New Car Buying Guide | Car Pricing

Set a target price

Your target price is the price you can reasonably hope to attain through negotiating. When you walk into a showroom, youíll see a window sticker on every new car. It contains the MSRP, including the cost of options and the destination (delivery) charge. Typically, you will be able to negotiate a lower price with little resistance. But donít even use the sticker price as your starting point. Unless the vehicle is in big demand and short supply, you should be able to pay even less than that by doing some homework before you visit the dealership.
Your target price will be a number between what the dealership paid the manufacturer for the car and the figure that appears on the window sticker. By knowing the dealerís cost, youíll know how much profit margin he or she has to work with. Your goal, then, is to get him or her to accept the slimmest possible profit. As a buyer, you have more power than you might think. For the purposes of negotiating, assume that they need you more than you need them. But you canít expect a dealer to make nothing on the sale. Your target price needs to allow some room for a fair profit to the dealer.

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