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How to Negotiate Car Price

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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A car is only worth what someone is willing to pay for it. So it’s usually a salesperson’s job to convince you it’s worth a lot. Many Americans hate bargaining and rarely do it. So when faced with negotiating a major purchase with someone who negotiates as their job, it can be daunting.

We give you advice in negotiating car prices, tricks for the shy — or bold — and different tactics to try depending on what type of car you’re buying, new or used.

Car price negotiating tips for everyone

The first part of successful negotiation is doing your homework — looking up car values and doing some online price shopping. It’s an unpopular step. It doesn’t have the same feeling many people associate with negotiation: fast talking, slicked hair, Cuban cigars. But it’s definitely the starting point for a successful car search.

Look up the current values
No matter how you plan to get your car, whether you want to buy your car completely online with as little human interaction as possible or stride onto the car lot with your cowboy hat on, ready to duke it out, you should know what to fight for other than the vague idea of “cheaper price.”

A safe bet is to use what the lenders use to find the value of vehicles. Lenders price vehicles based on industry guides such as Kelley Blue Book (KBB) or via the National Automobile Dealers Association (NADA). Both are entirely free to use online. Once you narrow your choices to a couple of cars or the car, look up what it’s worth. That’s the fair market value, and you should aim for that or lower.

New cars will have a guide value and a manufacturer’s suggested retail price (MSRP). The two should be similar, but you could make the case you deserve to pay the lower price. See below for more on how to negotiate a new car price.

Shop virtually before shopping in person
Visit a few dealership websites or online marketplaces to see what’s out there. There are several auto-buying websites and phone apps such as Edmunds and VIN check by iSeeCars that will tell you how a car’s sticker price compares with its market value. You can also see how similar cars are priced in your area thanks to mapping features, which may be easier to navigate rather than clicking through search filters and numerous pages for each dealership.

If you find that a car you want is priced more cheaply in the next town, call your local dealership, tell them the other guy is selling that car for the lower price and ask them to beat it. And, if you want, you could repeat this call-and-price process several times to see how low you can get the price.

Be aware that many dealerships will do their best to get your personal information. It’s relatively safe to give your name and email, but we don’t recommend you provide your address or phone number unless you want them calling you back often. Tell them you’re shopping around and you need them to convince you by giving their best price before you go in or provide any personal information.

Do not focus on monthly payments
This is the most common and most costly mistake car buyers make. Focusing on monthly payments makes it easier for the dealership to keep the car price high and slip other things into your payment. Thinking about things on a monthly basis prevents you from seeing the total cost.

A common trick is for the salesperson to use a negotiation worksheet called the “four square.” On this four square, they may address everything with you but the car price. Instead of writing price negotiations in one of the four boxes, a salesperson might write reasons why the price is set, such as “newest model” and “moonroof.” Don’t let them get away with this. It’s feasible that anyone could sell you anything at any price and still meet your monthly payment requirement — they just make the loan longer. If you get a good price on the car, the monthly payment will follow.

After you decide on the price, when you do get to talking about monthly payment, ask what the monthly payment includes. It should only include the car, taxes, title and license fees, the APR and negative equity from a trade-in, if applicable. It should not include warranty, Guaranteed Auto Protection (GAP) insurance or anything else.

If it does include something else, ask what the charges are and their total prices, not their monthly prices. A warranty may cost $30 a month, which may not sound like a lot, but over your entire loan it can add up to more than $2,000. If you don’t want it, say so.

Always keep your eye on the APR
The dealership cannot change your APR based on whether you buy a warranty or any other add-ons. The best way to prevent them from increasing your APR period is to get preapproved loan offers from other lenders before you go to the dealership to shop for cars. This way you already have loan options and you know what APR you deserve. You can read more on getting an auto loan preapproval here.

