By Imani Moise
Tomi Mikula has made a business out of talking down the price of car purchases.
After The Wall Street Journal recently profiled the former auto finance manager and his company, readers wrote in with all sorts of questions. We asked him to answer a few -- and teach us some dealer jargon along the way. We lightly edited his responses.
How big of a discount do you usually ask for at the start of a car negotiation?
A lot of people think that you should start high because you're going to meet them in the middle. But if you start really high, a dealership stops thinking you're realistic.
If you want a good rule of thumb, I say 7% to 10% off of MSRP* is normal, minus any automaker incentives. That's the lowest a dealership will go. So I'd start right at my top number, and I know I might go down to 7% in the worst case, but I'm trying to get that 10% all day.
*MSRP stands for manufacturer's suggested retail price, or the sticker price set by the automaker before discounts or incentives.
(A spokesperson for the National Automobile Dealers Association said in a statement, "Dealers strive to walk each customer through the process to get them a competitive deal that addresses their specific needs -- after all, their goal is earn their customers' future business.")
How important is it to learn dealer lingo?
One of the things that makes car buying so stressful for people is that they overcomplicate it. We can talk about floor plan assistance.* We can talk about holdbacks.* We can talk about invoice.* But in reality, none of those things matter.
To get a good deal, all you have to do is take one number and compete it against another number and keep doing that until you're at the lowest number.
*Floor Plan Assistance is money automakers give dealers to help cover the cost of financing and holding inventory on their lots.
*Holdbacks are the portion of the car's price that manufacturers pay back to dealers after the sale.
*Invoices represent the amount the dealer is billed by the manufacturer for a vehicle, though actual costs are often lower due to incentives and bonuses.
How many dealerships should buyers be reaching out to, and do they need proof of other offers to negotiate?
My goal is to have a few local options and a few out-of-state deals. Our minimum that we're ever going to call on a deal is six. So we'll call six dealerships every time, no matter what. There is no maximum -- I've called 150 to 200 dealers on a car before. But if I find a great deal, and it's on call number seven, I'm going to call you up and say, "Hey, I think this is an amazing deal. You should take it, and I'm going to give you all the evidence why."
Many dealerships have stopped asking for deal sheets* from us because they feel confident we're not lying. But if you're a consumer, expect to show that sheet, because they're probably not going to just trust you for your word; in the industry, they like to say that "Buyers are liars."
*Deal Sheets are a written quote from a dealership showing the vehicle price and itemized fees, used to compare offers or negotiate with other dealers.
The finance office is where many buyers encounter extended warranties and other add-ons. How do you approach those conversations?
First off, understand that the finance manager is the best salesperson in the entire building. They're very good at what they do. They're going to keep pitching you at lower and lower prices, and you have to keep saying no.
There's going to be a point where you almost see defeat in their eyes. That's normally a good sign that you got the best deal. Make sure you negotiate the cash price. They're going to keep converting it to monthly payments.
If you want a real power move, you can always take that cash price and call another dealership while you're still in the office. Say, "I'm trying to buy a warranty on the new car I'm buying right now. How much is your warranty?" I promise you, if you do that, that finance manager is just going to drop to the lowest dollar.
At what point in the process should buyers allow a dealer to run their credit when shopping for financing?
You should always walk in knowing what your credit score is, but you shouldn't allow anybody to run your credit or do a credit application until you have agreed to buy that car and you've signed and agreed to the price.
A lot of dealerships will try to do it before the test drive. Some dealerships will do it the second you walk in. If you have a lower score, the first step is getting preapproved, ideally through your own bank, which knows your history.
How can you make sure dealers don't add surprise fees in the final transaction?
One of the most important things we talk about is verifying the paperwork. Because the car buying process is so long and most people are so tired at the end, they just sign. And you'll notice that the finance manager will stop explaining paperwork and just say, "Sign, sign, sign."
What you want to do at the very end is verify every line in the purchase agreement and bank contract. Those are the two most important forms. Read them line by line, pull out the deal sheet you agreed to. If there's anything that's off, question it and make sure that every fee lines up. If your taxes are off by one dollar or two, that's normal. But if there's a new fee you didn't see on the first form, question it.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
March 20, 2026 12:00 ET (16:00 GMT)
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