Negotiating off the sticker price can be a bad idea

Many drivers in the market for a new or used vehicle make the mistake of negotiating off the sticker price listed for the vehicle. According to Consumer Reports, negotiating down from the sticker price can be a dangerous financial decision, because a driver may interpret any offer below sticker price as a good deal.

A more valuable piece of information for potential buyers to have is what the dealer paid for the vehicle. Knowing a dealer’s true cost lets a potential buyer know what kind of profit margin the dealer has to work with. Calculating the dealer’s true cost can be done by subtracting dealer rebates and holdbacks from the dealer invoice price, according to Consumer Reports.

Potential buyers are also advised not to let a dealer negotiate using monthly payments, since this method of negotiation can allow him to give the buyer a good deal in one aspect of the transaction and make up for it in another, making the buyer ultimately pay more.

Drivers who are shopping around for new or used vehicles can get financing by filling out an auto loan application.