Go with a friend
For the bold and the shy alike, going to negotiate car prices with a friend or family member can be a huge help. Having someone to talk to while the salesperson runs to check prices with a manager will give you something to do besides twiddle your thumbs and wonder silently what’s taking so long. An extra set of eyes may see something you don’t.

Be aware that whoever goes with you will probably get a window of insight into your finances. If privacy matters to you, don’t take a friend who won’t respect it. Let your friend know ahead of time if you don’t want them to share any of your information they may learn during the process.

Try to time it right
Sometimes when you need a new car, you need it right away. Other times, you may have the luxury of being able to plan out when to get another vehicle. If you have that luxury, here are the times when you’re more likely to negotiate a better deal.

  • On a weekday. There is less business at a dealership during the workday. Things won’t be as busy, meaning the salesperson is less likely to pressure you to hurry up and buy the car so they can move on to the next customer.
  • The end of the month. Most dealerships have monthly sales goals. If you go at the end of the month, they might be really pushing to hit that number and thus be willing to cut a better deal for you than they would be at the beginning of the month.
  • The end of the year. With new car models coming in, dealerships want to clear out the older models. These older models are still new cars; they’re simply no longer the hottest thing on the market and are priced accordingly. Especially in December, dealers may be willing to sell them at a loss because these cars are only getting older, taking up space and decreasing in value.

Walk away
While it can be annoying to spend hours at one dealership, not come to an agreement and walk away feeling like you wasted your time, you should be willing to walk away. Otherwise, you might waste a whole lot more time in the form of working a ton of hours to pay off an overpriced car.

Car price negotiating tips for the more timid

No matter how much the salesperson smiles at you, remember: Buying a car and getting a loan is all business, and you need to do what’s best for you.

Call ahead to set an appointment
You can call the dealership ahead of time and request an appointment. Some dealerships will even let you request the type of person you’d like to have as your salesperson. You could specifically say you would like to work with a person who is not pushy. And if you do get a pushy salesperson, ask for another or go to another dealership — you are not tied to a salesperson or a dealership.

Another benefit of an appointment is to request ahead of time the specific car or cars you’d like to see. This way, you won’t have to wait for an available salesperson if the dealership is busy. You can breeze past any salespeople that may be waiting by the door, and the cars you want to see may be lined up and waiting for you. It could make things more efficient, putting less pressure on you.

Take printouts or screenshots
Printouts can be useful as a tangible reference. Screenshots also make things easy to access (rather than searching and finding something online again). Both put prices in black and white. And, this way, if the salesperson asks, “Are you sure that’s what you saw?” you can say yes and show them.

Break up the process
You do not have to do everything in one day. Even if the salesperson tells you the car you like might be sold tomorrow, there are thousands of cars out there and it’s probably better to wait and choose another car rather than make a choice under pressure that’s not right for you.

Test-drive a couple of cars and then take lunch to talk about the vehicles with a friend. Or sleep on your options for a night and go back the next day or the day after that. As a general warning, do not wait weeks on end as the car is more likely to sell and any sales specials are likely to change. If you do find yourself putting off the purchase for that long, then it may not be the right vehicle or the right time for you to buy.

Car price negotiating tips for the more aggressive

If you like negotiating and you smile at the thought of playing hardball, here’s how you could negotiate car price.

Make a low offer
In most negotiations, you end up meeting somewhere in the middle. So “the middle” might be lower if you start very low. Don’t worry about insulting the salesperson by making a low offer. Once you name a price as the buyer, that price usually only goes up, not down.

If you ultimately want to pay no more than $17,000 for a car that’s priced at $20,000, don’t offer $17,000 off the bat. Offer $11,000 and see what they do. After a couple of rounds of “this price,” “no, this price,” they might end up saying yes to a lower price than what you aimed for.

But don’t expect the dealer to sell you a $20,000 car for $11,000. Just as you have many other dealerships as potential sellers, they have many other customers as potential buyers. If you are completely unreasonable, you won’t have to threaten to get up and walk away because the dealership will invite you to leave. Again, if you’re armed with a car’s current value from an industry guide such as KBB or NADA, you will be able, at the very least, to aim a bit below that price.

