What Should I Pay for a New Car? Let’s Ask TrueCar

by Car Negotiation Coach

What should I pay for a new car?How do you know what to pay for a new car?  Most people never really know.  They do a little haggling and hope the price they got was a fair deal.  But now that TrueCar is on the job that guess work is gone.  TrueCar collects statistics from car sales across the country and shows them to you so you know exactly what to expect.

Before you read about how TrueCar works, let me start out by telling you it’s possible to beat TrueCar prices.  They do offer a fantastic tool to find low priced cars, but you should not stop price hunting after getting their “Best Local Price”.  More on that later, but first…

What is TrueCar?

TrueCar provides guaranteed car price quotes with a twist.  They enable consumers to see exactly what other people paid for new cars in their local area.  This gives you an answer to the most commonly asked car buying question, “What price should I really pay for a new car?

TrueCar Review

Unlike other car quote  services, TrueCar has access to real-time market data and they use it to help you understand what to pay.  When you enter a make and model, they’ll show you a clever chart like the one above that reveals dealer cost and what’s considered a good deal.  In negotiations, this information is extremely valuable whether you buy a car through one of TrueCar’s network of dealers or not.

TrueCar Review

Here’s what I like about TrueCar

  • You get haggle-free, guaranteed price quotes on new cars and trucks from local dealers in your area.  Other services will put you in contact with local dealers, but you won’t find the same layer of cost transparency and upfront pricing.
  • Their Price Report shows you the actual car cost, average price paid, and what constitutes a good deal in a clever graph. This is similar to Edmunds True Market Value® which I explain in this Edmunds Review.
  • Their Price Report also includes a “flexibility score” of how much negotiating room a dealer has on that model.

Here are the only things I don’t like about TrueCar

  • Their advice is to take your “Best Local Price” to the dealer (which is usually quite good), but to not bother negotiating the price any further.  A TrueCar Price Report will certainly help you get a fair price, but by itself may not get you the absolute best price.
  • They only put you in contact with three local dealers.
  • Dealers quote a price through TrueCar on a model, color, and options, but may not actually have that configuration in stock.
  • They don’t help you find the best car financing or get the most trade in value for a car which are huge aspects of a car purchase and can cost you a lot of money if not handled properly.  But then again, you’re on your own for these items when using any car price service, so I can’t fault TrueCar too much for leaving them out.

How to Really Use a TrueCar Price Report

For most people, simply getting a TrueCar price report and using it at a local dealership is enough to get you a fair price on a new car.  However, I like to take it a step further and see if I can find any dealers willing to give me a better deal.  I use the price report as a guideline of what I should pay for a car, but I still try to beat that price.

After you have a target of what you should pay for a new car, use their service to locate dealers and get price quotes.  Then email each dealer and ask them if they’re willing to beat the best price you’ve received so far.  Don’t be surprised if you are able to get even more savings than the low price you were quoted online.  You can use the emails and car buying tips I’ve included in my free car buying guide: How to buy a new car at the best possible price.

Other Tips for Using TrueCar:

  • There’s a small, almost hidden button underneath the price that says “Edit Options”.  Use this to configure the car the way you want it.  Make sure you input all your desired options BEFORE requesting a quote.  You want to be certain dealers all quote you based on the same set of options.
  • TrueCar only puts you in touch with three local dealers and I suggest contacting 5-8 to get truly competitive pricing.  However, it’s easy to find other local dealers by combining TrueCar quotes with quotes from another service like Edmunds or other car quote services as well.
  • If you get to the dealership and they do not have the exact configuration you were quoted, don’t get sucked into paying a higher price.  The Price Report you receive will be for a specific trim and options package, but dealers don’t always carry cars in stock for every possible configuration.  So before you go to the dealership, make sure the dealer provides you with a specific VIN number, price, and list of options.  If they try to add options and increase the price, consider checking with other dealers for what you want.
  • Don’t forget that a good car price is only half the battle.  Once you get to the dealership be prepare to negotiate car financing and the price of your trade-in as well.

Want to buy a car near (or below) dealer cost?

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{ 32 comments… read them below or add one }

krantcents

The more information available for buying a car , it is more likely you will get a fair deal.

