How to Get a Great Deal on Your Next New Car

You may already be aware that the price on a vehicle’s window sticker (or the one in a car ad) isn’t necessarily the final price you’ll pay, says Gabe Shenhar, associate director at Consumer Reports Auto Test Center, who has purchased hundreds of the cars CR has tested (all of them anonymously so that dealerships don’t know it’s CR doing the buying).

“Dealers are independent of the brand they’re selling, and so they can charge more (or less) than what the manufacturer suggests,” he says, explaining that automakers often give dealerships bonuses if they sell lots of cars or sell specific models. “That allows the dealer to pass on the discount to the consumer if the consumer negotiates well,” Shenhar says.

When negotiating, there’s more than one price you have to pay attention to:

MSRP
The manufacturer’s suggested retail price is the amount a car manufacturer determines a vehicle should sell for, and it’s often used in advertisements and displayed on a vehicle’s window sticker. You can use this price to determine whether a car will fit your budget.

Transaction Price
Including incentives and haggling, this is the amount a dealership actually charges you for a vehicle before taxes and fees. This amount could be more or less than the MSRP, depending on how much demand there is for a vehicle.

Out-the-Door Price
This is the amount you would write a check for, or the total amount your bank would finance, including taxes, fees, and extras.

The fees shown in the out-the-door price may include:

Destination fee: This is a non-negotiable charge for transporting the vehicle from the factory to the dealership.

Documentation fee: Sometimes called a conveyance fee, this is the fee a dealership charges to cover the cost of processing documents related to a vehicle sale. Some states cap the amount that dealers can charge. We’ve seen fees as low as $70 in California and as high as $900 in Florida. Many dealerships will not negotiate a documentation fee, but Shenhar says you can always ask the salesperson to reduce the price of the car itself accordingly, because salespeople have more flexibility there. The best way to avoid paying more than someone else is to research prices by using services such as CR’s Build & Buy program. It is powered by data from TrueCar, a CR partner, which tracks real transaction prices from over 12,000 dealerships across the country. Build & Buy will tell you what other buyers in your area have paid for similar vehicles, and what prices are considered a good or bad deal. It will also connect you with dealerships to get up-front price offers. (Edmunds offers a similar service, and CarGurus analyzes the prices of used cars.)

“Only by knowing the typical transaction price can you know if you are getting a good deal and how aggressively to negotiate for a discount,” says Todd Young, senior data analytics specialist at CR.

For example, if you’re shopping for a 2025 Ford Explorer in Kansas City, Mo., you might think you got a good deal if you paid $42,270, which is less than the car’s $43,380 MSRP. But according to CR’s Build & Buy service, you actually got a bad deal, because some local buyers negotiated the price down to $40,465.

Once you have Build & Buy’s pricing data, email or call a dealership and ask for its best price on the car you want. If the price is too high, start negotiating for the lower price you know other buyers have already gotten on the same vehicle. Alternatively, Build & Buy will put local dealerships in touch with you to offer prices for the vehicle you want.

We recommend creating a separate, free email account for this purpose—based on our experience, you’ll get a lot of emails from dealerships that want your business.

It’s important to have realistic expectations. CR’s analysis of TrueCar data shows that, for vehicles that sell below MSRP, discounts usually range from a few hundred dollars to a couple of thousands less than MSRP—so don’t expect to talk a dealer into $3,000 off a popular new model. Instead, look for vehicles that are already priced close to what Build & Buy says is a good deal.

Our analysis of pricing data uncovered a few more tips to keep in mind:

• The less expensive a car is, the less you should expect to save off MSRP. Profit margins are too small for dealers to discount much on cars priced around $25,000 or below.
• Big savings are often available on luxury vehicles—including cars, trucks, and SUVs—which have wider profit margins than less-expensive cars. A few may sell for more than $5,000 below MSRP.
• We saw huge discounts—between $5,000 and $10,000—on luxury electric vehicles from European automakers. Be aware that EVs tend to have higher depreciation than gas or hybrid cars, so those up-front savings might cost you more in the long run when it’s time to sell or trade in the vehicle. You won’t be able to negotiate discounts on vehicles from EV brands such as Tesla, Lucid, and Rivian, which are sold directly to consumers, but they do occasionally drop (and raise) prices.
• Popular models with a lot of hype surrounding them rarely sell at a discount. For example, our pricing data shows that the Toyota Highlander Hybrid—a top-rated, fuel-saving, three-row SUV—can sell for about $2,000 above MSRP, depending on trim level. “For some cars, paying $1,000 over sticker price is actually a great deal because it can be a lot less than most other customers have paid for that car,” Young says.