How to Get the Best Deal on a New Car

For those of you looking to take advantage of this year’s tax deductions for buying a new car, Smart Money has a few tips to save you even more money. They list five suggestions for getting the best deal on a new car as follows:

1. Wait until December. Unless you’re in a rush to buy a car, you’re better off waiting until the last month of the year, when dealerships will try to unload their old inventory with new incentives.

2. Improve your credit score. To get approved for the most affordable car loan, borrowers will need a FICO credit score of at least 750

3. Don’t rely on used cars for value. We typically associate used cars with cheap prices, but many used cars for sale are appreciating in value.

4. Consider which models are gaining popularity. Buyers should keep in mind that as a particular model becomes more popular, dealers may have less motivation to offer competitive pricing.

5. Compare buying vs. leasing

We’ve heard that the time period between Thanksgiving and the end of the year is a virtual ghost town in car dealerships as consumers are too busy doing their holiday shopping to buy cars. Low traffic = great discounts for those of us needing/wanting/able to buy in this time period.

Combine all these tips with some tried and true ways to save when buying a car, the aforementioned tax incentives, and perhaps a discount for paying in cash, and you should be able to drive home a real bargain this year.

How to Get the Best Deal on a New Car [Smart Money]

FREE MONEY FINANCE (Photo: airgap)


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  1. rpm773 says:

    I would think that blurb about Thanksgiving thru Christmas as slow would be extra true this year, with so many sales being pulled forward by the cash for clunkers program from a few months ago. December might be a great time to score a good deal.

  2. AllanG54 says:

    The part about dealers trying to make room for new models is bull. Most of the new models are out already and none are introduced in January. This might have been true 20 years ago when all new cars came out in September and the dealers were trying to clear their lots in August but it doesn’t ring true now.

  3. godospoons says:

    I’m not sure why this is never on the advice list, but my tip is to *never* negotiate in person for a new car.

    If you know what year/model/color/options you want, I’ve found the best strategy is to take a list of all the dealers in the reasonable area around you, call them three days before the end of the month sequentially and run it as an auction in reverse, dropping them off the list as they refuse to go any lower. You’d be surprised how fast it turns into a bidding war, plus there’s no waiting for a “manager” to wander in and discuss the pricing.

    I also find not giving them your name and telephone number until you’re absolutely sure you’re going to buy from them also helps.

    • JollyRogargh says:

      But does the price change when you actually go in?

      For some reason I could see this strategy working up until you go to the dealer: “Yea, well, see.. that WAS the price we discussed over the phone but if you look in this box diagram I drew up for you…”

      I hate buyng cars from dealers >.<

    • pecan 3.14159265 says:

      @godospoons: That’s really if you have that kind of time. Some people do much better in face to face interactions because they can be much firmer when they see a salesman acting smarmy.

    • Saboth says:


      I’d go a step further. On my last 2 car purchases, I never talked to anyone about price, at all. Not on the phone, not in person. I emailed them back and forth. On my Hyundai, I found a place with the car I wanted, then found the same car a few hundred miles away for a lower price. I wrangled the first guy down a bit, then at the end of the negotiation, sprung the lower price of the other dealership on him. He then beat that price by about $200. Then I just showed up and signed the paperwork.

    • Rachacha says:

      @godospoons: Research on, and build up the vehicle you want with all of the options. Print out your virtual invoice (which has the sticker price, invoice price and “average price paid by consumers” price and bring to dealer.
      Select vehicle that meets your requirements and let the dealer make his first offer to you. Open up your folder with your research tell them the invoice is X and dealer holdback and bonuses are Y, therefore anything above Z (which will provide the dealer with a reasonable profit for his time) is No deal. When he goes back to the manager and comes back with his “best offer” if it is not in line with your desires, get up and walk out…you will have your deal before you hit the door.

    • b612markt says:

      @godospoons: That’s the strategy I employed, bundled it with a manufacturer’s instant rebate and got a new car for 6k off sticker.

    • TheObserver says:

      @godospoons: I agree, good advice as my coworker did something similar from prices on the internet.

