Chime® is a financial technology company, not a bank. Banking services, credit, and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

How to Negotiate a Car Price? 5 Tips to Get the Best Price

Timothy Moore • May 24, 2024

person receiving car keys

Third-party brands and companies are mentioned for informational purposes only. Chime does not sponsor, endorse, or partner with any of these brands or companies, and they do not sponsor or endorse Chime.

Buying a new car can sometimes feel like stepping onto a battlefield, but instead of swords and shields, you must arm yourself with information, confidence, and negotiating tactics. If you’re new to the process or don’t like haggling with salespeople, it can be challenging to get the best price.

To help, we’ll walk you through how to negotiate a car price. Whether you’re a seasoned negotiator or a first-time car buyer, these tips, tricks, and strategies can help you snag your dream car at the best price.

Easy online banking

  • Checking Account with no monthly fees
  • 50,000+ fee-free ATMs~
  • Chime Visa® Debit Card
Get Started

1. Establish a budget

Before you even set foot in a car dealership, know exactly how much you can afford to spend on a new or used car. The average cost of a new car is currently more than $47,000¹, but it’s possible to find vehicles that are cheaper.¹

This isn’t just about the sticker price; you should consider the total cost of ownership. That includes:

  • The cost to buy the car, including taxes and titling fees
  • The cost of car maintenance
  • Monthly auto insurance premiums
  • Fuel prices

For instance, purchasing a luxury car doesn’t just mean you’ll make a larger monthly car payment; car insurance prices are typically higher for luxury models, too.²

Buying a large truck will cost you at the dealership and every time you fill up the gas tank, for example. Larger trucks tend to be less efficient than smaller passenger vehicles.

How budgeting can help

The solution to managing these various costs? Set a budget before you begin researching a vehicle to purchase. Drafting a comprehensive budget will prevent you from falling in love with a car that’s beyond your finances, whether it has a high sticker cost, high maintenance cost, or high fuel costs.

Your budget helps you filter out expensive options from the get-go and keeps you grounded when sales tactics try to sway you. Having a hard line can empower you to negotiate with confidence and clarity.

A monthly budget can also help you determine if it makes more sense to buy or lease a car.

Need help figuring out your car budget? Our auto loan calculator can help you get your numbers in place.

Better online banking
  • Checking Account with no monthly fees
  • 60,000+ fee-free ATMs*
  • Chime Visa® Debit Card
Open an Account

2. Do your research

Knowledge is power, especially at the car dealership. It’s essential to do several types of research before buying a car.

Research the new vehicle (and your current one)

Research the car model you are interested in. Dig into details like:

  • Dealer fees
  • Any available incentives
  • Local sales tax estimates

You should also calculate the trade-in value of your existing vehicle if you have one. Kelley Blue Book is a great resource for determining the value of your current car – with estimates for private sales and trading in at the dealership.

Research does more than prepare you for negotiation. It can help ensure you’re not caught off guard by hidden fees or flashy dealer incentives that might not be in your best interest. Plus, knowing the true market value of your trade-in can prevent you from accepting a lowball offer.

Research your credit score

Beyond researching the value of your current vehicle and fair prices for the new model you’re purchasing, you should also research your own credit score. Knowing your credit score will help you determine the type of interest rate you’ll likely be offered on a car loan. The higher your credit score, the lower the interest rate you’ll be offered in general.

Though it varies by lender, 661 or higher is generally considered a good credit score to buy a car.

3. Get financing preapproval early

Securing financing before stepping into a dealership gives you a significant advantage by streamlining the buying process and keeping you in line with your budget.

With preapproval, you’ll have a good idea of the loan terms you’ll be offered, including the interest rate and loan amount. This protects you from high-pressure dealership financing tactics that could end up costing you more.

Preapproval acts like a ceiling on your spending, keeping you from going overboard during negotiations. It also shows the dealer that you’re a serious buyer, which might motivate them to offer you a better deal to close the sale.

Most lenders do not do a hard credit check to prequalify you for an auto loan, so you can shop around with multiple lenders to find the best car loan option for your needs.

4. Negotiate confidently

When it’s time to talk numbers, the way you negotiate can make or break a deal. Here are a few dos and don’ts:

  • Do start negotiations on your terms. Consider making the initial offer rather than responding to the seller’s offer.
  • Don’t feel pressured to agree on extras like extended warranties or additional services you don’t need.
  • Do bring a trusted friend or family member experienced with negotiations and cars, especially if this is your first time.
  • Don’t let your emotions get the best of you; if you’re feeling flustered, excuse yourself and try another dealership.
  • Do consider visiting multiple dealerships to see where you can get the best offer – and use competing bids to get a lower price.
  • Don’t mention your trade-in until after you’ve agreed upon a price for the car you’re purchasing.
  • Do make it clear to the salesperson that you’ve done your homework and know exactly which model, trim, and features you want – and already know what a fair price is.

Another tactic is to negotiate remotely. Many dealerships now offer online or phone negotiation options, which can be less intimidating than face-to-face negotiations and may lead to a better deal.

5. Walk away if necessary

Your greatest leverage is the power to walk away. Don’t be afraid to walk away if a deal doesn’t feel right or negotiations reach a stalemate.

Sometimes, the dealership may call you back with a better offer. Even if they don’t, leaving the negotiating table empty-handed is still worth it if the alternative is an offer that’s not right for you.

Don’t give in to pressure to close a deal on the spot.

Knowledge is power when car shopping

Whether you’re researching how to buy a used car on a budget or are ready to splurge, knowing how to engage with a salesperson – and when to walk away – is just as important as knowing which car you want to purchase and how to get funding.

Once you’ve successfully purchased a car at a price that works for you, start working toward lowering your overall costs by paying off your car loan early.

Easy online banking

  • Checking Account with no monthly fees
  • 50,000+ fee-free ATMs~
  • Chime Visa® Debit Card
Get Started

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

By clicking on some of the links above, you will leave the Chime website and be directed to a third-party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third party websites, as Chime is not responsible for those third parties' privacy or security practices.

Third-party trademarks referenced for informational purposes only; no endorsements implied.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

¹ Information from Cox Automotive's "New-Vehicle Average Transaction Prices Drop to Lowest Level in nearly Two Years, According to Latest Kelley Blue Book Estimates" as of April 30, 2024:

² Information from Lemonade's "The Most Expensive Cars to Insure" as of April 30, 2024:

* Out-of-network ATM withdrawal and over the counter advance fees may apply.

~ Out-of-network ATM withdrawal and over the counter advance fees may apply.

Address: 101 California Street, Floor 5, San Francisco, CA 94111, United States.

No customer support available at HQ. Customer support details available on the website.

© 2013-2024 Chime Financial, Inc. All rights reserved.