Negotiating on a used car

[debian0001]

How much can you usually get a car dealership to budge?

Say they want 19000 listed, can you get it down to 16000 or is that too much? What are some tactics you use?

 

[XavierMace]

I would assume it's going to depend greatly on the vehicle.

 

[Gillbot]

How much can you usually get a car dealership to budge?

Say they want 19000 listed, can you get it down to 16000 or is that too much? What are some tactics you use?

I decide what I want to pay for it based on what I consider fair market value and i'll email or call the dealer with my offer so I don't waste either parties time. I leave my contact info and wait for them to return with their offer. If it's close to what I want to pay I contact them back, if not I move on because it's unlikely we'd come to an agreement.

EDIT: The #1 rule is, don't be afraid to say no or walk away.

 

[GoodRevrnd]

Relevant.

 

[kitatech]

Good link Rev....

Everyone has their own view of used car buying....here's mine...

The two most important factors:
1. How badly does the dealer want to sell it?...
2. What is the demand for the vehicle?

You can judge the latter by how checking various websites to see how many of that same model is on the market and what the asking price range is.....

...how long the car has been on the lot...see CarFax report for when it was declared "for sale"...the longer the car's been on the lot the more flexible the dealer may be on the price... CHECK WEBSITES (INCL EBAY) TO SEE IF THE DEALER HAS LISTED IT ON MORE THAN ONE AT DIFFERENT PRICES...then bid 25% under the lowest price you can find...that should give you both room to wiggle and waggle to an agreed-upon price...

As for #1, you have to listen to the sales pitch...the more they press, the more THEY want to sell, the more they see YOU as their best chance to close the deal....the more they need YOU

....if you hear something like this "If I can get you into this car for $xx,xxx, can I have your business today,".... you can deal....this is more likely to be the case for an unpopular car, model, color, configuration, etc...

...OTOH if it's a popular easy to sell model, you shouldn't feel much pressure to buy because the dealer will feel that the car will sell easily...

Good luck

 

[Tweak155]

Good link Rev....

Everyone has their own view of used car buying....here's mine...

The two most important factors:
1. How badly does the dealer want to sell it?...
2. What is the demand for the vehicle?

You can judge the latter by how checking various websites to see how many of that same model is on the market and what the asking price range is.....

...how long the car has been on the lot...see CarFax report for when it was declared "for sale"...the longer the car's been on the lot the more flexible the dealer may be on the price... CHECK WEBSITES (INCL EBAY) TO SEE IF THE DEALER HAS LISTED IT ON MORE THAN ONE AT DIFFERENT PRICES...then bid 25% under the lowest price you can find...that should give you both room to wiggle and waggle to an agreed-upon price...

As for #1, you have to listen to the sales pitch...the more they press, the more THEY want to sell, the more they see YOU as their best chance to close the deal....the more they need YOU

....if you hear something like this "If I can get you into this car for $xx,xxx, can I have your business today,".... you can deal....this is more likely to be the case for an unpopular car, model, color, configuration, etc...

...OTOH if it's a popular easy to sell model, you shouldn't feel much pressure to buy because the dealer will feel that the car will sell easily...

Good luck

This has most my tips. I also talk up my trade-in.

But as was said, walking away is a great tool. Example on my last car purchase:

I went in wanting $8500 for my trade in. They offered me $7000 (I didn't tell them what I was looking for). They had already lowered the price of the vehicle I wanted from $23,700 to $22,300.

It was close to closing time and after I said I wanted $8500 on my trade in they bumped it to $8000. I said well I'll think about it, thanks.

They called me the next day and said ok look, we'll give you $8500. I told them that's great but I have other cars to look at today.

I went there later and test drove it again and they asked me what they could do and I told them to knock sticker down on the vehicle another $400 (it basically made my OTD price a flat price of $15000 after taxes, fees, etc) and they said deal.

So if you do all the math, even taking for granted they advertised a $22,300 price before I walked in, I got another $1900 out of the deal by talking up my trade in and lowering the price just by saying "I don't know" lol.

I probably could have still done better, but I didn't do too bad. My guess is I may have been able to get another $500 at most out of it, but I could be wrong. I really don't know what dealer costs add up to (detailing, photos, cost of sitting on lot, etc), but I think we both got "paid".

 

[Scarpozzi]

Simple.... Just remember there are tons of used cars out there. If you don't get it for the price you think is fair, walk.

If you make an offer, give them a deadline of 5 minutes to give you an answer. Ask for everything in writing and don't let them sell you warranties or any security scams when you buy. Dealerships here are notorious for that kind of thing. Just do research and make sure you know what you're buying. Look at prices on carmax and then cars.com and remember that carmax is typically higher priced that most independent dealers.

