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A study shows that more and more people are haggling wi... A study shows that more and more people are haggling with dealers on the price of their next cars (ThreadedThoughts, Flickr).

More car buyers are haggling over the price of their new car than at any point in recent history, according to new data compiled by CNW Research of Bandon, Oregon. Across the three main purchase paths –- cash, financing and leasing -- haggling has been on a steady rise over the last 15 years. Over 44 percent of all new car buyers are now negotiating their price against the dealer's initial offer.

Data for the first half of 2010 showed similar numbers to years past: Those who buy with cash are in a much stronger position to negotiate. Some 66.1 percent of cash buyers now haggle, an all-time high, compared to 17.8 percent for those who lease. Consumers who finance are now haggling 48.2 percent of the time, also an all-time high.

CNW President Art Spinella told AOL Autos that the rise in haggling isn't so much a result of more combative sales environment, but rather a savvier, informed shopper.

"Consumers have more information now than ever before," said Spinella. "Through the internet, they have the ability to see things like invoice pricing that were previously unavailable to them."

Spinella also noted that the rise in social media played a significant role in the increase in price haggling.

"Internet social media is incredibly important as people share what they paid for something more willingly than before," said Spinella. "Their friends see that price then say to the salesman 'My friend paid this price for that car.'"

The study was compiled through a combination of in-store surveys, observations at car dealerships and post purchase surveys, all of which centered on a common theme: Did the car buyer, upon receiving a price offer from the salesman, counteroffer with a different, lower price? If they did, Spinella said, that constituted haggling.

The Car Dealers

Car dealerships have noticed the rise in consumer negotiating and attribute it to the wide availability of information on the Internet as well. Free price quotes along with the transparency of invoice pricing and the ability of consumers to obtain financing quotes from institutions beyond the dealer has made for a much more prepared car shopper.

John Nelson, the Pre-Owned Operations Manager of Mercedes-Benz of Hoffman Estates, near Chicago, said that he was not surprised by the statistics. "You have a more educated buyer [in showrooms] today. With the amount of information available, there's no more feeling of being in the dark," he said.

That education on the part of the customer translates into a more aggressive car buyer, according to Nelson. But this does not necessarily mean that the process has become any more hostile. In fact, in many ways, car dealers have found negotiation has become an easier, tamer process for sellers and buyers alike.

"It makes for a much less stressful sale," Nelson said. "The transparency is good, as it makes for much less of a fight. People don't come in anymore and demand $10,000 off the price of a car. They are more realistic because they know what the car should cost."

Nelson said that because the educated shopper has an idea already in their mind of what they want to pay, it has become a much easier process for the salesman and the consumer to agree upon a price.

Fortunately, haggling isn't a psychological game of cat and mouse with the guy in the plaid suit. It's more about homework than anything else. Michael Royce, a former car salesman and consumer advocate at his beatthecarsalesman.com, told AOL Autos that knowing a few key things can put you in a position to be an expert negotiator without even realizing it.

"Information has always been available, just much harder to find and you had to pay for it. Companies like Kelly Blue Book and Edmunds as well as others published guides you could buy that would give you invoice prices. Now that information is free on the Internet. The websites tell you how to do it."

Royce said that, counting the invoice price, there are three pieces of information that car buyers should always have prepared before they even think about setting foot inside of a dealer showroom, which makes negotiating a breeze and can put you at a huge advantage in the car buying process.

"Handling your financing separately, having the invoice price, and having a price quote are the three most important arms a consumer can have," Royce said.

By handling one's financing separately you will get a better deal as the quote will be void of any "padding" that the dealers like to add on, such as extended warranties. Thus, as you will already have a lower financing rate in your hand, Royce said, the dealer will be pressed to beat it when the time comes during the negotiation.

You can obtain financing quotes from your local bank or credit union or for free online by using sites such as car.com.

Obtaining the invoice price of the vehicle that you want to buy is of the utmost importance, Royce said. By doing so, you know how much the dealer stands to make on the markup of the car. You can then decide how much profit you are willing to let the dealer have by starting at the invoice price and negotiating up, instead of the other way around. Doing so will put you in a much better position to get the deal you are looking for.

Many sites these days will provide you with a vehicle's invoice price free of charge and with relative ease. The new car pages within AOL Autos, for instance, provides this information on every kind of new vehicle currently available.

Finally, getting a price quote from other local dealers should be the third weapon in your car-shopping arsenal, Royce says. By having an idea of what other dealers want to charge for the vehicle you are looking at, you can pit them against one another. As the dealers duke it out for your business, you can sit back and watch your purchase price drop.