      However in the end unfortunately, you still have to deal with the dealership you ultimately choose.

      Which means they’ll still try to squeeze and suck every last drop of blood out of you from extended warranties, rust protection, super duper clearcoat protectant cover, etc. etc. etc. The usual pressure tactics and if somehow you are strong enough to refuse all of them, you are treated like a criminal for it.

      All in all, the least stressful experience in terms of the buying experience is a used car from someone else that bypasses all this nonsense.

  4. Jaynor says:

    Consumer reports is a godsend in this. I bought my Matrix a few years ago. I armed myself with the consumer reports car report(you can buy one for $50 or something). It listed the invoice prices, all incentives… dealer “kickbacks” on my car and gave me a baseline price to work from (theoretically a “no profit” price for the dealership). This was many thousands of dollars under invoice on the car. I then selected which options I wanted and started calling (not visiting) area dealerships with the price in hand, telling them I’d buy from whichever dealership came closest to the no-profit line. I got mine for about $100 over that price (which I thought was fair) and for WAY under invoice. It was the only time I’ve ever bought a car and not felt like I’d been totally screwed over on the deal.

  5. jamar0303 says:

    Kind of a niche piece of advice, but some models of used cars are overvalued. Examples include the Toyota Corolla GT-S and the Datsun 240Z (both due to TV shows and movies).

  6. DirectMailFan says:

    I’ve followed these guidelines when buying my last 2 new cars:
    1. Find out the actual dealer invoice price, and then use it as your starting point to negotiate below it (or for options at little or no cost)
    2. Be prepared to buy near the end of the month-that’s quota time
    3. Stay cool & calm when dealing with the salesperson, and be ready to walk away if you don’t like the deal

    I got a moon roof & a nice stereo CD system in my ’97 Nissan (my first new car) at no cost, because it’s what they had on the lot, and I wouldn’t budge on paying for something I didn’t want.

    When I got my 2nd new car, it was the Friday before Labor Day 2005, when Katrina was hitting the Gulf Coast oil wells on its way into New Orleans. Gas prices were skyrocketing, and the Subaru dealership I visited was a ghost town. I wound up negotiating a price about $3,000 below the dealer invoice cost, not including my trade-in.

    • Rachacha says:

      @DirectMailFan: I am a finicky person with options. I love all of the bells and whistles (power everything, sun roof etc.), but I HATE leather seats, and the cloth seats are usually only available on lower end models. I had a dealer once offer to pull out the leather seats in a vehicle that had most of the options I wanted and pull the cloth seats out of another vehicle just to make the sale.

      I didn’t take him up on his offer as I did not want to have my new car stripped for its parts before I bought it, and found it was easier to order from the factory as I was in no immediate need for the vehicle. In 15 years, and 5 different car purchases, I have only once been able to buy a car right off the lot with exactly the options that I was looking for.

  7. Trulymadlyme says:


    After basically being told that dealers would not agree to my in person haggling, I used overstock pricing and called dealers and went with the one that was willing to match/beat the lowest price. It was funny considering the number of salespeople who called me for MONTHS

  8. Eyebrows McGee (now with double the baby!) says:

    When we negotiated on my husband’s car, I got up and left. I don’t like cars that much, and they were pissing me off by being smarmy and not coming down on price.

    I was mostly just tired and irritated and didn’t want the car badly enough to put up with their crap, but it read as “the wife who has to agree to this purchase is refusing, while it’s the husband who wants the car, so we have no leverage.” They came down in price real fast, and threw in some extras when it took them forEVER to run the paperwork and I started leaving again because I was bored.

    A lot of people know that you have to act like you’re willing to walk away, but I really AM walking away and I really am NOT remotely interested, because there is no car in the world worth that kind of annoyance or that fascinating to me. The level of panic that appears to engender is astonishing.

