What should I negotiate with dealer first, selling price or directly monthly payment?

I just began an email talk with a local dealer. At some point, the dealer asked me “How much down payment can you do and at what payment would you say yes to leasing an Accord LX for?” Should I directly talk with him about monthly payment or first negotiate on selling price? Thanks!

Some more contextual info: Before this, I declined his credit report pulling and he then assumed that I would be qualified for the best terms.

MSRP first

Thanks! I am a little confused. Do you mean the selling price? It seems MSRP for Honda Accord LX 1.5T is always $24650.

I personally prefer to go with pre-incentive dealer discount, however, in theory it shouldn’t make much difference. Before talking to the dealer, you should know what a pre-incentive discount means in terms of monthly and DAS, so if you want to talk monthly, by all means. Just keep in mind that you must fix the DAS amount before having that conversation.

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Selling price pre incentives…

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I just print out a deal here, and have dealer to match it. simple for me.

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It’s important to understand the programs for the car you are dealing with, then you can build an educated offer, and negotiate on your own term.

Example: I was working a deal with a customer that kept asking for 12% off after every correspondence. After multiple back and forth emails I asked the question “What is the max drive off and payment you would take this car at?”. They responded with $X,XXX drive off and $XXX. Even if I had discounted a brand new car +20% off of the selling price would not meet the goals he was trying to achieve.

Long story short learn what programs you qualify for, learn what incentives can be used, and find out either through the forum or through other dealerships what discounts are realistically possible then you should be able to score a great deal.

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Don’t negotiate on payment unless you know the program well enough to have an idea how they will arrive at your desired number.

Example: low-mid spec 3 series in TX, 1% is generally a good deal in the absence of tax credits.

I’ve never personally understood why you wouldn’t want to negotiate on the monthly price, but I’m new to this, so I’m sure i’m missing something.

If you know the vehicle you want and the price you want to pay per month, I’m not sure why it matters how they get there, whether the money factor or residual or selling prices changes.

A couple reasons…

You need to know all the other information anyway to determine what a good monthly price for the vehicle is.

Dealers love to negotiate monthly price and hide expenses in a higher DAS. You can always get to any monthly price you want by increasing the down payment.

There are many dealers that have a fear of low monthly payments. I’ve seen cases where a salesman is calibrated to thinking there’s no way a certain car could be under $500 a month and if you say you want it for $350, they’ll laugh you out. But negotiate a big discount that they agree on and watch a $350 a month payment fall out of the math in the finance office, and they’re amazed.

The monthly payment is the byproduct of the equation, not the variables that you can control.

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This has 100% been my experience as well. When I do hacks, I’m trying to get a crazy monthly.

Recently I did some work on an XT5 Luxury demo for a friend around $300/mo. Obviously I couldn’t ask dealers to do $300/mo because odds are this type of deal has never been done and I’d get laughed at/ignored, so I had to try to back door it by negotiating selling price before incentives.

I got several dealers to agree to selling prices around 20% off MSRP before incentives, which is fantastic, but not a single one would commit to a lease with that selling price without jacking the MF to the max and adding a bunch of BS in. Why? Because it would have been <$300/mo for a $50-55k XT5 which they CANNOT COMPREHEND. Usually I am able to get at least one dealer to strip out the BS and do the lease, but in this case none of them would. It’s crazy to me that a dealer would sell a car $41k cash but refuse to lease it at the same price without trying to make another $4-5k on the front and back ends, but it seems to be a common occurrence.

FOLP = Fear Of Low Payments. It’s real.

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You can negotiate monthly as everyone has stated if you understand how to get there. If your asking for a monthly that is unobtainable you will never get anywhere with the dealer as @Samson stated. @electric advice is very sound and you will see experienced hackrs start with “here is the deal take it or leave it”. The reason is because they understand every nuisance of the deal and what the dealer would need to do to get there.

I just found a deal in honda.com (https://automobiles.honda.com/tools/current-offers?zipcode=61801&offer=090111c081d190bd-CV1F1KEW). Here are some questions.

  1. It says “$1,499 total due at signing.” Is it only down payment? Do you think it also includes acquisition fee?
  2. One local dealer said he could offer the same deal as honda.com (249/month and 1499 das). I am planning to make it $249/month and 0 das. Is it too ambitious?

Thanks!

Go here first to verify the money factor and residual for the car you’re looking for, as well as incentives.

A quick look would suggest .00056 MF and 56% RV for a 2019 Accord LX, 36 months/36k miles, but verify for your zip code. It looks like there’s also currently a $750 factory to dealer incentive, and I believe a $750 loyalty right now if you currently have a Honda.

Once you have that, head to the Leasehackr calculator and move some numbers around, mess with the selling price, adjust for your states taxes, gov fees, etc. to see how offers you receive stack up.

Don’t overlook taxes, gov fees and doc fees. The offer you posted is a national offer, it won’t include any of those. So if you want a fair comparison adjust your calculations accordingly.

Good luck!

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Thanks Dennis885!

  1. If I understand correctly, doc fees is determined by dealer but not that negotiable?
  2. I had a Honda Civic but it was totaled…

Of course they’ll offer the same deal as the Mfg website as these are usually poor deals to begin with.

Start by picking a specific car to work a deal on, educate yourself on any incentives you’re eligible for, interest rates (MF, or APR if the captive works like so), and then start with a sale price that’s aggressive yet still within reason before those incentives. Alternatively do the calculation yourself and present a monthly payment and DAS that will work within the program’s parameters and shop it around.

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The doc fees vary by state. Some states have set a maximum dealers can charge while others have no limit. You should be able to google the normal doc and dmv fees for your state and plug them in a calculator. If it’s a few bucks off it’s not like it’s going to make a huge impact to your monthly.

Like others said worry more about the the selling price before incentive first.

Dealers here are advertising zero down (including the VA sales tax upfront) for $239 for the same car. So you see theres room. You need to get the MSRP down (before applicable incentives) and then get base MF and Residual

This, absolutely. I did this with the Ioniq I just leased. They flat out told me that there’s no way I could lease that car for under $200 with nothing upfront. I had already done all the math and knew it was possible, so I drew up the whole deal for them to show that they could get to my number with a certain discount off MSRP. The sales manager looked at it for 30 seconds, agreed that they could do that much discount, and the deal was done. Had I not spelled it out for them in black-and-white, I don’t think they ever would have taken the time to figure out if they could make the deal or not.

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