Negotiate with two dealers at once
An aggressive car negotiating tactic you might use is to be at one dealership talking with a salesperson while having another dealership on the phone. Doing this, you can play the two dealers off each other and get immediate answers. If you put the caller on speaker, Dealer A will be able to hear Dealer B give you a price and will likely feel compelled to beat it.

How to negotiate car price for new cars

The MSRP is the standard price on new cars. It’s the number you may hear in radio car ads: “Krazy Kevin is selling all new cars for $100 below MSRP!”

MSPR is not what the dealer paid for the car. The invoice price is what the dealer paid for the car and even then there is a “holdback” in the invoice if you know where to look. The holdback is a reserve profit, so a dealer could sell a vehicle at invoice and still make money. Contrary to what they would have you believe, dealers will not need to eat their shirt if they sell a car to you at a price under invoice, although a salesperson might have to eat their pride.

  • If a salesperson tells you the car is below MSRP and that it’s such a good deal, ask what the holdback is and ask to see the invoice.
  • If the car is in demand and priced above MSRP, then use some of the negotiating tactics in the “For everyone” section.

In both cases, look up the rebates on the vehicle, which could bring the price down even more. And for information on the specifics of what’s negotiable and what’s not when buying a new car, check out this story on dealer fees from LendingTree.

How to negotiate car price for used cars

A used car doesn’t have an MSRP. It also won’t have rebates (which come from the manufacturer) because the manufacturer isn’t selling the used car — the current owner is. But there are still ways to figure out the fair value and to get a deal whether you buy a used car from a dealer or a private seller.

Determining a used car’s price
To know what a fair market price is on a used car, consult industry guides such as KBB and NADA. (See the above section on looking up current values.) Sellers will sometimes say they bought the car for more than its current value, but that’s not your problem. Just because they overpaid for the car doesn’t mean you need to overpay for the car.

Of course, the guides are just that: guides. They assume the car is in “good” condition, but the car may be in worse condition. Look for any signs of damage, rust or excess wear and tear on engine belts or upholstery that you could point out to make the case that the car is not in “good” condition. It would be labeled in “fair” condition and thus worth less than the posted price and the guide price.

When you are ready to finance your used car, check out our story on the six best used car auto loans and definitely research financing before you go to a dealership — here’s why.

At a dealership
Used cars are usually the most profitable type of car at a dealership because dealers can buy them for cheaper than market value and sell them for over market value. The best way to avoid paying the inflated price is to know the market value. Use KBB or NADA and ask for a free copy of the vehicle history report to see if the car was in an accident, a factor that might be cause for a lower price.

Also be aware the dealer will try to sell you an extended warranty on the used car as it’s another big way the dealer can make money. Odds are, you won’t need it. But if you’re interested, you can check out LendingTree’s ultimate car warranty guide.

The dealer will also try to make money off your auto loan. No matter where you apply for an auto loan — at your bank, credit union or online lender — apply directly through them, not the dealership. If you apply to your bank through a dealership, the dealership may be able to raise the APR above what the bank charges. Applying to your bank cuts out the middleman. When you get to the dealership, you can still apply through the dealer to see if they can beat that rate. But if you don’t have a loan offer that you got directly from a lender, you might be convinced to pay an inflated rate because you wouldn’t know what APR you deserve. A good way to potentially see several APRs you deserve is to fill out an online form at LendingTree, which cuts out the dealer as the middleman.

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From a private seller
Private sellers may find it difficult to sell their cars because they probably don’t have experience selling or access to a deep pool of potential customers. Plus, time spent selling might mean time off work to meet would-be buyers. Because of these things, you can almost always get a car from a private seller for less than you could from a dealership.

