Want a GM or Chrysler Car? Don't Forget to Haggle

Consumer Correspondent Elisabeth Leamy helps navigate the dealer negotiations.

June 8, 2009 — -- If you're hoping to bargain shop for a Chrysler or General Motors vehicle, don't forget to haggle. That both automakers are in and out of bankruptcy does not mean their vehicles are automatic deals.

Auto Web site Edmunds.com says most vehicles sold for about 16 percent off the sticker price during the past three months. Meantime, Chrysler cars actually went up in price, from an average of 26 percent off the sticker price to 18 percent. In dollars, that means the average Chrysler car that sold for $24,489 three months ago is now selling for $26,390.

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Why? The most basic law of economics: supply and demand. Despite -- or because of-- all the bankruptcy news, Americans are eager to buy Chrysler and GM cars. I liken it to the excitement created by going-out-of-business sales. And the deals at those aren't guaranteed either.

Edmunds.com measures consumers' serious interest in different vehicle brands by tracking visits to car-buying Web sites. Edmunds says this figure, known as "purchase intent," was up 72 percent for Chrysler cars from April to May. And purchase intent for GM vehicles was up 11 percent two weeks ago and 4 percent last week.

"Just because a brand is hurting doesn't mean that a shopper can automatically walk in and simply get a great deal," Edmunds.com Consumer Advice Editor Philip Reed said.

So, dust off your bargaining skills. Or, if you don't have any, here are a few key moves.

Look up the vehicle's wholesale price, the price the factory charges the dealer, at a Web site like Edmunds.com or Consumerreports.org. Your mission is to pay a price somewhere between that wholesale price and the retail or sticker price. The closer you get to the wholesale price, the more of a rock star you are.

One rule of thumb is to make your first offer 15 percent less than you really want to pay. Choose your starting point carefully because it defines the entire negotiation. You can't go any lower after that.

After you make your initial offer, be quiet. Allow the silence to build. Your goal is for the seller to be the one to squirm and shatter the silence by accepting or making a counter-offer.

Break of Car Dealer Negotiations, If Need Be

If your negotiations stall, leave. Tell the dealer you are prepared to buy a car today but just don't feel the price is appropriate. It's highly likely you will get a call back offering a lower price.

Keep your trade-in a secret. You don't want the dealership to know about it until after you have negotiated the purchase price of the car you are buying. Then negotiate a price for your trade separately. That way they can't play around with the two numbers and confuse you.

And, finally, make sure you and the dealer are clear on whether tax, title and fees are included in the price you're settling on. If you intend for those fees to be included, say that is your price to take the vehicle "out the door."