How to negotiate used cars?
 

Just turned 18 and saved enough money to buy my first new-used car. I say new-used since im in the market for cars less then two years old. Seeing how im a foreigner and young (18 y/o), I believe I AM the ideal target demographic for used car dealer's to try and take advantage of. So i'd like to go in with my guard up and looking for any advice, tips, tricks, etc, in negotiating used cars. I'm also not exactly sure what the conducts or 'rules' of negotiating used cars are, if there is one. One possible negotiation I have in mind is offering to pay half the car in cash straight up if they knock a couple hundred off (Would this be a legitimate negotiation or would they sneer me off?). Any advice would be appreciated.

Edit: I'm in the market for $8k-$10k NEW-USED cars... If that makes a difference.

Don't negotiate.

Find a car. Do your research and decide on the total price that you'd be willing to pay. Keep it reasonable of course but 9 times out of 10 you can go a decent number lower than whatever it says on the sticker. Once you get that price figured out, gather whatever ads you used for reference, approach a dealer and give them your number. If they say "You'll never find it that low!" show them your findings. If they say they can't deal, walk. Always be ready to walk. Haggling wastes time, imo.

The best tool in your arsenal is the ability and willingness to walk.

My last car buying experience I walked out three times before they gave me what I wanted.

This.

I ended up getting about $2k off the original quote from my last car purchase due to being willing to walk. There's a target price that dealers have in mind for a vehicle that takes into consideration their ability to make a profit, the sales person commission, and if you're going to trade in anything. Unless you're looking at vehicles in the $2000 - $3000 range, I can almost assure you that the starting price can always come down, especially in a buyers' market like this one.

My father used to tell me when I was younger that "There's always another car down the road." This is totally true in my experience. Unless you're looking at a fully restored Chevelle or something, don't get emotionally attached, because chances are there's a dealer down the road with the same thing or something similar.

If you find a car you really want, don't let them know how bad your want it. Play it cool and act like you don't need the car.

-Mike

I'm personally a fan of the big red sharpie approach, but I've been negotiating for years and it's become a game to me, so I won't go into those gory details.

Do your research. Know what the car you'd like to have is worth. Make a reasonable offer based on research. Walk if they say no. There are other dealers and other cars.

Used cars are harder to buy right than new ones. Everybody knows what a dealer pays for a new car - the info is just not that hard to find. But what they paid for the used car they're trying to sell you... good luck finding *that* out. Maybe he paid up for it on a trade to get a deal done on a new vehicle, or maybe he bought it off a farmer for $10 and fished it out of a swamp. So it's hard to know what to offer on a used car if you start with their asking price. So don't.

As others have said, do your research, look up comparables, do more research.

The biggest pit you can fall into is the "payment buyer" trap. Let's say you find a car you like, and are willing to buy it if the numbers make sense. So you go inside, get a soda, and wait for the magic piece of paper to come out from the sales office. I'm going to say this in all caps, because it's really important:

NEGOTIATE ON THE PRICE OF THE CAR, NOT THE MONTHLY PAYMENT.

If they push you into saying, "No, I've gotta be at $400 a month" before you've agreed on the price of a vehicle, I guarantee you that they will make that $400 (or bump you to $425) number work... in an 84 month car loan. You will end up not really knowing what you're paying for the car, and they will laugh all the way to the bank.

I could go on. Feel free to PM me if you'd like me to. I used to do this for a living, and I do know a few of the tricks....

I'd like to hear some more of the tricks. I figure I'll be looking to get a different truck here soon. Not brand new, more like three to five years old.

-Mike

This^^^^too!!!!

I assume you are in the US. If so put the NADA listing app on your smartphone. I always use it as a reference because that is what banks will use to value the vehicle to make a loan. That being said It usually takes me two too three weeks to make a vehicle purchase. I walk, several times, I love nothing but a good deal. I'm not sure what type of car I want, what are you gonna make me a deal on. Color, don't care. Fuel mileage, not as important as reliability and utility to my needs.

Always get a car fax and do not buy something that has a salvage title. If the dealer shows your any other report than a car fax walk.

Pay as much as you can in cash. Car payments suck and they suck even worse if you are a student. Live within your means.

Find a good reputable repair shop and have then give it a mechanical run thru.

Mileage rules. I will buy a year older car is if it has less miles on it. Point is to get as new and low mileage car as you can for as little money.