Barb Friedberg

This sounds really cool. My 1998 model is getting a bit long in the teeth. When I need a new one, I’m going to check this out!

Car Negotiation Coach

Hey Barb, I’m not even sure what “long in the teeth” means when you’re talking about cars :), but I’m sure it’s not good! 14 years is about time to retire it! I’ve got a car that’s about 11 years and its ready to be put down too.

Evan

Cool site! I’d love to see something like this for leasing. Edmonds has random tools to calculate lease payments but I would just like an answer on monthly payments with a down payment.

Car Negotiation Coach

Hey Evan, This calculator on Edmunds (the third one down) allows you to put in a down payment and see what your monthly lease payment would be. You can use TrueCar’s total price for a car whether you end up financing or leasing. You shouldn’t really discuss leasing (or financing) terms until after you’ve settled on car price anyway.

Moneycone

Very good resource! I need to keep this in mind next time I go car shopping!

DeniseGabbard@WriteandGetPaid

After spending 12 years in the auto business, I can tell you that most people do not even realize they can negotiate lease payments– costly mistake!

You definitely should go to the dealership fully informed, so that you know what a fair price for the vehicle is, what incentives are available, as well as a ballpark figure on a payment. (Rule of thumb is $20 per $1000 financed.) Like any other big purchase, researching ahead of time will pay off in great savings.

Tony @ Investorz Blog

Great post! Sometimes I find walking away from a deal that you find too expensive is the best thing to do. If the seller’s desperate enough, he’ll decrease the price down to the target you wanted.

m

Based on a recent experience with TrueCar, this article omits an important detail: it doesn’t work!

- Dealer 1: “We don’t have that car in stock.” They don’t have one of the top 10 selling cars in the US (base model Corolla) in stock?

- Dealer 2: Won’t give a price for the car selected, wants to upsell a higher model.

- Dealer 3: Non-English speaker? Can’t understand on phone.

Frank Meander

This system takes the salesman out of the equation. You have your price but do you know the features? Who is going to show you how to work them? Who do you call to set up your service appointments? All the best salesman are now working in industries with normal hours.
You get what you pay for.
You should find a good sales consultant and stick with them. There is value in that.

Car Negotiation Coach

@M- Sorry to hear you had troubles, but you do hit upon 3 very important points I address in this TrueCar review and in my free guide: How to buy a car at the best possible price. Yes, you will definitely get dealers that respond that don’t actually have the car in stock or try to upsell you. That’s why you need to do these things:
1- Cast a wider net and use another car price service in addition to TrueCar to talk to more than 3 dealers (like one of these online car price services). TrueCar is good for figuring out a target car price, but they will connect you with the same dealerships as any other car price service. Therefore, you just need to make sure you talk to 5-8 car dealerships, regardless of which car price service you use.
2- Once you get a price in an email, ask for a VIN# along with configuration options so you know exactly which car you are getting (and if it’s in stock) before going to the dealership.
3- Don’t talk to anyone over the phone! If you keep the process over email you can stick to the facts and there should be no language issues.

Thanks for your comment!

Doug Davis

Dealers sell cars, all the time, at invoice or below. TrueCar charges the dealer $300 for each car that is sold through them. Who ultimately pays this?

I was an Internet Director for two very large automotive groups. I priced every car on our website, Cars.com and AutoTrader.com with our very best prices. My internet team was only one third of the sales force but sold 70% of the new and used car sales.

Transparency, no negotiation, fast and easy transaction…sells cars.

Once you decide which car you want, go to AutoTrader or Cars.com and sort by price. Click through to their website and read the disclaimers. Make sure they aren’t charging an unreasonable fee for documentation and no exclusion for dealer installed options.

If you have a trade-in, use the AutoTrader Trade-in Market Place and print it out.

The internet is the future of the car business. There are some Internet Directors that are doing it the right way. Their business will continue to grow.

Car Negotiation Coach

@Frank- You’re right, it does take the salesman out of the equation and that’s the goal!!! You’ll get a much better deal when buying a car if you can stick to the facts and avoid the upsell. You can still ask any questions you have during the process.

