Walk into most dealerships and one of the first questions you'll hear is, "What monthly payment are you looking for?" It sounds helpful. It's actually the easiest way for a deal to get more expensive without you noticing.
A monthly payment can be made to fit almost any budget by stretching the loan term, adjusting the down payment, or folding in extras. The number that tells you whether you got a good deal is the out-the-door (OTD) price.
What "out-the-door price" means
The out-the-door price is the total amount you'll pay to drive the car off the lot. It typically includes:
- The vehicle's selling price, which is negotiable
- Dealer fees, such as a documentation ("doc") fee, which may or may not be negotiable depending on your state and the dealer
- Any add-ons the dealer has included, which are usually negotiable or removable
- Taxes, title, and registration, which are set by the government and not negotiable
Because it includes everything, the OTD price is the only apples-to-apples way to compare offers from different dealers.
Step 1: Know what the car is worth before you ask
Research the vehicle you want, including trim, options, and color, so you're comparing identical cars. Look at the sticker price (MSRP) for new cars, and check what similar vehicles are listed for in your area. Know which incentives or rebates the manufacturer is currently offering. The more specific you are, the harder it is for a dealer to shift the conversation.
Step 2: Get financing lined up first
If you plan to finance, get pre-approved by your bank or a credit union before you shop. That gives you a real interest rate to compare against. Dealers can sometimes beat it, and that's great, but you'll know whether they actually did.
Step 3: Ask several dealers for a written OTD quote
Contact the internet sales departments of several dealerships by email or phone. Be specific: the exact vehicle (or stock number), and a request for an itemized out-the-door price. Written quotes are easier to compare and harder to walk back than a number said out loud in a showroom.
Tip: If a dealer won't give you an out-the-door number and insists you "come in first," that tells you something. Plenty of dealers will quote in writing.
Step 4: Compare, then use the best offer
Line up the quotes and compare the OTD totals, not the individual line items. Then give the dealers you'd prefer to buy from a chance to beat the best written offer you have. Stay polite and specific: "I have a written out-the-door offer of $X for the same vehicle. Can you beat it?"
Step 5: Keep your trade-in separate
Treat your trade-in as its own transaction. Get a sense of its value from online estimators and, ideally, a firm offer from a buyer who purchases cars directly. When trade-in, price, and financing are all negotiated at once, it's easy for a generous number in one place to be offset by a worse number somewhere else.
Step 6: Read everything in the finance office
After you agree on a price, you'll usually meet with the finance and insurance (F&I) office. This is where extended warranties, service contracts, GAP coverage, and other products are offered. Some may be worth it for you, but none are required to buy the car. Make sure the final contract matches the OTD price you agreed to before you sign.
The short version
- Negotiate the out-the-door price, not the monthly payment.
- Get quotes in writing from several dealers.
- Arrange financing ahead of time so you have a rate to beat.
- Keep your trade-in separate from the purchase.
- Check the final paperwork against the agreed price.
Want someone to do this for you?
With our Full-Service plan, we handle every step above: research, dealer quotes, negotiation, financing, and trade-in. You just show up to sign. Prefer to do it yourself? A 1-hour coaching session gets you a personalized game plan.