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I love buying cars! My wife cries and tries to avoid it at all costs. She'd rather pay THOUSANDS more to avoid the haggling, awkward waiting, and arguing/guilting than get a better deal. For me, I see it much differently. In fact I RELISH haggling and look forward to putting the Sales person, better yet — the man behind the glass! —, through their paces. My wife says I'm sick in the head, but I actually enjoy it. So, today is you're lucky day. I'll share with you the secrets to haggling. Maybe you'll end up enjoying it too!First, let me give you a few examples because there are those out there who will say it is not worth it. I say, Nay, Nay. My first vehicle was purchased used, 4 years old, when I was 18 and in my first year of college. My parents helped me purchase it with a small down payment and my father co-signed the loan on the condition I would make the insurance and car payments and take care of the repairs. I had a full time job and also went to school full time. It was tough, but my first mistake was buying a Ford in 1993. It was a 1989 Mercury Topaz. We had heard all the reasons not to buy a Ford, that they were not dependable in the long run, too many repairs, and over-priced. We should have listened and read the reviews. After 2 years, many repairs, replaced engine, and finally smoke coming from underneath dashboard, I traded for a 1-year old car.My parents and others, we had learned over the years, seemed to benefit from purchasing a car 1-year old after coming off off lease or from Hertz, Avis, or other rental agency. It gave you the look and feel of a new car, and if not a damaged or flooded car, could be a real good buy. I traded up to a 1995 Mercury Mystique. Notice I made the same mistake and bought another Ford! These years were tough for Ford. Quality was really low. I was young and swayed by all the shiny cars on the car lot. I had built some credit by this time with a small credit union offered through my job who had given me a $300 Classic Visa credit card. I was responsible with my car payments, bank account, and had gotten a better job working as a Customer Service rep in a large bank. But after 3 years, this car began to fall apart too. It's like, there's something in the computer that tells it the 3-year warranty is up and it's programmed to fail. After the same sensor failed twice in 3 months, even after replacing it for almost $300, I decided I learned my lesson.Lesson #1: know your credit. Have a back-up plan. Don't let the dealership control how you finance or pay for the vehicle. Don't give them all the cards in their favor! If you can, be prepared to pay cash. But if you're not able to do that like the rest of us, have a back-up plan. Because of the credit I established, I was able to speak with my Credit Union in advance and be pre-approved for an auto loan at 5.9% used, 3.9% new. Note, I work at a bank and what the dealer doesn't tell you is that they make even more money off of their "prearranged" finance plans. These plans are predetermined between the dealerships and the banks. For every loan they sell, the dealership gets a kickback. Sometimes, they have a range of loan options from each bank…the higher the interest rate or loan amount, the more money the Bank….AND the dealership make. This is IN ADDITION to the money they're making on your trade and the car they sold you!By now, I was receiving the Consumer Reports magazine on a monthly basis. Even to today, I have anual membership online and use it for everything! I did my research, read the reviews, and decided to make an informed decision. I am a patriotic American. IF I can, I want to purchase American, support American companies, which helps American workers down the road. It doesn't mean I won't buy foreign if there's no other choice. I was left with Dodge/Chrysler/Jeep or GM. Chrysler was going through a similar lull and their cars simply weren't worth the trouble and aggravation in the long run.After a little research on available GM cars at that time and what I needed, I set out to look. It is always better to look when you are NOT under extreme need to get a vehicle right away for necessity. Everyone could use a better, nicer vehicle. But if you are without wheels or about to be, don't give this away to your Sales person if you don't have to. It becomes another chip in their pocket and a bargaining tool AGAINST you. They know they have you and can resist your bargaining attempts because they know they can. Bargain from how much you'll pay for the car, NOT the amount of monthly payment down. Monthly payments are relative and affected by multiple factors (as you'll see in examples ahead….keep reading!). Lesson #2: Do your Research.I came from a family who loved Buicks. A Buick would nice, but I could only afford a used Skylark and it did not have good marks. Know how much you can spend before you go shopping — and stick by your guns! Don't ever let the Sales person, friend, or family member convince you that you can spend more than you can afford in a monthly payment! I saw a Pontiac Grand Prix that was gorgeous, red, and sporty. But it was 18,000 when I could afford 16,000 maximum. Then, I came across the car I ended up with. A 1996 Chevy Lumina. To this day, it is still the best most dependable car I ever owned. Not flashy, not sporty, not luxurious. But for 15,000, I could afford it. Best decision I ever made. Great on gas mileage, only one repair in 7 years, and had everything I needed….till I totaled it in 2003.Next, I went to a Tent Sale. I wasn't even interested in buying a car that day, my wife and I were only looking. I was using my wife's car. But we went at 5:30pm just as they were about ready to close up the tent and go home. I was looking at the Buick LeSabre, but completely ignoring the Buick Century. They were asking $16,000 for a 1-year old 2003 Century and I walked away with it for $13,000. Second best car I ever owned. Like the Lumina, but had a few bells and whistles which come standard on Buicks. I'll stop with the examples, but I think you get the jist now. But there's one more lesson. Don't let them cheat you on your trade-in vehicle.If you can, sell your old vehicle. You'll get the best price because you can sell it for full, fair price. A dealer sends their trades to an auction, so they will offer you 20–40% lower than the fair value. 