The thought of negotiating for a used car gives most of us weak knees. We just don't have a culture of haggling in the United States. Buying a car is one of the last bastions of negotiation for the ordinary person.
Like anything else, practice helps, but we have some tips to shore up your confidence and help you get the best price you can on the vehicle you want. You have some things you can do before going to the dealership or private seller to take a few items off the negotiating table. Other tips help you maintain your cool and decipher various features and benefits offered by the typical dealership.
Now, let’s go buy a used car.
Decide Your Price Range
Know your price range before you hit the lot. If you have a firm idea of your budget, and why you have selected a specific range, it is harder to convince yourself (or for a salesperson to convince you) to pay more. Prudent consumers know their limits and consider each purchase as part of a continuum with other budget items and the amount of money available for each.
While you’re at it, arrange financing before you go car shopping. That way you will have a definite idea of how much you can spend and what the monthly payments are likely to be. Advanced financing simplifies your negotiations and lets you shop for a competitive interest rate without pressure to use the dealership’s financing, which may not be as good a deal.
Arrange Your Own Financing
Most dealerships offer financing, sometimes even with a deal like zero percent financing. However, that’s hard to find these days. You can probably get a better interest rate on your loan if you go through your bank or credit union, or shop around for the best rate.
Dealership financing tends to be on the high side when it comes to interest. Still, understand how the financing works so you can recognize a truly good financing offer if you hear one.
Identify and Pre-Qualify Your Target Used Cars
Note we said cars, plural, there. Don't get your heart set on a specific vehicle at a particular lot. That gives too much negotiating power to the salesperson. In other words, don't fall in love. If you do happen to swoon over a particular ride, don't let on to the dealership or the seller.
- Remember that no matter the class of vehicle you select, you will pay a premium for popular brands. Considering a competitor can help you save money on your purchase.
- Consider creating a list of at least three different cars and complete your research on each. Make it easy on yourself and stick to a single class of vehicle you need.
- Go online to determine potential pricing at a used car price calculator within each range.
Consider the mileage you find acceptable, remembering most vehicles accumulate around 12,000 to 15,000 miles per year of operation. Lower mileage cars will cost more while high mileage cars have a lower value.
Bring Your Research with You
In any negotiation, having evidence to substantiate your demands is a good thing. After all, you and the salesperson have opposing agendas. You want the car for as little as possible, while the dealership would like you to pay as much as possible.
- Look online for pricing guidance from a reputable third party. Get details specific to the make, model, and year you want.
- While you are online, check on the value of different trims and technology.
- Consider selling your own vehicle first as a private seller - you will likely get a better price. If not, check online for the typical resale and trade-in value of your current car so you can have a baseline when you speak to the dealership.
- If the dealer asks for a price that is substantially higher than your research suggests, ask why the price is different.
- Let the dealer know you can get the deal you want at other car lots that have the same thing you want, and be ready to go there if the salesperson doesn't budge.
The dealer should be able to justify any increase in price. If not, it’s time to walk.
Show It to a Mechanic
There are two ways to take advantage of a mechanic's knowledge. The first is to run your choice of vehicle by one to see if there are problems known in the industry about the car you picked out. A mechanic can tell you if they see a particular vehicle over and over for the same problem, and how reliable each automobile tends to be.
The second is to take the car you are considering to the mechanic for an overall checkup. Unless you build or repair cars yourself, a mechanic can find issues most of us wouldn’t recognize until too late.
Use any issues that are not deal-breakers to lower the asking price if this is the car you really want. Also, always test drive the exact car you intend to buy. Not one like it, the car you are negotiating over. People who buy without a test drive often regret it once they get the vehicle home.
Other Tips
Be polite. It’s a popular notion to stomp onto the lot and threaten to chop those salespeople down to size. Don’t do it. It just makes them mad and stubborn back. More flies with honey, you know.
On the other hand, don’t negotiate. Determine a reasonable price based on your research and hold firm. Tell the salesperson or manager you will happily sign the paperwork as soon as it reflects the amount you are willing to pay. Politely decline any counter-offer and be prepared to walk away. Leave your phone number and let them stew. If your offer is at all reasonable, they will call.
Follow up close to closing time on a weekend or at the end of the month. Most dealerships require their salespeople to sell a certain quota of vehicles each month. As the month’s end approaches, they may be more willing to do a deal to reach quota. Also, salespeople are only human and like to go home on the weekends like the rest of us. You might talk them down if they are in a hurry for dinner.
Follow up after a bad weather day. The traffic at the dealership will have been light, and people selling on commissions and quotas will want to make up for that. Be the one that will brave the snowstorm to buy a car, and they might kiss your feet.
Keep calm and don’t carry on. Carrying on, as we mentioned before, can cause the dealer to get his or her neck bowed. You won’t be able to get a deal no matter how hard you try. Remain calm and don’t let yourself fall in love with a car.
Do you feel ready to tackle buying a used car? Great! We would love to talk to you.