Oh, I tend to wait till the last day of the month two to three hours before closing to purchase because management wants to move the inventory and the sales person needs to make their quota. That is usually good for another few hundred off.

A few tricks would be nice :)

I still don't understand how the dealership can trick you into not really knowing what your paying for , even if your end price is indecided... They could play with numbers all day long, change the $400 to $425 or whatever and at the end, all i'd need to do is a whip out a calculator and multiply $425 by 84 months and if I like the end price, I take it, if not I tell them to go to hell...

BTW go ahead and rant all you want, the people who want the advice will listen and the ones who don't, won't. :)

A friend of mine told me his trick is to say he wants the warranty, salesmen throw more stuff in afterwards to then remove it once he's in the finance guy's office.

Would it also change the game that I can pay for the car FULL, in cash on the spot but im purposely not paying it all because I need the credit... since im 18 and haven't made any big purchases yet. That's why I asked "One possible negotiation I have in mind is offering to pay half the car in cash straight up if they knock a couple hundred off (Would this be a legitimate negotiation or would they sneer me off?)." As a matter of fact I can pay more than half and wondering if they would knock a couple hundred off if I give them a huge chunk up front, cash is king, no?

Thanks for all the advice so far, keep em coming.

I would suggest that you try to find someone who can go with you and is knowledgeable in buying a used car.
There are so many things involved in used car shopping: half is inspecting the car for problems, the other half is negotiating the price like you are at a Turkish bazaar.

Agree to all if the above. I might also add that you shouldn't be afraid to bring a mate who's good at standing up to pushy sales people. Not all of us are built that way and there's no shame in having someone to help you out if it means saving money. Salespeople can smell fear.

It's bedtime in my 9-digit ZIP code, so I'll not expound at length, but trust me on this: Negotiate on the price of the car, then make the payment and terms fall into place.

Let's say you found a car you liked, and you decided you were willing to pay $15,000 for it. (Their asking price is $17,995.) You go to the salesperson's desk, do a little paperwork, and she goes away to the sales office. She comes back in a few minutes with a piece of paper divided into quadrants. Your name and car info is in the upper left corner. She says,

"Great news! I just spoke with my manager, and here's what we have. As you know, the price of your car is $17,995 plus tax, license, and fees (points to upper right hand quadrant). With $6000 down (points to lower left corner), your monthly payment is $577.02 (points to lower right corner). All I need is your initials on the line near the X, and we'll get the process underway to get you out of here in your new car!"

Then she hands you the pen.

If you immediately say, "No, I need to be at $400 a month," you've just flunked. But let's play it that way for now, just to see what happens:

"No, I need to be at $400 a month."

(Salesperson looks disappointed.) "Oh. (pause) Wow, that's going to be tough.... $400? Do you think you could do a little more than that for me? Give me something to take to my manager... could you do $450?"

Eventually you settle on $425. Congratulations. Not only have you become a payment buyer, you're now paying $25 more a month than you said you wanted to. And you have totally caved on the price of the car. You have essentially agreed to it without objection. And you never asked the terms. In my shining example here, there's NO interest (I'm too lazy to figure it) but 9.2% sales tax, a reasonable amount in license and doc fees, and it's a 24-month loan with roughly 30% down.

The manager's counteroffer is $477 a month. You hold fairly firm, but they reeeeeaaaaalllly need you to go to $432, so you do. You sign by the X, the salesperson congratulates you, and assures you that you'll be out of the finance office and on the road in no time.

This is the trap. It works well for them.

Suddenly, $432 a month x 36 months = $15,912 + the $6000 you also tacitly agreed to = $21,912. So much for your $15,000.

Did I blow up the example a little bit? Only a little. Are people really that stupid? Yes, all the time. They get fixated on payment and lose sight of everything else.

There are many, many other wrinkles.

Here's how it should have gone:

"Great news! I just spoke with my manager, and here's what we have. As you know, the price of your car is $17,995 plus tax, license, and fees (points to upper right hand quadrant). With $6000 down (points to lower left corner), your monthly payment is $577.02 (points to lower right corner). All I need is your initials on the line near the X, and we'll get the process underway to get you out of here in your new car!"

Then she hands you the pen.

