How to negotiate the price of a used car
Whether you’re negotiating with a dealer or an individual, buying a used car is a process fraught with potential pitfalls. But that process hasn’t changed much in the past 75 years, and there are a number of proven steps and techniques you can follow to ensure a happy outcome.
First, it’s important to know exactly what you’re buying and its fair market value when sold by a person or dealer. Second, you’ll want to put yourself in the right mindset to negotiate, which means unbiased logic, sticking to the facts at hand, and most importantly, not being afraid to say no or demand what you want agreement.
Step 1: Know what you are buying
Clearly, an immaculate, low-mileage 2012 Toyota Camry is worth far more than an abused, high-mileage example owned by a heavy smoker with a lead foot. You need to know what you’re buying, and the process is quite different when you can see and inspect the car. First, find the range of values on the specific model you are interested in. A quick online search of resources such as Kelley Blue Book or NADAGuides can help you get a realistic picture of its value. After that, it’s time to go see the car itself.
If you’re buying from a dealership, try to ignore happy words from the salesman or stories about how the car belonged to a friend and focus on what’s in front of you.
Assuming a visual inspection and test drive is possible, start by carefully examining the car. Don’t be fooled by the quick detail work that most dealerships do to make used inventory shine. Check for rust, variations in paint, and gaps between panels (both of which can indicate damage from a past accident).
Many people skip this step, but it is vital: get under the car as far as possible (bringing a drop cloth for this purpose is a good idea) and look for rust (especially in vital frame parts) and oil leaks. If you can, hire a mobile mechanic service to perform an on-site inspection. These services are widely available in major metropolitan areas and can be booked through smartphone apps.
Inside the car, look for splits in the upholstery, worn pedals and carpets (which may indicate higher mileage than the odometer), cracks in the dashboard, and working instruments. Make sure the locks, horn and lights work properly.
With the car started, check the exhaust for excessive smoke. Watch the dipstick for any water in the oil and the water for signs of oil (i.e. a bad head gasket). While driving, find a long straight and briefly take your hands off the wheel to make sure the car is going straight. Brake hard and see how the vehicle reacts. Look for vibration in the steering wheel or bodywork, especially on the highway. Ask if a CarFax or similar has been done, or get one yourself with the VIN number.
Step 2: Negotiate like a Vulcan
Suppose the car passes all these tests and you want to buy it. In the beginning, don’t throw away the highest price you’re willing to pay. First, ask the seller, whether a reseller or an individual, how negotiable they are. If they say, “Take it or leave it,” then you have to decide if the car is worth the asking price.
Let’s say you’re hoping to get the used car in question for $10,000. Always let the owner quote the initial price rather than offering one first. Starting at $8,000 for a starting bid for a car offered at $12,000 is not unreasonable.
Here it pays to think like Spock of star trek– all logic, no emotion. Don’t worry about pleasing the other party or being polite. Many potential buyers are afraid to negotiate, out of fear of embarrassment or fear of social expectations. Haggling isn’t really an American tradition – as it is in most other countries around the world – but if you accept the first price quoted by the owner, you’re no doubt leaving a fair amount of money on Table.
This is an old process. Owner says $12,000. You say $8,000 and the owner says $11,000. A compromise is reached at $10,000. The owner upped the price for you, so he’s happy. And you’re happy because you got the car at the price you wanted.
If you’re really not going to get the price you want and the bill is just too high, don’t be afraid to say no and walk away. At dealerships, in particular, walking away might net you a lower number when heading for the door. But if it’s not worth stretching your budget and you’re not looking for an obscure classic car, another similar vehicle will probably be along for too long.
here’s how not to do it. I was helping a friend buy a cream Jaguar with an asking price of $8,000. I thought it was high, but the car was worth it. I was about to bid $6,000, which probably would have been accepted, when my friend said, “That’s a really nice car, and I’m happy to pay the full amount. And that’s what he paid for.
Step 3: After the sale
A few other factors can play into the selling price. Does the dealer even offer a short-term warranty on used cars? Always ask if the owner/dealer has any spare parts for the car that have not been fitted and may be in the back room. There’s also the time and cost of registration and the logistical hassle of picking up the car once you’ve purchased it. If you’re buying from a car dealership, chances are they’ll save it for you and you can drive away once you add the insurance.
If not, you’ll probably have to make two trips. Get the car’s VIN number so you can register it yourself and get insurance coverage. A trip to the DMV is probably possible here, especially if you’re in a rush. It’s not always possible to get a title on older cars – some states don’t issue them. You can just get a bill of sale. Equipped with plates, insurance card and gray card, you can now recover the car.
Drive home carefully, you’re just getting to know your new car!