Should you tell a car salesman how much you can afford?

Don't say you want the monthly payment to not exceed a certain number. A car salesman tries to maximize profits and will simply artificially reduce your payment by extending the life of the loan or by requiring more money up front as a down payment. Even though the monthly payment is the most important factor for many buyers, you should never discuss this with the dealer during negotiations. When asked, simply respond by saying probably.

If you continue to be harassed, tell them that you are interested in financing but that you first want to agree on the price of the car. Whether the salesperson shows you a Ferrari or a Chevy, their answer should always be to point out the car's problems and faults. Saving enough money to buy a car with cash is certainly more difficult than getting a loan, so people assume that they should be rewarded for this achievement. I generally advise my friends to buy from Hyundai, Toyota, Lexus and Mazda, and avoid cars from Italy and the UK at all costs.

Buying a new car and exchanging an old one are two separate transactions, and it benefits you to make them in that order. Even if you're dying to buy the vehicle, tell the seller that you might be willing to buy it if you get a good price for it. If they think you're going to finance, they estimate that they'll make a few hundred dollars in additional profits and therefore be more flexible with the price of the car. It may seem contradictory, but while the monthly car payment is the most important factor for many buyers, never tell the dealer that's what matters to you.

When negotiating a deal, especially the price of a large purchase, such as a car, knowing what not to say is just as important as knowing what to say. Dealers love to quote cars in terms of monthly payment, leaving the purchase price out of the equation until documents are signed. This one really sneaks up on customers because, by the time they've negotiated a great rate for a new car, they're so eager to get rid of their old car that they're left with the first price offered. Once you decide and accept the price of the new car, you can tell them that you changed your mind and would like to pay cash.

If the dealer asks you how much you're comfortable paying each month, simply say you're not ready to talk about it until you've determined the total price of the car. In fact, more than 84 percent of people who buy new cars finance the purchase, according to Consumer Reports. Instead, the ultimate goal is to get the dealer to take such a low price that they are willing to pay for the car in exchange for the opportunity to get the metal out of the lot. My personal recommendation is that you buy a gently used car from a manufacturer known for reliability, such as Hyundai, Toyota, Lexus, or Mazda.