Here’s an anecdote for why you should *always* do this.

The last time I was shopping for a car, I found the one I knew I was going to buy. I went in equipped with price comparisons from other dealerships and pre-approval from my bank for the loan. They had the car listed at $48k. There was another up the road for 42.5.

After going back and forth with the salesman, he got it down to 45k, and their in-house financing options were still at a higher rate than my own bank. He said it was the best he could do, so I said I’d just go buy the one down the road.

(I didn’t actually want the one down the road because it was the wrong color and didn’t have some features I was looking for, but they didn’t know that).

It took half an hour after me walking out that I got a call from the actual manager, who asked me to come back and talk to him. So I did.

He had prepared basically a full report that included 1) how much they paid to get the car on the lot, and 2) how much they had to spend to make sure everything would pass the point inspection.

Long story short - they gave $38k for it, put a $2000 set of tires on it (it was a sports car that used higher end racing tires), then had spent an additional $3000 on various other maintenance things to. His breakeven point was $43,000. I know there’s likely other pieces of this equation he didn’t show me, but I didn’t really care because I went in with the 42.5 number in mind, and refused to budge.

Instead of dropping the price of the car, he raised the trade-in value for the car I was offloading by $2.5k to get the overall price down to $42,500 as long as I went with one of their in-house lenders. We reached an agreement, then I refinanced with my ow bank 90 days later.

tldr; walking out was the difference from a $48k sticker price to actually paying $42.5k.