How to get the best price on a new car
Buying a new car? These tips will ensure you don't pay more than you need.
Key Takeaways
- Focus on the total cost of ownership, not just the monthly payment. Factor in depreciation, fuel, maintenance, and insurance over five years using tools like Kelley Blue Book or Edmunds to understand what a new car will truly cost you.
- Shop for financing before visiting a dealership — compare rates from banks and credit unions in advance, since dealers typically finance through banks at a markup, giving you leverage to negotiate better terms.
- Research your target price using Kelley Blue Book, the National Automobile Dealers Association (NADA), or Edmunds before negotiating — knowing the fair market value for your area gives you data to push back if a dealer quotes higher.
Keep your eye on the bottom
line
Consider the monthly payment but also how much your new
car will cost you over five years. Overall costs include depreciation,
fuel, maintenance, and insurance. Several websites, including Kelly Blue Book and Edmunds will help you calculateit. It's also a good idea to get a few car insurance quotes to get the
best rate. At Liberty Mutual, we customize your car insurance so you only
pay for what you need and nothing you don't.
Shop around
for financing
Before you walk into a dealership to buy a new
car, do your homework. See what kind of rates banks and credit unions are
offering so you can compare financing plans from dealers. Keep in mind,
dealers are still financing through a bank but usually at a markup (it's
how they make money).
Know your target
price
To negotiate a fair price, first you need to know what
that is. Start researching on websites and apps like Kelley Blue Book,
National Automobile Dealers
Association, or Edmunds to determine how much the car you want is
selling for in your area. If the dealer quotes a number higher than what
you've researched, show them what you found and ask them to match it.
Get the most for your trade-in
You can research the trade-in value of your old car on sites like Edmunds and Kelley Blue Book or get a written appraisal from a dealership like CarMax. Then shop your trade-in around to multiple dealers to see which will give you the most. Just remember that the first offer most dealers give for a trade-in is typically low, so be willing to walk away.
Negotiate, negotiate, negotiate
Other costs can include feature packages, taxes, and a variety of fees. Some are negotiable, so examine your bill of sale carefully. Also, make sure you're not getting charged for options you don't need. Custom fog lights for $800? Maybe not for you. Perhaps the biggest negotiating tool you have in your arsenal is knowing when to walk away. Don't forget: you have all the leverage!
Written by Kathryn Messer
Kathryn Messer is an insurance and financial services copywriter with more than 25 years of hands on industry experience. A fully licensed P&C and Life & Health broker, she has worked as an independent agency owner, commercial risk manager, and financial and investment adviser. She holds CIC, CPCU, CFP, and LUTC designations. Her writing is grounded in real world knowledge of insurance operations, regulatory complexity, P&C claims, insurance technology, and sales—giving clients a true subject matter expert with no learning curve.