The Red Devils are reportedly only prepared to spend half of Dortmund's valuation for the England international.
But United legend Neville thinks the club must fork out more to sign Ole Gunnar Solskjaer's top target.
"I think you might have to pay a little bit more than that, Ole. That's the problem because some clubs think that other clubs will get desperate and sell players on the cheap. But I'm not sure you can bully clubs like Borussia Dortmund," Neville told Sky Sports.
"What these young lads have demonstrated in the last two or three years is that they aren't going to be hoarded by these big clubs that don't give them football matches.
"It's been proven that lads who have moved away and shown a bit of courage to get some football have benefited from it. It was something at the time you questioned: 'How can you leave Manchester City? How can you turn down the opportunity?'
"But they weren't putting players in the first team Manchester City at that time and what he's done is give himself a wonderful experience and furthered his career."