Car Buying: 4 Questions You Need to Ask (and 1 You Shouldn’t)


You and the car salesman share the same goal: you leaving the dealership with a new car. But no buyer wants to see the bill jumps after they’ve negotiated a sales price. Understand the final price—and know what it’s getting you in return—by asking just four questions—and avoiding one, too.

1. What’s the total out-of-pocket cost, including taxes and fees?

When a dealer advertises “no cash down,” or the “best deals of the season,” those prices generally don’t include taxes and fees. So be prepared to pay a lot more than that amount.

Taxes on vehicle sales vary greatly by state and county. For instance, cars bought in Pennsylvania and registered in Philadelphia come with an 8% sales tax. That would add $2,400 to a $30,000 purchase. You can’t avoid that chunk of change, but you can factor it into your car-buying budget.

Similarly, dealerships might charge fees for things like filing paperwork (“doc fees”), registering a car, and getting inspection stickers. These fees aren’t out of the ordinary and shouldn’t be considered unfair, but trying to get them waived is always worth a shot. At the very least, you should ask what they’re for.

2. Can we discuss the car, my trade-in, financing, and add-ons separately?

You might assume that dealers make the bulk of their profit on a new car’s sales price, but in reality, dealerships make money on six levers, including what they pay for your trade-in and any financing and accesory costs for your new car. Negotiating these items one at a time may mean more time at the dealership, but you’ll get the best possible deal for each.

For instance, knowing whether you’re getting equal value for your trade-in is impossible if you never actually discuss it. Before you head to the dealership, research how much your current vehicle is worth. That way, you’ll be prepared to quickly and fairly negotiate this price, and move onto the next question.

3. Which banks do you work with, and can I use my own financing?

You may get a better loan with financing outside of the dealership—particularly if you’re buying a used car. Before shopping for a car, see what options financial institutions like your personal bank or credit union offer. They may come with better terms, like a lower interest rate, depending on your credit.

If you go with the dealership’s offer, understand which bank or provider they will use to finance the car loan. If you’re buying a new car, you may need to use the finance arm of the original equipment manufacturer (OEM) to secure the best deal—which may include benefits like special rebates. Be sure to ask about this option.

For any lender you end up using, make sure it will be easy to work with and is reputable. And of course, know exactly what you’re agreeing to by reading the loan’s paperwork before signing on the dotted line.

4. What other amenities does your dealership offer?

When negotiating for a car, don’t be afraid to ask for free perks—oil changes, car washes, loaner cars/same-day service for maintenance, etc. Use the same tactic for any accessories or add-ons the dealer tries to sell you, such as an extended warranty.

The worst thing a salesman can do for such requests is say “no,” but they may not want to if they feel a sale slipping away. Sometimes, to close the deal, you just need some extra value. And here’s how you can get it without the dealer having to lower the sales price further—that’s a win-win, and great negotiating!

5. Never Ask if the Dealer Will Sell You a Car for a Certain Monthly Payment

Many dealerships are happy to negotiate based on monthly payment. One reason is that it provides car buyers with a simple, single number to think about. Odds are they’ll take the deal if that number sounds affordable each month.

Another reason is that structuring a deal around monthly payment could add more months to a loan’s term—inceasing and masking the total you pay. That’s good for the lender, but not you.

It’s great to know how much you can afford to pay each month, but don’t invite the dealer to sell you “any old car” for that amount. Target vehicles within your price range that make sense for you using our payment calculator, located on every CarGurus vehicle listing, and understand all the costs that go into that amount.

The Bottom Line

Hidden costs are only “hidden” if you don’t ask about them. When swapping numbers with a salesman, understand what they are and aren’t including, as well as how they got those numbers. You don’t want to negotiate down to your ideal sales price only to have thousands slapped onto it—or realize you left money on the table.

The content above is for informational purposes only and should be independently verified. Please see our Terms of Use for more details.