Most people absolutely dread the thought of walking into a dealership to buy a new car.  Just the idea of having to sit down across a table from slick salesman to negotiate terms is enough to turn their stomachs upside down.

Car dealerships are notorious for their high pressure sales tactics and negotiation strategies that are designed to confuse consumers into thinking they’re getting an unbeatable deal when they’re really getting hosed.  But there are ways you can take some of that leverage away from the dealership so you can negotiate on even ground.

One simple way to boost your negotiating power is to show up prepared.  If you stroll into a dealer without doing your homework the sales staff will be fighting each other over who gets to rake you over the coals.  To walk in well-prepared you need to take some time and research the various models and options available, as well as the dealer invoice pricing which is the amount the dealer actually paid for the car.

Always insist on negotiating the price of the car before discussing your trade in or the terms of financing.  Dealers love to mix you up by combining everything.  That way they can play with the numbers like a game of three card monte until they catch you off guard.

Of course the best way to avoid that trick is to secure financing for your car before you ever walk into a dealership.   Trust me, you’ll get a kick out of the disappointment on the salesman’s face when you tell him you you’ve already secured a car loan and don’t need to discuss their financing options.  He’ll know his job just got a little tougher and that he’s dealing with someone who won’t just roll over and give him whatever he wants.

Where to Find a Car Loan

The best way to pay for a car is to pay cash.  But most people simply can’t afford to do that and have to take out a loan.  You don’t want to have to rely on dealer financing because that gives them an unfair advantage in negotiations, plus you can usually find better rates elsewhere if you shop around a little.

If you have access to a credit union, that’s a good place to start your search.  Most credit unions offer very competitive rates and excellent customer service.  If you’re not a member of a credit union check out your local banks.  Make sure you check out a few of them to see which one will offer the best rate.

Or you can always check out as many banks as you want right from the comfort of your own home.   There are plenty of websites that will let you compare rates from various lenders and apply right online.

Once you secure financing you can confidently walk into the dealer and show them that you mean business.  Of course, there’s always the possibility that the dealer will actually be able to beat the terms of the loan you already secured.  If that happens, it can’t hurt to consider signing up with them instead…after you’ve already finished negotiating the price of course.

Mike Collins

Mike Collins

Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at