20% loss is acceptable if you find another car you like at a price you like. 40% loss is not acceptable. The dealer will offer you nothing or sometimes lower! Don't let them get away with it. This is just another way they make money on top of the vehicle you are purchasing, the finance options, and the post-sale services! If your trade is worth $10,000 if you sold it on Craigslist, the dealer will try to give you $6,000 for it, auction it for $8,000–9,000 and make several more thousand off you. Lesson #3: Consider the WHOLE deal when bargaining. Here's all the ways the dealership makes money when you just buy a simple car:Mark-up above the true value of the car you purchase. Note: MSRP is not the true value.Difference between the value of your trade and the amount they offer you for it.Going with one of THEIR financing options (kickback from bank).Dealer Prep or Delivery Fee. Don't be fooled! This is not required nor is it non-negotiable!!! Include it in the bargaining as a tool in your belt. They will try to tell you this fee cannot be touched, that it is for all the work they do to prepare the car for the showroom such as putting on plate covers, mats, removing tags and stickers, peeling off protective plastic, washing, and moving the vehicle around. Be fair….include it in the overall deal, but don't let them take advantage. Most people will pay $895 on up to as high as $1200 or higher without question or consideration of other ways the dealer is making money on the deal. What is fair? About $300–600 depending on the price of the vehicle you are purchasing, used or new, and how much "prep" they really had to do.Other add-on services tacked on or offered AFTER you decided to purchase. Key fob replacement, premium Service levels, tire insurance, scratch/dent coverage, and so much more…. Sure, they can offer this all to you for an extra $96 per month, but do you need it? I found that scratch/dent protection is simply not worth it. Most people who try to get scratches or dents covered in the end, lose out due to some technicality, limitation, or non-covered reason. You don't need tire insurance. Really! You have a spare. And if you purchase at Wal-Mart automotive, tire coverage can be as low as $3 per tire on your next purchase. Sure, you'll risk having to buy another tire. $96 times 39 payments is $960 for every 10 car payments. You can buy 4 full sets of tires after wasting all of that money! I took key fob coverage for $6 because this almost always happens and can cost $240 to replace if lost, stolen, or stops working.Take a look at the difference between fair and unfair, between what the dealership could take you for and what you can save. The more you save, the MORE car you can purchase!Deal Component—————-Not Fair to Dealer—————Fair———————-Not Fair to YouPrice of car purchasedabove black book valueif $8–15k""……………………….$399 or less……………………..$400–800……………..$801+if $16–32k……………………….$799 or less………………………$800–1200……………$1201+if $33–52k……………………….$1199 or less…………………….$1200–2500…………..$2501+I mean, they do need to make money to stay in business.Trade Value20% less than Blue Book value, or what you can sell it on the street. You have to take into consideration all factors including mileage, age, accidents/damage, features working, and condition of the vehicle overall. A car worth $10,000 in good condition, with moderate mileage, no accidents or flood damage, should get as high as $9,000 for trade. The same car in fair condition, high mileage, and a former accident may only get $6,000.FinancingThe most important rule to financing is…DON'T LET THE PRICE OF THE VEHICLE BE AFFECTED BY THE FINANCING OPTION! Decide the trade and price of your vehicle you're purchasing BEFORE you decide how you will pay. This is the single, biggest trick in their hand! They will withhold the best financing options from you if you don't give them more money for a trade or for the new car. They will tell you that better financing options are not available. It is NOT true! This is why I say go in with a back-up approval from your bank or Credit Union and don't tell them. Don't give away your hand!!! This is really REALLY like a game of poker. The more tenacity you have, knowledge of how the system works, research and knowledge of how much the cars are worth before you go, and back-up financing, then YOU hold the power and control over the deal and NOT the dealership! Even if they offer you a horrible financing option at 5.9%, you can always re-finance the loan to your bank or credit union next week. If your bank is giving you 4.9% or even 3.9%, you will save hundreds, if not, thousands of dollars. On a 5-year loan, just a 1% difference in financing rate per $1,000 dollars, equals $.33 cents per month. Multiply this by the interest rate you are actually being given. If 5%, then $.33 X 5, or about a $1.67 per month for every thousand dollars. Now, multiply this by the number of thousands in the price of your car. If the car is $32,000 to finance, then take the $1.67 and multiply it by 32. This means that for that vehicle, you will pay a minimum financing fee equal to $53.33 per month for 60 months in addition to 1/60th of the loan. No, it's not exact even if you use an auto loan calculator on the Internet, so talk with your bank or financing company. And since interest can also be compounding, it'll be a little higher. 