In the vehicle business, the manufacturer’s suggested retail price – better known as the MSRP (and even better known by the older phrase “sticker price”) – is the price for which a manufacturer suggests a retailer should sell a vehicle.

However, just because that’s the suggested price – and just because the car dealer might have it plastered on the windshield (or more subtly posted on the spec sheet attached to a side window) – doesn’t mean it’s the price you have to pay.

Tips for Negotiating Lower Car Prices

It’s possible to get a car dealer to negotiate the price of a used car or a new car, though new cars are typically the vehicles potential buyers want to haggle over.

Do Your Research and Pick a Price

During a car sale, understanding these price-related matters will help you estimate a price you think is fair and you're comfortable paying:

• The dealer invoice. This shows how much the dealer paid for the vehicle. You can get a ballpark figure just from researching online, but you can also ask the dealer to see the invoice.
• The destination fee. This is how much the manufacturer charged to have the car shipped to the dealership, and should be included on the MSRP.
• Cash incentives the dealer receives from the manufacturer for selling that particular model.
• The dealer holdback, which is a percentage of the MSRP the manufacturer sometimes reimburses the dealer.

Choose the Right Day – and Time

First, know that typically dealerships are at their busiest during the weekends; it makes sense, given that’s when most people are off work.

Second, remind yourself that buying a car isn’t like buying dinner. Unless you have a pretty fat bank account and aren’t opposed to spending money you might not actually have to spend, you can’t just show up, point to what you want, ask for a few personal tweaks, and have the keys in your hand in 15 minutes.

Buying a car usually takes a couple of hours. Sometimes it even takes days.

If you can swing it, choose a weekday and show up in the morning or early afternoon. Your salesman won’t be swamped and you’ll both have plenty of time to negotiate the details.

Be Confident and Honest

Most people think car buying requires a suit of armor and a poker face; in reality, all it requires is confidence and honesty. Once a dialogue is established, let the car dealer know what you want, what you’re able to pay, and that you’re not going to budge. (This is the time to throw in your research.)

After all, it’s your money.

A car dealer will try to get what he can out of you, but if you’re honest about what your budget will allow, he’ll get the picture. You’ll either get the vehicle at the price (or close to the price) you want, or you’ll know it’s time to look elsewhere.

Shop and Tell

Before you can even turn off your old car’s ignition, the car dealer becomes your best friend. He wants to know all about you – your job, your hobbies, how you’re enjoying the weather – and he offers you coffee and tea and water and snacks while you tell your stories. He’ll walk you around the lot, and might tell you a few stories about his new wife or his new baby. He might even talk about last Friday night’s football game; the two of you might discover your sons play on the same team.

Yet, he’s a jealous best friend – mostly because he has to put food on the table, too – and if he finds out you’ve been seeing other dealers, you can bet he will step up his game.

In short, don’t be afraid to gracefully play dealers off one another.

Stand Your Ground

If you’ve done all you can do and the car dealer still isn’t coming down, walk away – especially if your budget won’t allow for the price the dealer is pushing.

It’s that simple.