    • pecan 3.14159265 says:

      @Eyebrows McGee (now with more baby!): The opposite happened with us. I love cars, and I love zipping around the city. I don’t do it very much now (public transpo) but when we bought the car, I was at a job that I drove to. The first two dealerships we went ton kept looking at my husband as they spoke. I was like, “WTF!” and we left because not only were they rude and putting so much pressure on us, they wouldn’t even acknowledge our insistence that it was going to be my car, not his. It’s so aggravating!

    • Sudonum says:

      @Eyebrows McGee (now with more baby!):
      I bought a luxury car last summer. I left the dealership 3 times before they finally agreed on my price. The first time I went in around the 20th of the month. Walked out when they weren’t even close. They called me around the 25th, I went back in, still wouldn’t get real despite their assurances on the phone. Then they called me back on the 28th, went back in, they still tried to squeeze a couple extra bucks off of me. I walked out again. Finally they called on the 30th. I said I wasn’t coming in unless they faxed me the contract and everything was how I wanted it.

      It was somewhat ironic that we didn’t close the deal until a week later. We were paying cash and there was some problems with the wire transfer.

      And the only reason I kept going back was because the car was certified used and they were the only dealer who had the car with the features we wanted. Although I did find one similar 200 miles away that i was prepared to go buy as well.

    • MaytagRepairman says:

      Sadly I think they pull that act with many people. They hope one or both of you get tired and irritated and just hurry up and buy the car caving into what they want you to pay for it.

  9. Blueskylaw says:

    I personally enjoy new car shopping since my dad took me on all his car buying trips when I was little and he showed me all the tricks.

    Find out what the dealer paid, pick the options you want, give the dealer a $200 – $300 profit and stick with your price until you get what you want.

    Do not say you have a trade in until you have agreed upon the price of the car

    • Blueskylaw says:


      Tell them they absolutely cannot do a hard credit pull unless you will be test driving the car (they can even waive that if a salesman goes with you) or will be financing it with them.

      The last thing you need is a credit score ding from just shopping around.

    • bbagdan says:


      200-300 profit? I bet you don’t have your own business. 1000-3000 is more like it, jerk.

  10. redrn says:

    I recently bought a new toyota camry, i live in new england.Car max has the cheapest prices on new toyotas, since they sell so many. the closest car max w/ new toyotas is in Washington D.C. we printed out the invoice for carmax and started calling local dealerships. we told them the carmax price and asked how close they could come to the price-we told them that if they couldnt come close we would take the train down to DC and pick it up ourselves for the cheaper price. A bidding war began, via phone w/ the local dealers. they ended up matching car max price(including car max dealer fee-wich is a set fee and much cheaper. actually had to tell one salesperson to go online and see the set dealer fee). would do this again in a minute!

  11. eurofun4u says:

    I got my last 2010 forester for 19500 plus fees. I did an online quote to all the dealers and waited. Some told me to come down and told them if they do not send a quote they are wasting my time. One sales person/internet dude was really nice but nice did not do well while the other dealer gave me 400 bucks less. Also go online and put them against each other. Even forward them email from other dealers to see that you do not play around. Recently a friend wanted a Corolla 2010. The sticker was 17950 and I got it down to 15995 plus fees. There are also some dealer that will say anything to get you in. If you must go and see for yourself go but do not waste your time if you smell BS. Also never run your credit. Recently Kia Depot told my friend that she has to run the credit to take a look at who she is to see the pay off etc. I called that bs. When they run your credit they get the upper hand on how much you can afford and how much you are willing to spend. Also negotiate price on new car then trade in and then financing. And do not belive the dealer you can sell your car privately. YOu might but it will be a long time and if you have payments that will ding you good. And in most cases you owe more and non one will get into that. The end:-)

  12. PunditGuy says:

    This incredibly ugly but insanely useful site has saved me thousands of dollars over the years: [] There are too many tips to mention, but it includes everything that’s been discussed here and a lot more.

  13. Buckus says:

    Those five tips are incredibly worthless, almost to the point of pointlessness. How about carefully considering offers in the F&I office, or comparison shopping, blah blah blah. This is just common-sense stuff.