1/60th of $32,000 is $533.33. That is what you repay at 0%, or no cost to borrow. At 5% for 60 months, you pay $604 a month. Know what you can pay before you go.Deliver Fee/Dealer Prep:Be prepared to think quickly on your feet. Not only do you have to do your research in advance, prepare a back-up financing option to compare to dealership options, know your trade value when you go, and determine a FAIR price for the new vehicle that you will pay,…..Ugh, if that wasn't exhausting enough…..be ready to calculate what you will pay for this fee. Here's a guide to help:if $8–15k""……………………….$300–450if $16–32k……………………….$451–600if $33–52k……………………….$601–900On the graphs, above, the reason I didn't include anything for vehicles higher than $52k is because if you can afford a vehicle higher than this, much of what I've written matters less. Sure, you can still haggle and do your homework, but I'm sure you're already smart enough to know the value of what your paying for. You can afford to pay for what you want and won't pay for things you don't want. You didn't get where you are with the purchasing power you have by being dumb or naive.As for financing options, ultimately, you'll need to compare your bank's existing financing option, interest rate, terms, fees, down payment requirement, and monthly payment to the offers the dealer will present to you. Sometimes, the dealer's offer is better, so consider them all. Make them work for their money, and never, never, never accept the first offer they bring to the table as the only deal. This is what they WANT YOU TO DO. When helping my wife purchase her brand new 1998 Pontiac Sunfire back in 1997, we couldn't come to an agreement after 3 hours of haggling, 3 trips the Salesperson took to the "manager" behind the glass doors, a visit from the Sales manager, and a meeting with the Finance manager. We walked out and said "no deal." My wife was trading a 1984 Chevy Camero with a good engine, a little rust, and A/C wasn't working. I knew they wanted it. They were asking too much, offering too little for trade, and financing options were not good enough. I refused to pay $750 Delivery fee. My wife cried. We were angry. Three days later, they called me back and agreed to give us the price we wanted for the Sunfire and trade if we took their financing. They said they had no other option available. I took the deal, got a much better trade value ($2,000 more), better price for the new car ($3,000 less than MSRP), and saved $5,000 so far. I took their higher financing rate at 8.9% and the following week had my Credit Union sending a full payoff to the auto loan company the dealer set us up with. My Credit Union was able to give us 3.9% for new vehicles, or 5.9% for used cars up to 3 years old. It was the difference between a payment of $381 and $331 per month, or $50 per month saved! Over 5 years, that equals $3,000! Do you know what else I could use that $3000 for??? That savings added up to a total of $8,000 TOTAL saved doing it my way instead of the dealer's way.That is every car I have purchased or leased since. Saving $8–12k with every purchase allows me to purchase a BETTER car. Twenty years ago, we were buying cars worth $13–18k. Ten years ago, we were buying cars worth $18–25k. Now, we have the purchasing power to buy cars $29–39k. Just last month, it meant the difference between buying a used 2017 GMC Terrain worth $26k and a new 2018 Chevy Traverse worth $39k. If I let them, they would have had me pay $526 per month for the Terrain with a terrible deal on price, trade, and financing. Instead, I walked out and found a dealer that agreed on a fair deal of $417 per month for a newer, larger, better vehicle with more features! Well worth the 3 test drives, difficult and uncomfortable conversations, hours of sitting in the waiting room, and face off with the Sales people.Don't be afraid to haggle, but know their tricks! If you go in uninformed or desperate, they've already won. Knowledge is power. The immense satisfaction from car buying every few years has been almost an addiction to me. I get perks, better service, free test drives, and more features. One dealership, who I purchased 5 cars in a row (yes, it was that GMC dealer that just lost out last month), even let me borrow a vehicle for the weekend. I was able to "borrow" an Acadia once and drove 200 miles to a theme park for the day with my son's three friends and returned it the next day because we needed a third row seat. Saved me from having to take two cars or rent a vehicle. We leased an Acadia 1 year later for my wife. The dealer even gave the car to me 1 week before we signed anything so I could put it in the driveway with a big bow on it Christmas morning.You are worth it! See, YOU can be in control of your finances. YOU are in control of your knowledge. YOU are in control of the deal, NOT them. To sum up:Know your credit and go in with leverage and other optionsDo your research on the vehicles you're interested in and on your trade. Know their black book value. Question every false narrative they try to feed you. Knowledge is power.Consider the WHOLE deal and don't let them change terms on trade, price, or financing because they are all separate!Be brave. Stand your ground. Be patient!At the same time, don't be rude. Don't be crude or use offensive language. Don't yell. These are all things a smart Sales person will use to discount you and write you off.Be reasonable. It's okay to argue, but back your decisions up with facts. Don't be belligerent, but be calm and firm. Remember, being at the table making a deal involves two sides. Theirs and yours. If you don't agree, then don't be afraid to walk away. There is a dealer somewhere DYING to sell you a car.Be fair. No dealer will make a deal with unreasonable terms. Remember, they are a business and need to make money. That's why I gave you examples, above. Gauge what is fair to you and fair to them. Be happy with your accomplishment in the end!Happy car hunting and price haggling!!!