You take the pen. Or, better yet, you whip out your own different-colored Sharpie. (This will not endear you to the manager, but oh well.) You cross off the $17,995. Ignore the other boxes for now. Write your starting bid in big numerals, write "plus tax, license, and doc fee" alongside it, circle it, and say, "If you will do this, I will buy the car right now." Initial in the circle. And then look at her and smile.

Do not negotiate any more at that moment. She'll try to get a bump. Repeat your offer that you've circled. And wait.

Chances are, she'll at this point ask you what you want your payments to be. Don't bite. Negotiate on the price of the car. If she says, "Isn't payment amount important to you?" your answer is, "Yes, it is. But I am confident we can make that work out once we agree on the price of the car." Smile.

Eventually you'll agree on a price, and then you can work on the terms in the same way. Go in prepared, know what your own bank will do for you, and relax. And if you know someone who can help you with this process, take them with you.

Ok, enough novel for tonight.

If you can pay cash at the dealer it definitely improves your position. To a prior poster's point, negotiate the price, not the payment. Once you've locked the price, you can go get your financing anywhere you want. Your bank or credit union will likely give you a better finance deal than the dealership. Don't be afraid to use that to your advantage.

I see you've seen the big red sharpie method! I used that when I bought my current truck. Four visits, seven hours, five pieces of paper and I went from the sticker price of $28,995 + tax, title, license to $13,550 including tax, title, and license. If you're patient and do your research, good deals are there to be had.

Damn, you go girl!

I never liked negotiating (the one and only thing keeping me from becoming a band leader - don't want to deal with club owners), but I am very good at it. I have a labor relations background and I'm a former NLRB agent. Even in the neutral position in the labor relations world, there's negotiating, as I had to negotiate settlement agreements with some sometimes tough attorneys.

I'm a pretty mellow and easy-going person. It was pretty funny to see my father see me put on my negotiating hat and become a shark when we were in the car dealer's office the last time. :ninja:

When buying a car used, I always go through a long but important ritual and so far I haven't gotten a rotten egg yet.

Car buying is a big financial decision and ending up with a $20,000 hunk of metal is hard.

Usually applies to For Sale by Owner but can also work with a dealer.

•Tell the seller to shut up and let you look at the car. If they keep butting in, tell them to go get a drink or something.
But as always, let them tell you what if anything is wrong with the car first.
•Always look at car history. Carfax, ect.
•When you go to look at the car, make sure it hasn't been started in 7-8 hours. You want to see how it acts when you clod start it. You can check if its been run by putting your hand on the exhaust manifold. If its hot of just slightly warm, it's been started.
•Make sure maintenance records are consistent (every 5,000 - 7,000 Mile oil change, ect.) and match up with the miles. (Dealerships will not have maintenance records. They trash all that when they get the car.)
•Check all the fluids.
•See if wear is the same on all the tires.
•Check for and fading or chipped paint (usually on the top and hood of the car.) discolored panels (these hint to a repair job, although good ones are hard to notice.) check to see if the body lines are consistent along the doors, hood, hatch and fenders. Look for dents and dings and make mental note if these. They tell how well the car was cared for.
•Check to see if all the weather stripping is there and snug.
•See if the doors give a good solid thump when they close. Not a rattle. Your looking for that 'Buick' sound.
•Get to a shop that has a lift and if are not mechanically inclined, asked the chief or head mechanic to look over the car. I can go into more detail if you want. Just ask.
•If its got a mech. Odometer, hit the dash above it hard, if it jumps or moves, the milage has been changed. If it does change. Stop looking and leave. A dishonest seller might not tell you about other problems with the car. It's not worth it.
•Drive the car, but make sure you hate it at first. If you drive a car you love, you won't notice things.
Start the car and take note of if it fires right off or takes a couple seconds.
Start driving the car slow and feel for the trans. Shifting. Is it smooth or did it lurch a little bit or make a sound? Do this w/ all gears. Drive it for a good 30 minutes.
Then get to a flat and straight piece of road and accelerate fast. Does is respond well or take a minute? It might even die. (Don't go over the speed limit and tell the owner what your doing)
SIT IN THE BACK SEAT. People never seem to do this and it makes it hell for passengers.

If you like the car and something is mechanically or physically wrong with the car. Get a quote on repairs. But be smart. There where millions of those damn things made. You'll find the right one.

Try to make yourself hate the car your looking at. At the end, if you haven't found anything wrong with it, you'll definitely like it.
Emotions get in the way of good car buying.

I hope this helps. If you have any questions. Just ask!