And if you want to set up a service appointment, call the service department!

Car Negotiation Coach

@Doug, It’s refreshing to hear someone on the dealership side with your point of view! Transparency and easy transactions are the future. I’ve worked with a couple Internet Directors that share that mindset and I would buy from them again and again. Car shopping should be like purchasing a TV….it shouldn’t be so complicated!

As for the the fees you mention that is a valid point. However, I suggest using TrueCar along with other car price services to put you in touch with multiple dealers. From that point, the best price wins. If they want to charge $300 more then their competitor, then just go with your best price. The source of the car quote quickly leaves the equation and the dealership with the lowest offer becomes where you buy.

Doug Davis

Honestly, TrueCar is a joke.

I wanted to see which of my former competitors had signed up. The dealership that popped to the top has addendum labels of $1797 and a $395 doc fee. The price that TrueCar gives you excludes dealer installed options and doc from the price. That means that the customer is going to be hit nearly $2200 more when they arrive at the dealership. If they have a trade, they will be offered less than market value. TrueCar says, “print and bring to the dealership”. Lambs to the slaughter.

Again, go to AutoTrader or Cars.com and sort by price. Check out the disclaimers by clicking through to their website. Email the dealer for a drive out price. Call the Internet Manager to verify availability and set an appointment. My people were really busy and worked by appointment, only. That gives you a real total price in writing.

Done deal.

Frank Meander

@Car Negotiation Coach
So in your perfect world there would be no salesman? No relationship? No car guy? I see that might make sense for some brands but not all. People in the USA have a love affair with cars they are not a commodity like truecar says. You can get a great price with truecar but the dealer will likely raise the fees. If the margins are tight they will eliminate the salesman so new lower paid employees will now help with the delivery. No more need to explain the car or even test drive it. You get what you pay for I guess.
Do people realize the lowest price are the cars with manual trans? or steel wheels no bluetooth oh yeah keyless entry was not standard?
all this to avoid an upsell? Some people like to ask questions. I am not comfortable with the elimination of salesman. I guess they can close all the dealers and sell cars at Walmart.

Car Negotiation Coach

Hey Frank, you’re right! In my perfect world I wouldn’t be forced to deal with a salesman if I didn’t have to.

I’d like to have the option to bypass a salesman when I know what I want! Sure, for many folks a salesman can be a big help, but it shouldn’t be an obstacle they have to overcome when they don’t want help.

When you walk into Best Buy, do you want to be forced to negotiate with a salesman every time you want to buy something? Sure, you may have questions, but if not, dont’ make me jump through hoops to buy the TV!

Incidentally, manual transmissions are fun….I wanted one for my last car and I couldn’t find a dealer that had one…

Frank Meander

At Best Buy we pay the posted price for the TV. For the most part in retail we pay the price they ask with no question. What if the manufacturer said to the dealers stop hagling and make them all pay msrp? It is hard to compare a TV or a toaster to the second largest investment most people make. I enjoy your blog and I thank you for answering my post.

Doug Davis

Ya’ll are way behind the times. This is the internet age. There are dealerships that “get it”. If you follow my instructions (above) you can get a great deal without any of the back and forth.

Like I said earlier, I priced my cars with the very best price. I didn’t negotiate off of it. I had the best price. I simply didn’t have time to fool with customers that wanted to play games. There were 100 stores in the group and we were the volume Internet department.

Why wouldn’t you want to deal with a salesperson? My salespeople were the cream of the crop. They not only knew their products but the competition, also. My guys made good money. They were paid a salary with unit volume bonuses. They didn’t care what the car sold for.

You come in to the store with a confirmed price. You’ve talked to them when you set the appointment and should already feel comfortable. They are going to get you in and out as soon as possible because their day is full. Because they are successful, they will probably be around the next time you want to buy or if you have a problem.

You get a great deal and work with the best. Win Win.

Car Negotiation Coach

Hey Doug, you are preaching to the choir. That’s why people should use the Internet to buy cars. You work with a different type of salsman, the Internet Salesman who can provide a much smoother expericence than a traditional salesman on the car lot. If every Internet Department out there would price their vehicles like yours and behave transparently that would be fantastic!

