Many car buyers are skilled negotiators who always get a deal at the dealership. That might be you. But Tesla doesn't have dealerships, so can you negotiate?
Tesla's policies towards buying and payment are unique and streamline the process for a lot of people. However, this comes at the expense of flexibility. A classic dealership "deal" isn't really possible with Tesla.
Tesla doesn't do any negotiating. Period. The showroom won't haggle because prices are fixed by the manufacturer. That includes the additional fees, and no amount of convincing will get a Tesla showroom to lower the price.
Tesla sells directly to consumers, and there simply isn't room for any movement on the price. The vehicles are already expensive to produce and subsidized, so the company couldn't move on the price even if they wanted to. That said, used Tesla buyers can haggle all they want with the seller or second-hand dealership.
The information in this article was sourced from Tesla itself and other reputable automotive news sites.
How Car Haggling (Usually) Works
Tesla likes to be different. So as you might expect, the buying process for a new Tesla is vastly different than what you'd encounter at a traditional dealership. Before we explain Tesla's negotiation policy, We'll explain how a traditional dealership haggling works. This can make it easier to understand why Tesla sales work differently.
A traditional dealership buys the car directly from the manufacturer and typically lists it for sale at a price close to the manufacturer's recommended price, or MSRP. Depending on the brand and the management of the dealership, this is usually a few thousand dollars more than the invoice (factory) price of the vehicle.
Unless it's an outgoing model, a dealership isn't likely to sell a car for less than the invoice price it paid to get the car. The best you can usually hope to get is a few hundred dollars above invoice.
So, what does it all mean? It means that dealerships have a fairly substantial amount of wiggle room between the list price and the price they need to sell it for it to make a profit. This is where haggling comes in, and you can usually leave the dealership with the car for a price that's within this range.
Sometimes, manufacturers offer additional incentives that cut into their profit margins but allow dealerships to sell cars at even lower prices. These incentives are seasonal, and dealerships typically don't know about them in advance. Now that you know why dealerships allow haggling, we'll explain why Tesla works differently.
Can You Negotiate the Price of a New Tesla?
Nope. There's not a single circumstance in which anyone can negotiate the price of a new Tesla from an authorized showroom. The price is the price, the fees are the fees, and there's no way around it.
Picture buying a new Tesla like buying a phone or computer from the Apple store. You wouldn't dream of trying to negotiate the price of an iPad because the scanners in the store wouldn't let employees take any less than the full price. Like Apple, Tesla sells cars directly to consumers and bypasses the dealership altogether.
Why Are Tesla Prices Fixed?
Unlike traditional dealerships, which purchase cars from manufacturers and turn an additional profit, Tesla showrooms don't make any additional money from selling cars. They're simply distribution centers that are owned and managed by the manufacturer.
There are several reasons why Tesla can't budge on the price. For one, there's no wiggle room on these vehicles. Margins are tight as it is, and when combined with government subsidies, Tesla really can't take a hit as a small dealership can.
Plus, allowing leniency would be an accounting nightmare of mythical proportions. How would the company account for all the minute price variances on the millions of vehicles at sales? Regular dealerships move cars in a volume of dozens or hundreds per month, whereas Tesla moves tens and hundreds of thousands.
Traditional auto manufacturers sell their cars to dealerships in bulk and fix prices. To the dealership, the price is the price, just like it is for consumers at Tesla. The only difference is that Tesla passes the fixed price to you, and you get it at invoice price. In other words, you get the dealership employee discount.
Can You Negotiate For a Used Tesla?
But what about used Tesla cars and SUVs? Is it possible to negotiate the price of a pre-owned Tesla vehicle? Absolutely! Used Tesla vehicles are sold primarily by dealerships that take them in on trade, and by private sellers who aren't bound by the rules of Tesla.
If you're buying a used Tesla from a car lot, your ability to haggle will depend on the policy of the dealership (or, more realistically, how convincing you are with the sales manager). Dealerships then claim to be "no haggle "often haggle anyway with some customers, but this is not the case with brand new vehicles sold at Tesla showrooms.
Negotiating for a Tesla with a private seller is just as variable and depends on your ability to convince them to drop the price. One thing is certain—you have a much better chance at convincing the most stone-faced private seller to negotiate than you do at a Tesla showroom.
Does Tesla Ever Offer Discounts?
Tesla typically won't offer incentives as you'll find at a GM, Ford, or Dodge dealership. Domestic automakers are famous for offering $5,000 and $10,000 rebates during certain times of the year, but Tesla won't ever be caught doing anything like that.
Tesla may occasionally drop the price of a vehicle, but that's about it. However, there are some indirect ways to save thousands on a brand new Tesla. These come in the form of state and local eco-friendly driving rebates.
States like California are famous for offering prospective car buyers mountains of cash to encourage them to switch to electric. These rebates come and go, but they've saved people thousands of dollars on electric and hybrid vehicles. Some of these rebates require you to switch from a less efficient car.
Like the dollar amounts, the rules are always changing, and they vary widely between locations. But be sure to check if you qualify for any federal, state, or local government incentives before purchasing a new Tesla.
Can an Agent Negotiate the Price of a Tesla?
Many people who don't like the high-pressure dealership environment choose to hire an agent to do the dirty work for them and to get the best deal on a new car. Some people think that this strategy could work at Tesla.
They may have a well-connected or experienced car buying agent who thinks he can put off. But don't bother, it won't work. Elon Musk himself may be able to get you a discount, but the showroom itself simply isn't technologically capable of selling the car to anyone for anything less than the price on the sticker.
However, hiring an agent to find (and negotiate for) a used Tesla is an excellent idea. Experienced car buying agents can track down the best version of the car you want anywhere in the country and get it for the best possible price. In addition to their fee, of course.
How to Get a Late-Model Tesla for Less Than MSRP
But all hope is not lost! There is a reliable (albeit rare) way to get a virtually new Tesla for less than the sticker price of the car.
Most Tesla sales showrooms have a few models on hand to use as demo cars and for official company transportation. These vehicles are swapped out regularly and can be purchased at discounted prices with extremely low miles.
Granted, these vehicles are not brand new. But if you want a Tesla from the current model year for less than the sticker price, it's about as close to new as you can yet. These vehicles hardly ever have signs of use as they're maintained at the showroom and used sparingly.
About THE AUTHOR
I've spent many years selling cars, working with auto detailers, mechanics, dealership service teams, quoting and researching car insurance, modding my own cars, and much more.Read More About Charles Redding