The average new car buyer can realistically negotiate a discount of 5% to 10% off the Manufacturer's Suggested Retail Price (MSRP). However, the final amount you can haggle depends heavily on the vehicle's popularity, market supply, and the dealership's current incentives. For high-demand models, you might pay MSRP or even above, while on slow-selling vehicles, discounts can exceed 10%.
The key to successful haggling is knowing the dealer's true cost, which is the invoice price. While not the absolute bottom line, it's a critical starting point. Dealers also receive hidden incentives from manufacturers, like holdback (typically 2-3% of MSRP), which is a rebate paid after the sale, giving them more negotiating room than the invoice price suggests.
Factors Influencing Your Negotiating Power
| Factor | Strong Negotiating Power (High Discounts) | Weak Negotiating Power (Low/No Discounts) |
|---|
| Vehicle Demand | Slow-selling models, end-of-model-year clearance | Newly redesigned, highly popular (e.g., hybrids, certain trucks) |
| Time of Month/Year | End of month, end of quarter, holiday weekends | Beginning of the month, launch season |
| Inventory Levels | High dealer stock (200+ days supply) | Low dealer stock (under 30 days supply) |
| Your Preparation | Have pre-approved financing, know invoice price, ready to walk away | Unprepared, emotionally attached to the car |
Start by researching the fair market value online using resources like Kelley Blue Book (KBB) or Edmunds. Then, negotiate the out-the-door price, which includes all taxes and fees, to avoid surprises. Your strongest tactic is being willing to leave the dealership if the deal isn't right. This demonstrates you're a serious, informed buyer, not an easy target.
