Buying any car can be a daunting process and it often involves negotiation in some form or another. Whether you are trying to get the price down, get additional features included for less or get a better aftercare deal, negotiations are a fundamental part of car sales.
The same is true even if the car you are buying is secondhand. In some cases, knowing how to negotiate when buying a used car is even more important. Of course, it depends on where you’re buying it from, but you want to make sure you’re getting a good deal for a good ride. Here, we break down the tips and tricks you need to know so you too can know how to negotiate when buying a used car like a pro.
Why buy a used car?
There are plenty of reasons buying a used car might be preferable over a brand new one. Price tends to be the most immediate reasoning although the trade-off of course is that the lower the price tends to be, the more the car has been used.
Having a pre-loved car doesn’t mean it is any less useful for you though. There are plenty of reasons why buying secondhand may be the most logical choice. Sometimes you just need an extra vehicle as a result of moving or your job changing locations, it may be for your or your children to learn how to drive in, or it could be perfect for people that only drive rarely but like to have the option.
No matter why you may be choosing to go down the used car route, knowing how to make sure you get the best deal is a must.
Do your research
Before you buy a car you should know exactly what you want and what you could be buying anyway, but it’s especially important to have done your research if you’re planning to enter negotiations with the seller. Whether you’re dealing with a car salesman or doing a private sale, knowledge is power! In order to give yourself the best possible chance at getting what you want out of negotiating when buying a used car, there are three key areas you should have covered with your research: the car and the market and your seller.
Know the car
It goes without saying that if you plan on buying a car, you should probably have looked into it. From size, to safety ratings and if there have been any recall notices issued, knowing what you are buying is key. When buying a used car, you need to take things a step further. Research the specific year and model you’ll be buying – are there any customer reviews suggesting it hasn’t held up as expected? Are people trading in for newer or different models because of issues? Additionally, how many miles has the car you’re buying done? Has it been serviced by reputable mechanics and have the log book to show that? Have there been any major repairs done?
Getting as much information about the car model and the history of the specific vehicle you’ll be looking at is important because it all influences the total price you’ll be paying.
Know the market
Another factor that comes into negotiations when buying a used car is knowing the market conditions. Is this particular car a popular model that sells quickly? Are there many of them in the market at the moment?
This is also a great way to gauge the value of the vehicle you want to buy – if others are on the market at significantly different price points to the one you’re looking at, it should prompt you to dig deeper and ask more questions about it.
If the car you are looking to buy is more recent, it is also worth being aware of when the latest model was released, or if there is a new release on the horizon.
Know your seller
If it’s a private sale, understanding why your seller is parting ways with their car in the first place is an important part of your negotiating strategy. When reading the listing or even test driving the vehicle, having a casual conversation about why they’ve decided to sell could give you information that will come in handy for later.
If the seller is moving away for example this may increase the urgency of their wanting to make a sale and give you a better chance of getting them to reduce their price, whereas if they just bought a new car they may be less concerned about an immediate sale and want to get the best price.
If it’s a car salesman, learning about their dealership, where they got the car and how long they’ve had it are all important details that can help your negotiation strategy.
Knowing the seller’s motives around the sale, along with knowing the value of the car and what other options are in the market work in tandem to form your strategy, and will help you as you begin negotiation.
Close the deal
Now that you’re past the initial stages of the process you’re ready to get to the action and learn how to negotiate when buying a used car. People often shy away from negotiating because it can feel like confrontation, so it makes them too uncomfortable to even try. But like many things, negotiating is more of an art form than anything else.
When approaching a negotiation, there are two important rules to follow: know your limits and be strategic.
Know your limits
In the same way homeowners can overspend at auctions, you need to be careful when entering into negotiations or any major purchase that you don’t go beyond your financial limit. If you want to negotiate the price down, you need to make sure you don’t start too close to your limit.
As an example, if your price limit is $10,000 and you see a car you like advertised for $10,500, you could start negotiating at the $9,500 price point. Starting at your limit gives them wiggle room to encourage you to meet them in the middle, but unbeknownst to the seller, you’ve already passed your limit. In this case, starting at $9,500 presents the middle ground of $10,000 which ensures you get the car without going past your price point.
Of course this is just an example, but whether it’s a care salesman or a private seller, knowing where to start haggling on price is essential to ensure you don’t overspend.
Be strategic
Once you know exactly where you sit financially, the next important component is being strategic in the way you approach discussions around price. As mentioned, negotiations are an artform that require just the right balance. If you start off too demanding, the seller may find you standoffish and be unwilling to lower their offer, if you come across as too friendly they may see you as a pushover and also refuse to budge. The middle ground here is a balance of firm but polite and never rude.
Clearly let them know what your offer is, showcasing that you understand the model value and state of the market (hence the importance of your research) and why your offer is both serious and a good one.
At the end of the day, knowing how to negotiate when buying a used car isn’t always a straightforward process. Negotiating can be a time consuming process, purely because of the work that goes into being ready for that conversation. From the selection process of deciding what used car you want, to the market and model research and finally the people skills of haggling with the seller; it all adds up.
But, knowing what you want and putting the time and effort into presenting a compelling deal for the used car you want is all worth it when you drive away in your new purchase.
