charge far more than the sticker price. When demand is lower, you can expect to pay less than the sticker price.

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. If a car is in high demand, a dealership can charge far more than the sticker price. When demand is lower, you can expect to pay less than the sticker price.

What Is the Interest Rate on the Loan? This is the first question that most people ask about a new car loan. While it's also one of the most important, the terms of the interest rate are sometimes more crucial than the auto loan rate itself.

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. '”

However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb. Regardless of if you're buying a Kia or a Mercedes, the reality is there isn't too much room to work with when just looking at the mark up. This is where factory incentives come into play.

Know Your Budget

The first step in buying a car is to set a budget. This will help you narrow your focus to cars within your price range before you fall in love with one that'll break the bank. To create a budget, start by adding up all your monthly income and all your monthly expenses.

Are dealerships willing to negotiate? ›

The short answer: yes but it depends. You have to know how to negotiate used car prices, know what to research and understand exactly how much the listed price is negotiable. There are a multitude of other considerations as well. You have to find out: Does the dealership have a non-negotiable, one-low-price policy?

To negotiate a car loan, start by checking your credit score and getting clear on how much car you can afford. Then, research auto loans and interest rates and get preapproved. Last, leverage your preapproval by asking lenders if they can beat its terms.

Before finalizing your purchase, ask the dealer about any available incentives or rebates. These could include manufacturer discounts, loyalty bonuses, or special financing offers. Taking advantage of these incentives can lower the overall cost of the car and improve your negotiating position.

But when a person pays cash for a car, there is no such incentive for the dealership. It's not going to make money from financing and will be less likely to want to give a discount since it doesn't want to lose money on the deal.

What can you negotiate when you factory order a vehicle? It's simple, all the same things you would negotiate when you purchase a car off the lot. Remember, if it's taxable, it's negotiable! Negotiate on taxable fees (doc fees, processing fees, etc.), and on the vehicle's selling price.