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If you are reading this article, the odds are you suck at negotiating while buying a car or anything for that matter.
If this is the case then we are here to save the day. Here is a comprehensive guide on what to look for when buying a used car.
Sometimes you may find yourself needing a friend or your partner’s company when you want to buy anything because of how good or better at negotiating that person is.
This seems like a great plan at face value but it is a flawed escape route because you may have days when you intend to buy this car alone or may want to surprise the spouse in question what then do you do.
So let us show you how to negotiate buying a used car, But before that let us show you how does buying a used car works.
How To Negotiate Buying A Used Car
Here are a few things you consider the next time you intend to buy a used car.
Know What You Are Getting Into
The importance of knowledge is underrated in the game of negotiation. In the car business, the most information about the car is in the possession of the salesman.
It is evident when you look at it from a different angle, a person walks into the dealer, tells the dealer the vehicle he intends to own, and how he intends to pay.
This entire scene happens in favor of the dealer because he can inflate the price of a car by an insane percent.
After all, he is aware that the client is unaware because if he did he may not have given that much information.
The dealer can manipulate the information however he wants and the buyer has no choice than to believe, pay, or leave.
The bottom line is that you are at the mercy of the dealer and that does not look good especially when you have a tight budget.
Now that you have this perception firmly placed at the back of your mind there are certain things you should know that would help you minimize the amount of cash you eventually part with for a used car.
- Keep your desires concealed, do not let the dealer know the exact vehicle you desire, how much cash you are willing to pay, and how you intend to pay it.
In this scenario, you would have successfully kept your proverbial cards closed.
- Ensure you have enough information about the vehicle you intend to purchase before you approach the dealer, this makes you seem intimidating to the dealer because everyone is careful around someone who knows too much about their line of work.
These are the two most important if you want to learn how to negotiate buying a used car.
Negotiating For A Used Vehicle
Look For Cars That Are Not More Than Two Years Old
Going for a vehicle that is below three years old is a great strategy because it gives you access to cars that still look good both internally and externally and are void of several problems.
The most important thing about this point is that the value of the vehicle plummets to about half the original price after a two year period which is a great deal. It’s almost like buying a brand new car for half the price.
Go Through Annual Auto Issue Of Consumer Reports
Yearly, Consumer Reports releases their issue. This report always has a section for a used car that gives you important information like a rundown of the most dependable used cars and the repair records frequency.
With this information, you can have a list of possible used cars to buy when you eventually visit the dealership.
However, you cannot go by the price derived from websites because they do not give you the wholesale price of these cars, all you get is the rental value.
Dealers use the wholesale price to know how much they have to pay for a vehicle.
The price of the vehicle is hiked after the dealers pay the wholesale price for it.
As much as you should go to these guides for price knowledge, it is recommended that you do not take these values too literally.
The specific situation in your specific market is not reflected by the values in the Official Used Car Guide or The Kelley Blue Book.
Get Your Estimate Fine-Tuned
Endeavor to find out the going price for the used cars you intend to purchase in your vicinity.
Visit autotrader.com to check for the prices of used cars in your area.
After Checking For The Prices Of Your Desired Car, Check If The Vehicle Is Available
When you have ascertained the price of your desired used car, check the websites of the dealerships or call them to see if the car is available for pick up and the price they are selling it for.
If the car is available, visit them and write the Vehicle Identification Number down.
This information would come in handy in the nearest future and would play an important role in how to negotiate buying a used car.
Get A CarFax Report
With CarFax, you get a comprehensive report of the history of any vehicle.
With this report, you can ascertain how many people have previously owned the car if the vehicle has been involved in any collision or accidents.
With information like that, you will be able to get the car for a really good price or avoid the vehicle if it has too many issues.
Let us take a sort of realistic scenario to help us relate to the situation; if the car used to be part of a rental fleet, there is a chance that the car has been driven by several individuals who handle vehicles differently.
The state of the car’s engine may have been dented by some of these drivers.
A car that has been used by a rental fleet comes with a copious amount of wear and tear and not forgetting the mileage that it may have left. A car with just one previous owner is a better choice.
However, the price of the rental vehicle must be significantly lower than the one with one previous owner.