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  • 90 Comments
      ppurrenhage
      • 6 Months Ago
      zjafrani, Not a crime for dealer to make a profit but most folks like to pay as little as possible. How much extra profit do you like to pay when you buy a car, house, etc?
      lrecctx1973
      • 6 Months Ago
      THese articles are such bull. First off, if you are paying cash, you are less likely to get a lower price than if you finance. Second, If you use outside financing, you are less likely to get a lower price. And third, most legitimate car dealers OFFER the add-ons when the paperwork is being signed. LEGITIMATE dealers know about the freedom of information act. You cannot add anything to a contract without the customer signing for it. Those dealers who alter paperwork and "pad" deals usually end up playing a hefty fine when they are audited (which happens often). Maybe if the public did a little research on dealerships before they buy, they would get screwed less often.
      • 6 Months Ago
      you want to find out what the dealer purchased the car from the manufacturer ...the MSRP..... they cant go below what they paid for the car originally..... and then look at the invoice price to see how much the car has been marked up.
      Christina
      • 6 Months Ago
      I have a difficult time feeling sorry for the dealers. I was raked over the coals by a local dealer AFTER our deal was done. They ended up altering my documentation when it was sent for final processing to my financing company, and end loaded my loan with the cost of my trade-in. That put us in a reverse equity position on the vehicle, and we didn't agree to it (which in our state it was supposed to be signed and agreed to in the documentation). The paperwork was completely changed from the papers we signed, and when we contacted our attorney general, and they told us too bad. It's been many years, but I'm still miffed that we were screwed.
      • 6 Months Ago
      .... and no, I am not a car salesman.
      horseflicks
      • 6 Months Ago
      I have no problem with a dealer making a profit. I do have a problem when the same identical vehicle is sold to one individual whose willing to haggle at one price- and someone else who lays down gets ripped a new butthole. I have never felt in the past 30 years of buying cars, that I left the dealership with the deal of the century, I always felt I took it in the shorts somewhere, because that's the goal of the dealer, they aren't your friend, and at the morning sales meeting they will tell the story of how they slapped the meat to any given customer. They pride themselves on being the biggest customer gig for the week. Their sole objective is to get you to pay as much as you can stand without walking out the door. A car salesman is not your advocate, they are your adversary, and if you think they are doing you any favors in the process, then you probably believe in the Easter Bunny.
      • 6 Months Ago
      You people have to much time on your hands! : D
      • 6 Months Ago
      I love these articles AOL puts up. Heaven forbid car dealers make any money on the sale of a car. AOL can post these "help" all day long its the consumer who has to feel good about the purchase they made. Tell me you feel good when you pay $3 for a gallon of milk...yeah you dont feel cheated then do you. Fact of the matter is car dealers are professionals they do this day and day out....the consumer who walks in with his folders and consumer reports usually winds up paying the most. The dealers laugh about it all day and I do too. The best is when a customer says Kelly Blue Book says my car is worth $xxxx amount of dollars....well then sell your car to Kelly Blue Book and then buy my car. Customer says well Kelly Blue Book doesnt buy cars.. Dont begrudge a sales person to make a living, most of them do not make hundreds in comission on sales. Most of the time its a mini comission usually around $50 or $75 for what......3 or 4 hours of work? How many people here would deal with that for that amount of money? I doubt very few would.
      • 6 Months Ago
      The Invoice cost is the alleged Dealer Cost of the vehicle. However Dealer's have Incentives, Finance assistance, Aging incentives, Holdback, and many other kickbacks that really lower true cost. So you aren't really dealing from true Dealer cost by going from invoice. Even your salesperson doesn't know about all these discounts and don't get paid on them. I know from experience having been the General Manager of Automobile Dealerships in the past. And by the way as to the comment A vehicle Service Agreement has nothing to do with your interest rate! Just say no if you don't want it!
      • 6 Months Ago
      if a car dealership didnt make a profit they wouldnt be in business. even when my dad ordered his cars straight from the manufacturer it was still a bit more then the base bottom line... profit.. and theres nothing wrong with that. isnt that why we all work? to make a profit bring home pay to pay bills? if there was a way to cut out the middleman (the dealership) and buy wholesale (straight from the manufacturer) then you wouldnt be able to haggle anything because it would already be at the bottom line.. and look how many people would be without a job and how much money would be lost (not going back into our already weak economy)... you have to be reasonable when buying a car.. any more people want something for nothing i noticed this just selling used cars on online for sale sites and im not a dealer. my cars are well taken care of guarantee you couldnt find a better car for the price i have them ******* better to sell your car outright then to trade it in , you'll get more money for it) then people want to talk me down past what the POS up the road is going for. you want to spend that kind of money go buy the POS down the road..i'll hold onto my great running low milage car.....
      • 6 Months Ago
      buy a ford thru the friends and family program. all you need is the name of a ford or ford dealer employee. or work for a company who does bussiness with ford. you get a set ptice below dealer cost.
      • 6 Months Ago
      zjafrani, it became a crime to make a profit when Obama took office. Capitalism is evil...haven't you heard?? Socialism is the way to go according to what is being shoved down our throats.
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