  14. lalaland13 says:

    Got my car last year on the day after Thanksgiving. I had to go in with my dad since there was no way I could afford a car on my own, and my dad is a hardass. But while we thought it wouldn’t be that crowded, they were actually quite busy. Maybe people took a long weekend to buy a car, I don’t know.

    I remember they were not too pleased that we didn’t want to finance anything and just wanted to pay straight up. Also had to sign a thing saying we would go into arbitration if we didn’t like something. That really caught my attention.

  15. Verucalise (Est.February2008) says:

    Load of crap on the FICO score. My credit is not great- 622 and my SO has a FICO of 700. We financed our new vehicle at 5.89% with our credit union.

  16. oldgraygeek says:

    Here’s one they missed: Request quotes over the Internet.

    Most dealerships have an “Internet sales manager” whose job is to quote you the lowest possible price, knowing you will be getting multiple prices from other dealerships.

    The best quote we got on our last new car — in writing — was “$500 over factory invoice on any in-stock or special-order of that model.” We found the exact car we wanted on their lot, figured out its “invoice” price on, and they sold it to us for $500 over invoice.

  17. barb95 says:

    I’ve never had problems buying cars. I actually enjoy it! : ) When I show up, I always know which car I want, and what price I want to pay. I tell them how much I have for a down payment and how much I want to pay per month. If they can’t fill my requirements, I just leave. I have only had to walk out once, and the dealers could not believe it. They called us everyday for a month!

  18. phildogger says:

    Want Five REAL tips from a former car salesman? Here you go…

    1) Don’t walk in to the showroom and announce “I’m paying cash!” This will NOT save you any money, and may even cost you. The dealership makes $$$ when you finance a car. Tell them you are financing, make your best deal, then tell them you changed your mind and want to pay cash.

    2) Do your homework before you arrive. Don’t walk into a Chevy dealership and want prices for an Equinnox, a Volt, and a Corvette. Know what car you want, know the trim package you want, etc. This will save you time in the long run.

    3) Want to know what your trade is really worth? Find the wholesale price in the NADA guide or online, and make sure you see the “Trade-in” price. No dealer in the world is going to give you retail on your trade. If you think they are low-balling you, sell it privately. If they offer to come up a little on your trade value, it is usally $$$ off the price of the car you are buying.

    4) Don’t jump up and run for the door after 5 minutes of negotiating. Give them a chance to get to your price. The margin on new cars isn’t anywhere near what it used to be. They are not going to sell you a car for zero profit unless they are dying to get rid of it. No one would stay in business if they did. Most new cars have between a 3-8% markup. Way less than any of the junk you buy at Target, but I never see people haggling over the price of a baby stroller (marked up about 200%, I would guess).

    5) Don’t treat your salesperson like the enemy. He is just as eager to sell the car as you are to buy. Mention to him that you have friends/family/co-workers also looking to buy soon. A good referral can bring in lots of $$$ to a dealership, and they will try to earn your business any way they can. Also, if you know what you want, tell them! “I’m just looking” is fine when you are starting your search, but when you have narrowed down your selection, tell them what you want, and how much you want to pay.

    Just use your head, folks. I once had someone get up and leave in huff over $100 difference between us and another dealer 60 miles away. What is your time really worth to you? I know I’m not going to waste 8 gallons of gas and 2 hours roundtrip to save $100. If it means that much to you to save $100, feel free. I was as low as I could go. She bought the car, (In a different color than she wanted), and then had about 3 repairs in the first 6 months. How much gas did that cost her, going back and forth? More than $100, I bet.

  19. JeffM says:

    750 credit score? Wow- I suppose that applies if you’re getting a loan at the dealer. But you can get external financing from some credit unions at < 5% with a score much lower than 750.

  20. Xerloq says:

    Other bits to add:

    1. Arrange your own financing BEFORE you go to the dealer.
    2. Don’t discuss trade in until you’ve negotiated the final price on the new car.
    3. ALWAYS talk about the “out the door” price, never payments.
    4. Buy an HP12C an learn how to use it. It freaks out sales guys when you pull one out in in the middle of a deal.
    5. If you finance with the dealer, look for the “cost per $1000 borrowed” on the 0% interest – that’s really the interest charge.
    6. WALK OUT. Seriously. If they ever don’t do anything you don’t like, leave.

