Shopping for a vehicle might be fun, but paying the price of the car itself never is. Luckily, you can get a great deal when you purchase a used car instead of a new car. Even last year’s model will be significantly cheaper than the current one. But wait, there’s even more good news. Negotiating is a part of the car-buying process, so if you find a car you like, but it’s a little out of your price range, you may be able to negotiate with the dealer for a better price.
How to Negotiate Used Car Prices
Know Who You’re Negotiating With
Some dealerships are open to negotiations, especially for used cars. They know that people are constantly shopping around for the best price when buying a car, so it’s always better to negotiate on a car than lose a deal. Here’s how you can negotiate used car prices.
If you’re buying a car from a private seller, you may be able to negotiate down the price if they need to sell the vehicle immediately. They may need to sell the car quickly if they recently bought a new car and would like to use the money on the old car’s sale to start paying off the new car.
However, if a private seller doesn’t care how long it takes to sell the car, you’ll typically have a harder time negotiating with them.
When setting your negotiation starting point, be reasonable and choose a set dollar amount that represents the maximum you’re able to pay. Don’t let the seller know what your max is so that you set your starting price below that amount and have room to work your way up.
If you only have $10,000 to spend on a used car and you come across one that’s priced at $11,000, the seller might give you the opportunity to make an offer. In this case, you should start around $9,000 to $9,500 so that you have room to go up to the max amount of $10,000. If the seller doesn’t budge, you can then let them know that your max is $10,000, and you’d be willing to take the car off their hands immediately.
You might be able to get a better deal when negotiating with a private seller than you would a dealer, but you also won’t get any warranty with the purchase.
Purchasing a used vehicle from a dealership comes with a warranty, and there are tons of options available. This means that you’ll have a better chance of finding something that fits your needs and your price range. Dealers also typically clean and perform an inspection of the vehicle.
Unfortunately, depending on the dealer you’re working with, negotiating the price of a used car down might be easy or difficult.
The amount you can negotiate off will depend on what the car is worth, your financing, and how long the car has been for sale on the lot. Luckily, you can prepare yourself to negotiate the price down by doing the following:
Check online resources to get an idea of the vehicle’s value
Readjust your budget as needed
Get quotes for similar vehicles from other dealers so that you can comparison shop and use those numbers to negotiate
If you happen to find a similar vehicle for sale elsewhere, but you’ve test-driven the used car, and like it, you can show the dealer the listing and make them more willing to negotiate with you about how much you should pay.
Remember, salespeople have confidence, which is why they’re so great at their jobs. You have to become the salesperson to sell the dealer on why they should slash the price on the used car for you.
Learn the Art of Negotiation
Negotiation requires knowledge of other cars similar to the one you’re negotiating for, along with bargaining skills. You should never accept the dealer’s sticker price as the lowest price possible because a used car has been on the road and has lost some, if not most, of its value.
Going into negotiations with the right approach is key. You never want to come off too demanding because then the dealer might not be willing to work with you at all. If you go in too soft, though, you can be seen as a pushover. Always be firm but respectful.
Make it obvious that you’ve done your homework and know what the car is worthwhile staying focused on the issue. A dealer may try to distract you by discussing things like financing, but this is a trap that you should avoid.
Clearly state your case as to why the dealer should accept a lower price. If you’ve seen the car sitting on the lot for weeks, remind them that giving you a deal would help free up space for another vehicle that will bring them in more sales.
Be Prepared to Counter
If you can’t come to an agreement with the dealer and they refuse to take anything lower than the sticker price, you may have to simply walk away. While this can be dramatic when you can pay the extra $1,000 on the vehicle, it gives your dealer one last opportunity to work with you or completely lose a sale on a vehicle that’s been in their lot for weeks.
If you change the salesperson’s mind by threatening to walk away, be prepared to immediately counter with your offer. From there, you can begin final negotiations.
Salespeople know exactly what to say to make you doubt yourself and change your mind so that you’ll pay more for the vehicle. However, by remaining persistent, the salesperson can’t wear you down. If your offer is refused, thank the salesperson for their time and let them know that you’ll be looking elsewhere for a vehicle. Make sure to give them your phone number and let them know to call you if they change their mind. You can then wait and see what happens.
By allowing the dealer time to think, they can weigh their options and come to the realization that it’s probably better to get the car off the lot instead of letting it sit there and waste money. If you don’t hear back within a few days, move onto the next dealership and begin the negotiation process again.
Use these tips to hone your negotiation skills and buy your dream car on a budget you’re comfortable with!
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.