I like to put a dollar value on the core car....then put a dollar value on features, mileage, condition, etc to get more accurate.

 

[JCH13]

As with buying new cars: if you show up with a check (cashiers or credit union or the like) and ask: "I will pay this many dollars for this car OTD, deal?" you will only pay the price you want.

If they bite, hooray! If not, you can just walk away. It's amazing what they'll put up with for a guaranteed sale.

 

[Via]

Cash is King. I bought a used car a dealership had listed at $8500 for $6500 by writing them a check. That's about 75% of the listed price. You're percentage is higher than that.

I know $16000 is quite a bit more cash, but if you have it what is there to lose?

 

[kitatech]

Cash is King. I bought a used car a dealership had listed at $8500 for $6500 by writing them a check. That's about 75% of the listed price. You're percentage is higher than that.

I know $16000 is quite a bit more cash, but if you have it what is there to lose?

Exactly....and exactly what I paid for my 05 Camry...I actually offered $6k and they came down from $7.5k to $6.5k...
I got DP from insurance and rest from CU...an easy buy...

 

[debian0001]

I could def pay 16,000 but I want my cash to be liquid right now til I see how my job is.

Thanks for the advice everyone.

 

[kitatech]

I could def pay 16,000 but I want my cash to be liquid right now til I see how my job is.

Thanks for the advice everyone.

You should at least check your local CU for the car loan % you're eligible for....

 

[Gillbot]

When I went to buy my Jeep, I told them I could pay cash so tell me what price if I write you a check. They showed me the invoice and told me they'd do 3% off that which is better than my affiliate discount. I said ok fine, give me that price with the 0% financing from Chrysler and we'll sign the papers. They hesitated but as soon as we started to walk they agreed. Getting a Wrangler can be tough since they are pretty in demand and often sell at MSRP.

 

[kitatech]

When I went to buy my Jeep .... Getting a Wrangler can be tough since they are pretty in demand and often sell at MSRP.

Yes, high demand does make negotiating more difficult....shopping at the end of the month helps too...and the early days of Sept too....sales want to meet quotas....

 

[Fritzo]

I always print off the bluebook price, the wholesale price, and come up somewhere in between depending on the condition.

 

[Tweak155]

One additional tip I just thought of. If you want to go through a dealer, I find that going to competitor lots starts me off at a lower price to start off.

For example, if I wanted a Ford Focus let's say, I'll skim the GM lots for used Focus vehicles. I find on average (around here) they are ~$500 - $1000 less advertised but have a way lower selection to boot. But if they have the car you want, it's like hitting a small jackpot. This is because your negotiations already start at a lower point.

An even bigger win is if in that same scenario you are trading in a GM vehicle, as they are more likely to move it.

 

[olds]

Cash is King. I bought a used car a dealership had listed at $8500 for $6500 by writing them a check. That's about 75% of the listed price. You're percentage is higher than that.

I know $16000 is quite a bit more cash, but if you have it what is there to lose?

The dealership doesn't care how you pay. They either get cash from you or a bank.

 

[Via]

The dealership doesn't care how you pay. They either get cash from you or a bank.

Maybe not always, but they certainly cared in my case. It's the only time I've ever paid cash for a car, and the fact that I offered to pay cash definitely lowered the price.

I didn't go into the negotiation expecting to pay cash, and iirc we were stuck around $7500. That's when I made the cash offer. I told the guy something to the effect of "$6500 is all I can spare".

 

[JCH13]

The dealership doesn't care how you pay. They either get cash from you or a bank.

Everyone's money is green. The difference is that when you show up able to pay x number of dollars, with that amount in-hand, they don't have put in any effort trying to up-sell you anything. If they want the sale (which is easy money for them at that point) they make it work.

 

[MixMasterTang]

Everyone's money is green. The difference is that when you show up able to pay x number of dollars, with that amount in-hand, they don't have put in any effort trying to up-sell you anything. If they want the sale (which is easy money for them at that point) they make it work.

Exactly, sales people are lazy. If they can spend 2 minutes and make a $500 profit it's much better than for them to spend hours and still not make any money.

 

[OILFIELDTRASH]

Dealerships actually prefer financing to cash these days. They can sell you a higher interest rate (which they'll get a kickback) and the finance guy can upsell warranties and service plans while you're in there.

 

[olds]

Maybe not always, but they certainly cared in my case. It's the only time I've ever paid cash for a car, and the fact that I offered to pay cash definitely lowered the price.