    Finally, listen to Bill (at about 0:40)

  21. riroon says:

    Thanks for the tips.

    I sold cars at a Ford dealership for a portion of my existance, and I couldn’t agree more.

    I loved customers that wanted $4000 off a bottom-feeder Escort, or wanted me to match the price of a Mitsu econo-box with a mustang on the lot.

    Arming yourself with knowledge is also the best way NOT to get laughed out of the showroom.

  22. drewg says:

    The best way to get a good deal on a new car is to

    1) Pay cash. If you don’t have the money saved up, then buy a used car for the cash you have saved up. Put they money you would have spent on a car payment into a car fund and save for the new car.

    2) Don’t “fall in love” with a particular car. Always be willing to walk out.

    3) Come to the dealership with a cashier’s check made out to them for the amount that you’re willing to pay for a car “out the door”. Then make the dealer work backwards to get to the amount on the check. That avoids all the nickel and diming they try to do with “prep fees” and sneaking in floor mats, etc. The knowledge that if they can close a deal and get their commission makes them work that much more willing to take your deal.

    Just remember that car dealerships are the scum of the earth and treat them accordingly..

  23. vdragonmpc says:


    Good points and I stand by them:

    I went to West Broad Mitsubishi when my wife was pregnant. I had a wild impulse to buy a family car with good mpg and had some sport to it. We had rented a Mitsubishi and I liked the way it drove and handled. At the dealer I made a few offers and all were rebuffed. The 2 cars I liked were almost a year old on the lot. They had new models arriving and they looked basically the same. I left.

    Fast Forward a week and I go to another dealer with my VERY visually pregnant wife and we get treated to the full dealership ‘experience’. They hemmed and hawed over every little thing and we finally invited them to keep the jewel of the dealership as they loved it more than us.

    About a month later I start getting almost nightly calls from them. It seems my offer is ready and they are willing to sell at the price I offered. Sadly Nissan was willing to sell me a car and I told them I have a 2 trip to the sales manager max when Im buying a car. I also will not spend 2-3 hours waiting for ‘paperwork’. Even better there is no longer a ‘West Broad Mitsubishi’ they lost the franchise and its just a Hyundai dealer now.

    A telling sign of a failing dealer is 1-2 year old models sold as new on the lot. If they get to the second model year on the lot and wont come down on the price they have major issues.

  24. nstonep says:

    Best advice: Don’t buy a demo…ever.

    2nd best advice: Pop the hood and see if there’s a shroud…if there’s an engine shroud the mfg will make it a p.i.t.a. for you to do even simple maintenance on the car (that’s almost guaranteed).

    3rd best advice: Don’t buy a truck unless “hauling” things is a requirement for your job.

    4th best advice: Don’t buy a dark car (specifically black)…especially if you like to wash your car yourself.

    5th best advice: Never buy a VW if you intend on keeping it more than 4 years; lease it if you want one. Never buy a kia.

    Super mega advice: Don’t buy an introduction year model there’s likely to be kinks they haven’t worked out (especially with the pcm)

  25. bbagdan says:

    I used to sell Mercedes. The best time to buy cars is the last week of December. Dealerships will sell for thousands below cost to make quota. Period.

    Make your offer 5% below cost (14% below full sticker for new vehicles) on December 26. When they refuse, politely walk out but leave your phone number. Expect a call on December 31 accepting your offer.

    Salespeople expect you to negotiate. If you don’t, we make fun of you behind your back.

  26. joemama321 says:

    To save yourself a couple rounds of negotiations, you can also find that “no-profit price”, figure out how much over it you are willing to go, then call dealers stating: “XYZ Dealer 100 miles away is offering me this car for $W. I’d rather give the business to someone local. Can you meet or beat the price?”

    The time saver is never actually getting a price from XYZ, which allows you to set the starting point.