On as a second-half substitute, Garcia capitalised on terrible Madrid marking to nod home from point-blank range in the final minute of stoppage-time to record Alaves's first home LaLiga win over Real Madrid since 1931.
It was nothing more than Alaves deserved on the balance of the game, with Madrid's lacklustre attacking play coming back to haunt it once again.
Julen Lopetegui's side has now gone three LaLiga matches without a goal for the first time since March 2002, and has lost three of its past four fixtures in all competitions.
Madrid is suffering its worst goal drought in 33 years after this result and has now failed to score in four consecutive games in all competitions, having also drawn blanks against Sevilla, Atletico Madrid and CSKA Moscow.
Madrid last went four matches without scoring in April 1985, during a streak that ultimately stretched to five fixtures.
After the international break, Los Blancos will aim to end its barren run in a home game against Levante on 21 October (AEST).