When 29-year-old Cecilia Paredes decided to buy a 2018 Mini Cooper with cool black rims, she knew she’d be facing a professional negotiator — the car salesman. So Paredes, who works in the theses and dissertation office at California State University, Long Beach, brought her uncle along as her wingman.
“I’m young, I look young and I’m a girl,” she says. “I was afraid they might try to take advantage of me.”
Paredes isn’t alone. According to a recent survey commissioned by Cars.com, 1 in 4 millennial car buyers (in this case, ages 18-34) don’t feel comfortable negotiating and would prefer to have their parents help make the deal. But millennials have a secret weapon that forms a strong foundation for effective negotiating strategies: a penchant for online research.
Even with the added transparency the internet provides, “negotiating is still very important in car buying,” says Greg Kopf, a brand ambassador for online auto parts retailer CarID. He’s himself a millennial who’s worked as a dealership service advisor.
Here is a roadmap for millennials — or anyone new to car-buying — to connect the cold world of data with the human dance of negotiation, whether or not they bring mom or dad along for the ride.
1. Budget first
Younger car buyers should understand how the monthly payments will fit into their budgets. Before heading to the dealership, Paredes used an online auto loan calculator to estimate monthly payments and printed out the results. She then used her “cheat sheet” to check the numbers given to her at the dealership.
Understand that your total car costs will be more than your monthly car payment. And don’t lose sight of the total car price by focusing only on the monthly payment.
2. Get preapproved
On the lot, a salesperson might not take a millennial car buyer seriously. To show that she meant business, Paredes first applied for a loan through a credit union. This loan offer gave her an interest rate she could use as leverage at the dealership.
With a preapproved auto loan offer, you’ll not only know how much you can afford to spend, but you can negotiate as a cash buyer. And you can probably get the dealer to beat your rate.
3. Be price savvy
Kopf says knowing the current market value of a car is the best starting point for negotiating. He recommends checking online pricing guides to find the average transaction cost for the car you want to buy. This allows a young car buyer, who might lack confidence, to depersonalize the negotiation by pointing to a neutral source.
4. Shop around
“Find the dealership that wants to earn your business — don’t just buy the first car you see,” Kopf says. In Paredes’ case, she found a similar car for sale at a nearby dealership and used its special advertised pricing as leverage in her negotiation. She felt it showed the salesperson she wasn’t going to accept any price he threw out.
5. Know the history
If you’re buying a used car, getting a reliable vehicle history report is well worth the small fee, Kopf says. Any negatives on the report — a minor accident or multiple owners — could be used as a bargaining chip in negotiations. CarFax and AutoCheck both provide individual reports or short-term deals for multiple reports.
6. Stay alert
At the dealership, the sales team uses numerous negotiating strategies to wear down buyers. They may draw out the process, making you wait longer than necessary, or play good cop, bad cop, passing you from the salesperson to a closer and finally the finance manager.
Paredes and her uncle were able to turn the tables, taking turns negotiating. Her uncle called the finance manager on several items he tried to slide past them. And Paredes firmly refused the base models they kept trying to push. Instead she got the exact model she wanted — yes, the one with the black rims.
Even if you go alone, you’ll probably face similar tactics. Pace yourself, don’t drop your guard and be ready to push back.
7. Take your time closing the deal
Inexperienced car buyers might think they’re done negotiating once they’ve settled on a price with the salesperson. Instead, they’re handed off to a more formal finance manager.
“They don’t know it’s coming until they sit in that office and the guy is throwing all different types of warranties and services at you,” Kopf says. “And that’s after you already spent four hours there and you just want to leave.”
His advice: “Take your time.” You don’t have to make a decision about those products right then.
Reflecting on her experience, Paredes says she wishes there was an easier way to buy a car. But she adds: “I look at my car and think what a good decision I made.”