How to negotiate a new car price effectively

Negotiating the price of a new car might feel comical — like pitting an amateur against a team of professionals. But by setting the ground rules early, you can level the playing field.

Consumer Reports offers these tips.

• When you start, work from your positions of strength. Those include your opening bid, based on what the dealer paid for the vehicle or what you’ve established is a fair price, along with competing bids from other local dealerships or car-buying websites. Make sure you negotiate from the bottom-most price and work up, not down from the MSRP.

• Set the ground rules. Let the salesperson know that you have already taken a test-drive, you know exactly which trim level and options you want, you have researched the price for that configuration and you know approximately what the dealership paid for it.

• Down to brass tacks. Consumer Reports says to start the negotiations with your pre-calculated low offer. That could be the invoice price, minus incentives, plus, say, $100. If the salesperson asks you how you arrived at that figure, explain how you calculated it. What usually happens next is a back and forth while the salesperson submits your bids to the sales manager and returns with counteroffers. Be prepared for the offers to be far higher than your target price. And be prepared to wait

several minutes at each step.

As for financing, explain that you are preapproved for a loan and are prepared to pay in cash, but that you may be willing to consider financing through the dealership provided the offer is competitive.

• Hold your ground. A salesperson’s initial reaction might be dismissive, or he or she may even try to tell you that your numbers are wrong. If so, Consumer Reports recommends showing a printout of your sources of information. Remind the salesperson that you’re ready to complete the purchase on the spot if your price can be met. Otherwise, you’ll have to “think it over.” If the negotiations are going nowhere, this is the time to excuse yourself and get up to leave.

• Know when to walk. Head on to another dealer if the salesperson tries to convince you that the rebate (or low-cost financing) is available only to customers who pay the sticker price. This is not true. Rebates come directly from the manufacturer, regardless of the price you agree to at a dealership.

• Know when to say yes. If you are offered a price that’s in your target range, you should probably accept it and move on to trade-in and financing arrangements.

• Time to talk tradein. Only after you agree on a price for the new car should you turn your attention to the trade-in. If you shopped it around to other dealerships, you also know what you can easily get for it. Tell the salesperson that you simply want what you know it’s worth. Provide the figures to back this up, along with printouts from several pricing sources.