Again, use a KBB or NADA guide, but with the setting on “buying from a private seller,” not “buying from a dealer,” as the value will be lower. If you’re serious about the car, consider getting a vehicle history report or having your mechanic inspect it before you make an offer. If you find anything, such as a history of accidents or major repair needed, use that as a reason to lower your offer.

And if the person seems reluctant to sell for the price you want, mention you have the money or the offer ready now. If they don’t take it, they’ll have to wait and repeat the process. List everything they may have to do: post another ad and wait until someone else expresses interest; arrange a meeting time and test drive; and allow time for an independent inspection and negotiation, all the while missing work and (another) family dinner. But you’re offering them the money now.

The bottom line when negotiating car price

A car is typically one of the most expensive purchases a person makes in their lifetime. Be aware that a vehicle is a tool, not an investment, in most cases. Unless it’s an expensive classic car that will only appreciate in value with age, your car isn’t going to be paying you back. So if you can’t negotiate an affordable price on a certain vehicle, look for a less expensive one and try again.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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Navy Federal Credit Union Auto Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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If you are shopping for an auto loan, it’s helpful to get quotes from multiple lenders to ensure you receive the lowest possible interest rate and most favorable terms. For members of the military and their families, Navy Federal Credit Union could be an option.

Here’s what we found out about Navy Federal Credit Union and its auto loans.

About Navy Federal Credit Union

Navy Federal Credit Union, which was founded in 1933 and is headquartered in Vienna, Va., serves the military community. Its “once a member, always a member” policy means that you can continue to use the credit union if you or your family member leaves the military.

The following groups are eligible for membership:

  • Active-duty members of the Air Force, Air National Guard, Army, Coast Guard, Marine Corps and Navy
  • Delayed Entry Program (DEP) enlistees
  • Department of Defense officer candidates/ROTC participants
  • Department of Defense reservists
  • Veterans, retirees and annuitants

Parents, grandparents, spouses, siblings, children and grandchildren in a military family are also eligible, as are household members. Department of Defense civilian employees can become members, too.

Consumer Financial Protection Bureau action against credit union

It’s important to note that in 2016 the credit union was ordered by the Consumer Financial Protection Bureau, or CFPB, to pay $28.5 million after an investigation found that, among other things, it was improperly restricting account access for members with delinquent loans. The CFPB accused the credit union of making false threats of legal action and wage garnishment, threatening to contact delinquent members’ commanding officers and lying about the consequences of falling behind on loan payments. Of that total, $23 million would go to victims who received threatening letters. The credit union was required to correct its debt collection practices.

Navy Federal Credit Union: At a glance

When shopping for an auto loan, it’s crucial to get several quotes, no matter your credit score. If you have an array of loan options, you’ll have more negotiating power with a dealership.

APRs

APRs for Navy Federal Credit Union auto loans, which are based on creditworthiness, currently start at 2.99%.

Here’s a breakdown of APRs based on the type of vehicle:

  • New vehicles: 2.99% to 6.29% for loan terms between up to 36 months and 96 months
  • Late-model used vehicles: 3.29%* to 4.79%* for loan terms between up to 36 months and 72 months
  • Used vehicles: 4.99% to 6.29% for loan terms between up to 36 months and 72 months

Used vehicles older than 20 years are paid back at a collateral loan APR, which can be between 8.09%* and 8.9%* for loan terms between up to 60 months and 180 months. Preapproval isn’t available for this type of loan.

Your rate could be higher, depending on your credit profile and the value of the vehicle.

Active-duty and retired military members may be eligible for an additional discount with direct deposit to a Navy Federal Credit Union account. To get the discount, call or visit the credit union.

Vehicle requirements

Navy Federal Credit Union has specific vehicle requirements for its auto loans. For new vehicles, the minimum loan amount is $30,000 if seeking a term of 85 to 96 months. Used vehicles are 2017 models or older, or any model year with more than 30,000 miles. Late-model used vehicles can be model years 2018 to 2020 with 7,500 to 30,000 miles.