I didn't go into the negotiation expecting to pay cash, and iirc we were stuck around $7500. That's when I made the cash offer. I told the guy something to the effect of "$6500 is all I can spare".

Everyone's money is green. The difference is that when you show up able to pay x number of dollars, with that amount in-hand, they don't have put in any effort trying to up-sell you anything. If they want the sale (which is easy money for them at that point) they make it work.

My wife has been in auto sales for 25 years. Salesperson, Fleet sales, Fleet Manager, Internet Sales/Manager and Finance.

The dealership wants you to leave with a car. They will do whatever they can to make that happen. But either the numbers work or they don't and they know that to the penny. Their job is to get as much money from you as they can. Also, they dealer has incentives that you don't know about, advertising, hold back, etc.

They don't care how you pay, they get the money either way. Having cash may show them that you are a serious buyer but in the end, it doesn't matter. You won't get a better deal for cash, it's not like they don't report cash sales. In all likelihood, you could have gotten the same price if you had financed.

Some tips:

• Know what you want before you go to the dealership to buy. Do your research.
• All the add-ons (ex-warranty, undercoating, etc) are profit centers for the dealer, you can negotiate those prices.
• Get pre-approved at a bank but don't ignore the dealer financing, it can be a competitive rate. (I just bought a used truck and got a better rate at the dealership than my bank gave me)
• Shop at the end of the month. They may be short on their incentives for the month and more willing to deal.
• Don't fall for the "Playhouse 90". When the salesperson is going back and forth to try to get you a better price, he or she is acting. They are talking sports scores, not pricing.
• Dealing with the Fleet Manager may get you a better price and help avoid the Playhouse 90 and the sales closer.

 

[Via]

My wife has been in auto sales for 25 years. Salesperson, Fleet sales, Fleet Manager, Internet Sales/Manager and Finance.

The dealership wants you to leave with a car. They will do whatever they can to make that happen. But either the numbers work or they don't and they know that to the penny. Their job is to get as much money from you as they can. Also, they dealer has incentives that you don't know about, advertising, hold back, etc.

They don't care how you pay, they get the money either way. Having cash may show them that you are a serious buyer but in the end, it doesn't matter. You won't get a better deal for cash, it's not like they don't report cash sales. In all likelihood, you could have gotten the same price if you had financed.

Some tips:

• Know what you want before you go to the dealership to buy. Do your research.
• All the add-ons (ex-warranty, undercoating, etc) are profit centers for the dealer, you can negotiate those prices.
• Get pre-approved at a bank but don't ignore the dealer financing, it can be a competitive rate. (I just bought a used truck and got a better rate at the dealership than my bank gave me)
• Shop at the end of the month. They may be short on their incentives for the month and more willing to deal.
• Don't fall for the "Playhouse 90". When the salesperson is going back and forth to try to get you a better price, he or she is acting. They are talking sports scores, not pricing.
• Dealing with the Fleet Manager may get you a better price and help avoid the Playhouse 90 and the sales closer.

One thing to note - I bought the car when the great recession was hitting it's stride. They may have been desperate.

Who knows? Perhaps the amount of customers getting rejected for credit after initially being approved was hitting epidemic proportions.

 

[olds]

One thing to note - I bought the car when the great recession was hitting it's stride. They may have been desperate.

Who knows? Perhaps the amount of customers getting rejected for credit after initially being approved was hitting epidemic proportions.

Ya, I am not saying that cash doesn't work, just that in the end it probably doesn't make much difference. Unless like you say, no one is able to buy.

And as trash says, dealerships like you to finance with them. If they get 2.9 from the bank, they can mark it up a certain percentage (texted wife for actual number). IE: tell the customer 3.9%

 

[JCH13]

All your points are spot-on. I'm also sure salespeople play tons of games to try and whittle out more money for themselves. That's their job.

Perhaps my original point has gotten a little confused. I have had good luck saying "I will buy this car for this amount of money, can you do it?" It might not be the absolute, bottom-line, deal-of-the-century, but I get the car I want at the price I want and I don't have to dick around and waste time haggling.

I didn't intend to imply that handing someone an actual stack of bills is better or worse than a bank check, or even dealer financing.

Another technique (not so applicable with used cars, but it could be adapted) is to get silent bids. Call up a number of dealers, tell them "I am going to buy X car this weekend, I am asking Y dealers for silent bids, give me your best OTD price in writting and I am going to pick the lowest." Of course they reply "well, what if I get beat by $50? I would easily knock another $100 off to get the sale" then you say "then you weren't giving me your best price." I have heard of very good results using this method.