I recently wrote a post about avoiding car buying mistakes that covered the whole car buying experience including research, test-driving and car insurance.
Now I’d like to get a little more specific and point out critical missteps that will cost you money while negotiating a car.

1. Not realizing everything is negotiable! Beside the price of your new car, every aspect of a car deal can be negotiated.  This includes the value of your trade-in, your financing, dealer add-ons, and more.  Don’t assume any numbers the salesman provides are final.
2. Negotiating a car at the dealership.  If you negotiate at the dealership you will be subjected to all the car salesman’s tactics and ploys.  These guys negotiate every day of the week, do you?  If you negotiate via email, you’ll instantly counteract a majority of their high-pressure sales tactics.  They won’t be able to show you pictures of their 8 hungry children or use the good cop/bad cop routine.  Besides that, at the dealership you’re limited to a single offer which leads us to… 
3. Talking with only one dealership.   A car is a commodity and you get the best price on commodities when sellers compete.  Negotiating with multiple dealers is the key to finding the best car price.  After you get price quotes from several dealers, go back to each one and ask them if they can beat your best price.  If you only talk with one dealership, who do they have to compete against? 
4. Getting too many quotes.  When you request car prices from multiple car dealers, it’s important to keep the process manageable.  If you get 30 separate quotes from dealers across your state, it’s just too hard to keep track and manage responses.  8-10 quotes is about the most a normal person can handle.  At same time, make sure you get a minimum of 4 quotes to keep the bidding process competitive.  
5. Letting the salesman know your target price. There are several methods you can use to establish a target car price, but never, ever mention your target price to a dealer. This number is strictly a point of reference for you, to be used to create a simple budget or when to consider making the deal. If you mention a number to the dealer, he’ll never go below that number.  This is negotiating 101.  Why would you voluntarily set a floor for yourself?  
6. Wasting your time on bad or incomplete quotes.  Some dealers will respond to your price request with a partial answer or refuse to give you a quote unless you go to the dealership.  If you get responses like this, don’t waste your time there are plenty of fish in the sea.  Move on and focus your efforts on salesman willing to communicate.
7. Wasting the dealers time if you’re not serious.  Don’t negotiate until you’re ready to buy.  If you don’t have the budget for another month, don’t negotiate now.  By the time you’re ready to buy, the salesmen will no longer take you seriously.  If you spend days making a salesman jump through hoops for nothing, they probably won’t be as flexible the next time around.
8. Comparing apples to oranges.  If you don’t have dealers bid on the exact same make/model/trim/options it can be very tricky for you to evaluate which is the best deal.  When you get dealer responses for multiple option packages, it’s up to you to let them know the specific configuration you want quoted.  Besides that, you will lose leverage with the salesman.  For example, if you ask a salesman for a price on car with a premium package (heated leather seats, GPS, etc), but tell him he needs to beat a quote you received on an economy package (cloth seats, no GPS, etc), he will be difficult to negotiate with.  The most likely response will be to inform you that you’re not comparing apples to apples and that he can’t reduce his price. 
9. Don’t insult the salesman You catch more flies with honey. Be courteous and professional in all your communications.  Resist the urge to snap if a salesman does not beat your best price.  It’s not uncommon for salesman to find new deals (or be close to reaching a bonus) and contact you again with a new offer.
10. Not using everything in your arsenal.  So you’ve gone through the email price reduction process and you’re still not satisfied with the price?  Here are a few extra bargaining chips you may be able to use to get the price a little lower.
    1. Mention you’ll give them the best possible CSI (Customer Satisfaction Index) score.  A portion of a salesman’s commission payout is often tied to ratings you provide on customer satisfaction surveys.
    2. Offer to finance through the dealership. Dealerships make margin off financing agreements and are usually interested in providing you with a loan.  Just make sure they at least match other sources of competitive car financing you’ve found. 
    3. Servicing.  Ask them to throw in or discount a service contract for regular maintenance at their dealership or an extended warranty.
    4. Buy two cars.  This isn’t for most people, but it has been done before.  If you have a friend with similar tastes that is also looking to buy you can probably strike a better deal.  Tell the dealer it’s a package deal and I bet you’ll get a few more bucks knocked off both purchases.
    5. Bring in cookies or donuts! It never hurts to create good will.  Even if you’ve agreed on price before arriving at the dealership, you still need to negotiate financing and your trade-in.  If the whole office is commenting on how friendly you are, they’re much more apt to make a few minor concessions.

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