Boat, motorcycle and RV loans

The credit union also offers new and used boat, motorcycle and recreational vehicle (RV) loans. These loans only apply to recreational vehicles, so full-time RVs aren’t eligible. Here’s a breakdown of APRs based on the type of vehicle:

  • New boats: 6.05%* to 8.75%* for loan terms between up to 36 months and 180 months
  • Used boats: 8.05%* to 9.2%* for loan terms between up to 36 months and 180 months
  • New motorcycles: 7.25%* to 8.6%* for loan terms between up to 36 months and 84 months
  • Used motorcycles: 8.09%* to 9.35%* for loan terms between up to 36 months and 72 months
  • RVs (collateral loans): 8.09%* to 8.9%* for loan terms between up to 60 months and 180 months

These rates are based on creditworthiness, so your rate may be higher.

As with auto loans, there are specific requirements when it comes to boats, motorcycles and RVs. Check with the credit union for details.

Refinancing

Navy Federal Credit Union also offers auto loan refinancing.

Here’s a breakdown of APRs based on the type of vehicle:

  • New vehicles: 2.99% to 6.29% for loan terms between up to 36 months and 96 months
  • Late-model used vehicles: 3.29%* to 4.79%* for loan terms between up to 36 months and 72 months
  • Used vehicles: 4.99% to 6.29% for loan terms between up to 36 months and 12 months

Members may be eligible for $200 cash back 61 to 65 days after completing their first scheduled payment when refinancing from another lender.

A closer look at Navy Federal Credit Union auto loans

Highlights of Navy Federal Credit Union auto loans

A down payment isn’t required to get a Navy Federal Credit Union auto loan, but making one could improve your loan-to-value ratio, which could boost your chances of getting approved.

If you have a limited credit history, you may still get approved with a co-applicant.

You could get a decision about your application in just a few minutes. The credit union offers preapprovals, so you know how much money you can spend on your vehicle before you start shopping. If you get preapproved, your rate will be locked for 60 days.

The credit union offers an auto buying program, through a nationwide network of dealers, as a straightforward way to buy a new or used car. You can even get special military prices if members need to buy a new car while overseas.

You can get optional guaranteed asset protection (GAP) insurance for existing or new auto loans through the credit union. It also offers some discounts on GEICO auto insurance, depending on your state of residence.

Lowlights of Navy Federal Credit Union auto loan

If you don’t have ties to the military, you won’t be able to access Navy Federal Credit Union’s services, including its auto loans.

If you are approved for an auto loan, you must either pick up your check in person at a branch or receive it via mail. There may be a fee associated with mailed loan checks. If you had a co-applicant with a different mailing address, the check and promissory note will be sent to them. Some applicants may find this inconvenient, especially if their co-applicant lives far away.

On the credit union’s website, minimum interest rates are noted in detail for used vehicles, new vehicles, boats, RVs and motorcycles. The website, however, doesn’t note its maximum interest rates or discuss specific credit requirements for auto loan approval. The credit union did not respond to emails requesting this information.

How to apply for a Navy Federal Credit Union auto loan

To apply for an auto loan from Navy Federal Credit Union, you’ll first need to become a member. You can apply at a branch or online, and you won’t be charged an application fee.

Make sure to gather contact information for both you and your co-applicant, if you have one. If you’ve picked out the vehicle you want, you’ll need its 17-character vehicle identification number (VIN), the state where it will be registered, the dealer or seller’s name and the mileage reading on the odometer.

If you don’t have a specific vehicle in mind, you’ll need an estimate of the type, age and price of the vehicle you want to buy, including the warranty, title, tax and license fees minus the down payment. You’ll also need to know about how long of a loan term you’d prefer.

The credit union requires personal information, including employment and income details for both you and your potential co-applicant. It’ll ask for your current housing information, too. The credit union already has identity information about its members, and it’ll base its decision on your credit history, the amount of money you want to borrow and the value of your collateral.