If you want to carry out a report from CarFax, go to the website and enter the Vehicle Identification Number of your intended car.
You have to pay $34.99 but if you can make a dealer get that report for you it’s better for you.
Most times all you need to do is ask them for the CarFax report and they hand it to you.
Before You Visit The Dealer Do A Research Loan Rates
In a perfect world, you should pay in cash when purchasing a used vehicle, but in most cases, you do not get access to ten thousand dollars in cash in one motion.
This scenario is when auto loans become the Deus Machina, you may also be lucky to find car dealers who are willing to finance your used car.
Do not forget that these dealers do get some cash by signing you up with financing from their dealership.
The loan is essentially funded by a bank but the dealer stands in the middle and gets a commission for getting you signed up.
However, it is not a necessity for the dealer to finance your new used car, you always have the option of using whatever bank you wish.
For the pressure of getting finance for your car at the dealership to be avoided, look out for the best loan rates you can get.
The dealer will push you to their little finance office; you can easily tell them that you already have a car loan approved and the interest rate that comes with it.
At this point, the dealership would not want to lose that commission from their bank which means that they will start negotiating auto loan rates with you.
With another option, the dealership may give you a better deal making it look like you are doing them a favor and helping you save so much more money than you would have initially saved.
By now I am certain you are getting the idea of how to negotiate buying a used car.
In The Case Of A Trade-In
If you intend to trade-in an old car for a new used car, ensure you do your homework on the car you intend to swap your old car with. Ensure to get as much cash as possible in this deal.
Dealerships will try as much as possible to low ball you on the price and end up selling it for something better.
However, you can sell the car on your own at a retail price if you do not want to go through the backs and forths with the dealer.
You are likely to earn more when you follow this path.
The Dealing Begins
Knowing the wholesale, retail, and going price of cars in your location has given you significant information.
You also know the prices of a few auto loans and are ready to go head to head with the dealer.
Approach the dealership with the amount you intend to pay in your mind.
Be sure to walk away if the dealer does not agree with that stipulated price which has been influenced by all the information you have gathered.
If you are going with your partner ensure you both agree on the same thing and craft a strategy to tackle the salesman (these guys are really good).
Make That Offer
Several dealers add around a twenty percent hike to the asking price of the vehicle.
What this means is that they ask for twenty percent more than the price they paid for the vehicle.
Once they do this, let them know that you know about the twenty percent price increase but you would love it if he made a profit without knocking you out.
After saying this, keep quiet and wait for his response, do not flinch or pass any form of signal like you are uncertain, it kills the entire process.
Of course, he may argue for a bit, he has been doing that for years so you do not expect him to hug you and just agree with you.
Reiterate your knowledge by telling him that the retail price is not your concern, tell him that the wholesale price and what he paid for it is your concern.
A statement like this shortens the entire hassle process; he will keep still for a while and may even feign offense.
At this point, the salesman may excuse himself to speak to the manager. Regardless of how he looks and presents himself, do not fall for it.
It is all a bid to come across as having the short end of the stick. Remember that it is a business transaction and he wants to sell while you are buying.
It is important to pinpoint things that make the vehicle unsuitable to buy, this will make them want to take the car off their hands quicker.
Dwell on how few individuals still want a vehicle with that sort of transmission, talk about a dent in the car seat, or anything that devalues the vehicle.
This action would back him to a corner and make him think the vehicle would be difficult to sell then tell him you are willing to take it off his hands for your offer.
If the salesman responds with a higher number, tell him to sell it for ten percent below the asking price.
He may counter your offer again when if he does shrug it off by telling him you are about to go to another dealership to see that car and just walk away after giving him your number ( he may call you back before you even exit that entrance).
Do Not Fall For Add-Ons
Most dealers will offer you several add-ons like detailing or rustproofing when you want to purchase a new used car.
Turn all of these down because they are just another way to get some extra cash off you.
Do Not Be Afraid To Walk Away
Always be ready to walk away in the middle of any negotiation.
Avoid getting attached to a vehicle as this is always obvious to the salesman and leaves you vulnerable but when you appear indifferent then the ball is essentially in your court.
If you follow these guidelines religiously on how to negotiate buying a used car then you are certain to leave that dealership with that car of your dreams.