Doug Davis

Coach, fear, apathy, disbelief and tradition will continue to be roadblocks to change. 80% of the dealers don’t have a clue. The rest are embracing the internet and seeing phenomenal results.

I have over 30 years in the car business but I do not think of myself as “old school”. The skills that made Sales Managers nearly indispensable, ten years ago, are becoming irrelevant. Knowing that, you can understand why they are not willing to change.

Frank Meander

Hey Coach,
When talking to Doug it does not seem like you want to “eliminate” the salesman. I understand the salesman must evolve. There is room for the sales consultant. Customers need to know the dealer is entitled to a profit. They still need to keep the lights on and pay their employees.

@Doug I agree with you people need to be willing to change. They will not be willing to be eliminated.

Car Negotiation Coach

Frank, You phrased this whole conversation best right there, “the salesman must evolve”. The type of salesman Doug described is the future. Unfortunately, there are still way too many high pressure sales tactics and little price transparency from a good portion of car salesmen. Get car quotes online and you’ll see what I mean….the prices you get will range wildly for the exact same make/model/trim car.

And when I say I’d like to eliminate the salesman, I really mean the traditional “hard-sell” salesman. As you say, a sales consultant would be much more appropriate in many cases. And in some cases (like my own and many other like-minded individuals), a simple check-out clerk or online shopping cart is all I need (assuming a good transparent price is offered up front).

Good discussion!

Doug Davis

Frank, The internet empowers both the customer and the salesman.

I refuse to play games. Most customers appreciate that but some just can’t help themselves. “The dealer, down the street offered me $1000 more for my car”. “The other guy is $1000 less”. Why are you here? Customers that lie consider it a acceptable if dealing with a car salesman.

Outside the car business, Purchasing Agents send out for bids on products that they need. If they disclosed those bids to the other vendors, like is suggested on this website, the vendors would “no bid” in the future. I find this to be totally unethical.

If a customer opens up by playing unethical games or with lies, all bets are off. I am under no obligation to treat them fairly. We can spot the “bid war” tactic a mile away. I am going to waste their time, jerk them around and definitely not sell them a car.

I outlined how to have a great car buying experience. Treat others like you want to be treated. If a customer opens with a lie or wants to play games, they need to expect to have their time wasted and get jerked around. I have held customers, in a dealership, for hours with no intention of selling them a car.

Greg

I just used true car to get a great price….1700 below msrp, add a little more bickering for the sake of the deal a finangling over the small fees and then add the tax, tag, title etc… I drive off lot with a brand new car, they get paid, I don’t feel ripped off – good enough for me…

Car Negotiation Coach

Glad to hear it Greg! I always like finding out when people are able to get good deals.

Kelvin Vankuwitz

Seems to me that this is just adding a middle man to the transactions. Dealers will want to recover that $300 from the buyer. Letting dealers fight for our business will keep them all trying. If the transaction is reduced to the only being about the lowest price, be prepared to expect a lot less in terms of customer service. These guys are not competing with the dealers, they are parasites

Pete

Thanks for the intelligent review of truecar.com. I used their service and would agree with pretty much every point you made. If they could add a service to help you find the best financing that would save people a lot of time to.

Car Negotiation Coach

Hi Pete, I agree completely. The only part missing is adding transparency to the financing aspects of a car deal. But I think that’s just a matter of time. I actually wrote a post about my predictions for the car industry and that’s one of them!

Mathu

Just bought a car using USAA which uses trucar data. Very easy. No problem. I did try to get a lower price. I did email 15 dealerships in a 100 mile radius and none offered a better price. With no trade in and an offer for 0% financing I did not have to haggle. Just turned down the warranty, alarm system etc.

Car Negotiation Coach

Mathu, sounds like you got a great deal, glad to hear it. Occassionaly one of the first couple offers does end up being the best price!

John

Car Neg. Coach,
Great, great, great website…you truly get it and are spot-on. Did the email thing in 2003 for a VW and got a great deal…probably didn’t do it quite as good as you spelled out above, but pretty good.
Thanks for sharing the info…when I buy in the next month/two I’ll be using your info!
Thanks!
JB

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