You’ll receive a text or email from the credit union to let you know whether it approved your application. Most applicants get a decision in about five minutes.

The fine print

Navy Federal Credit Union’s website doesn’t indicate whether it charges any additional fees for auto loan borrowers. The only fee mentioned is the one that the credit union may charge to mail a physical check to an applicant or co-applicant, as mentioned above.

Who is a Navy Federal Credit Union auto loan best for?

The credit union is a great option for people with ties to the military who want to work with a credit union that has friendly policies and decent interest rates.

Like many credit unions, this one offers competitive interest rates for those with good credit. Even if you are already a member and know you’ll apply for an auto loan with this lender, it’s still important to shop around for the best rates so you can be sure you are paying the lowest possible amount for access to the money you need to buy a car.

*Rate accurate as of August 22, 2019

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rachel Morey
Rachel Morey |

Rachel Morey is a writer at MagnifyMoney. You can email Rachel here

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Buying a Car: When to Walk Away

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Walk away from car deal
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Buying a car can be a stressful experience for anyone. For some of us, the anxiety begins before we start negotiating financing or even step foot onto a car lot. But no matter how eager you are to get the experience over with, or how persistent a salesperson is, you should never buy a car without being certain it’s right for you.Ron Montoya, consumer advice editor for Edmunds, says that dealerships are good at applying pressure. “There’s always a sense of urgency that ‘today is the best day to buy the car,’” he says. “While that may be true for the seller, it’s not always the case for the buyer.”

According to a 2018 Cox Automotive study, you may be tempted to give in to the pressure after spending a whopping three hours at a lot, which is the average amount of time buyers spend. But no matter the circumstance, you should always be prepared to walk away in the presence of red flags.

How do you negotiate in “good faith?”

Like most things in life, a bit of preparation can go a long way. Here are some of the ways you can reduce your risk before approaching a dealership or private seller when buying a car:

Review your budget and credit

Doing your financial homework can help you determine what price range is truly affordable for you, instead of letting a salesperson decide. Loan payment calculators can also help you get a realistic view of affordability by taking interest rates and fees into account.

Get loan preapproval

Another factor in determining affordability is the amount of financing you get approved for. Having a loan preapproval from your bank or credit union, before visiting a dealer, has several benefits: it sets realistic expectations about the maximum sales price you can shop for and helps you avoid more expensive or even potentially predatory dealer financing. If the dealer can beat your preappoved loan offer either through one of its lender partners or through the manufacturer, you’ll know you’re getting the best deal possible.

Research market prices

Montoya, who purchases fleet vehicles for Edmunds, an auto industry research firm which tests cars, says the best way to prepare for a purchase is to understand the market price of the car you want. You can do this by looking up values through sites like Kelley Blue Book or Edmunds, checking out a variety of ads and car-buying websites, and even by getting a few price quotes, so you can compare them to the offers you get from a dealership.

Research promotions

Having a sense of manufacturer and dealer promotions can not only help you narrow down which models to buy and which lots to visit in your area, but it can also help you understand if the dealer is truly offering a “one day only” sale, or if it’s just a tactic to pressure you into buying.

What are the warning signs that you should walk away from a car deal?

Interacting with a salesperson who’s been trained to haggle and close the deal might leave you feeling outwitted. Some level of stress is normal, but these are the real red flags to look out for:

Prices change after your initial negotiations.

For example, your trade-in value is lower than what you discussed or your monthly payments are higher. You should also look out for add-ons you didn’t agree to, like an extended warranty or a “service contract” that increases the overall price tag. Montoya says it should be a deal-breaker when written terms don’t match what you discussed.

The contract isn’t final.

It’s easy to assume that signing a contract means your deal is final, but some dealers include contingencies, including “spot deliveries” that might be “yo-yo transactions” meant to intentionally deceive buyers.

If your contract states, for example, that your financing isn’t final, you may be asked to come back later and get a different loan with worse terms, for the car you’ve already taken home. If the dealer won’t state in writing that your financing is final, they may be breaking the law. This is a definite sign that you should walk away.

You’re being pressured.

Brent Miller, executive director of a community center where musicians work, practice and perform in San Francisco, recently shopped for a new car. Miller says despite visiting a reputable dealership for his purchase, the salesperson repeatedly pushed him to make unwanted decisions. “It was amazing how much pressure there was to sign the contract without reading everything, even before I had a loan offer,” Miller says.

If you’re encouraged to buy a different car than the one you’re shopping for, or to close the deal without looking over the numbers, Montoya says you should walk away.

The seller is withholding information.

It’s a red flag if your salesperson gives unclear information about pricing and loan terms. If you can’t get a straight answer on what your monthly payment will be, the length of your repayment term or your interest rate, you shouldn’t sign a contract. A good tip is to keep your focus on the out-the-door price of the car — if you get the lowest price possible, a good monthly payment should follow.

Discriminatory practices

If you feel a dealer is attempting to take advantage of you based on your citizenship status, income or other factors, you should go elsewhere. One way dealers do this is by marketing to you and conducting negotiations in your first language and then offering you a contract in a different language, with higher fees. Regardless of the circumstances, never sign a contract if you’re unsure what it says.

How to walk away from a car deal

So you’ve attempted to negotiate a deal with no luck, or you’re simply uncomfortable with the transaction. It’s completely within your rights to walk away at any point before, and in some cases even after you sign your contract.

During negotiations

At this point, walking away is as simple as putting one foot in front of the other. Montoya advises that even if the dealer already pulled your credit information, you’re still under no obligation to stay. While you may be concerned about the hit to your credit, know that making multiple auto loan applications within a short period of time will have a small impact on your scores.

If you’re having trouble ending the negotiations, Montoya suggests shutting down persistent salespeople by shifting the blame to someone else, like your spouse…even if you’re not married.

Whatever your explanation, walking away or telling the dealer you’re going to shop around is perfectly acceptable. If you really are interested in buying the car, walking away may also be a useful negotiation tactic.

Once you’ve seen the contract

Regardless of the time and effort invested by both parties, you are under no obligation to sign any contract you’ve been presented. At this point in the process you can still simply say “no” to the dealer.

After signing contract

If you sign a contract and drive away with a car, but then get called back based on a contingency, you may be able to walk away from the deal.

If you’re called back because financing fell through, you can demand to get your down payment back and unwind the entire transaction. To complete the process you’ll need to make sure that the application and contract are cancelled and that you get copies of all the documents.

If, on the other hand, you simply wish to return the car because you’ve changed your mind, your options may be limited. Some state laws may allow you to return your car if you discover it’s a lemon, but contrary to popular belief the “cooling off period” unfortunately doesn’t apply to cars.

In some circumstances you may have a special option to cancel, particularly when it comes to buying used cars. New York state law, for example, gives you a set amount of time to file paperwork and cancel your contract. Your dealer may also have a special clause that gives you time to reconsider and return your vehicle. But if neither your state nor your contract stipulates that you can cancel, your best shot is to ask the dealer to give special consideration to your case.

The bottom line

The best way to avoid a bad deal is to be your own biggest advocate. Educating yourself about market prices, understanding affordability and researching consumer protections in your state, all before you talk to a salesperson, can help you stand up to pressure and recognize red flags quickly.

Ultimately you shouldn’t be afraid to walk away, no matter how difficult the dealer makes it to leave. Both the car and the financing have to work for you. “I want people to buy a car when its right for them and do it on their own time,” says Montoya, “not a dealership’s time.”

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Sarah Brady
Sarah Brady |

Sarah Brady is a writer at MagnifyMoney. You can email Sarah here