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How To Negotiate The Price Of A Used Car, Without The Benefit Of An Assault Weapon

Posted in auto industry, Cars, Guide by Suzanne Denbow | August 28th, 2008 | 9 Responses |

So you’ve been shopping around for a used car and you’ve found one that you think you’d like to buy. You do your homework, run a CARFAX report, calculate the Blue Book value, take it to your mechanic – and now you’re ready to be given the keys. The problem? Johnny Commission over at Used Car Emporium wants 21k, but you know the car is only worth about 20k – at most. So what do you do? Well before you extend him an invitation to fight club, read our tips on how to negotiate the best deal possible on a used car.

Tip #1: Lose The Ego
You’ve sized up the sales guy and you’ve come to the significant, manly conclusion that, if it came right down to it, you could probably kick his ass. Right now, you’re most likely thinking, “I know that this little gold-chained, silk-shirted freak is going to try and make a buck off of me, and I’ll be damned if I’m going to let him do it.” Well before you hasten to rape and pillage the dealership, Butch Deadlift, remember that the dealership is a business and they will run it accordingly. So regardless of how many times you growl, “You gotta do better than that, buddy,” there will reach a point when the guy actually means it when he says “I’m sorry, we can’t go any lower.”

Tip #2 Know The Game
Buying a car isn’t like buying a shirt at the mall because, unlike a polo from Banana Republic, the price tag on the car doesn’t necessarily reflect what you’ll actually wind up paying. Dealers aim to sell a car at its advertised sticker price the same way most people aim to win the lottery – they know it isn’t likely to happen. Instead, dealers generally use the sticker price as a starting point for negotiations.

Conversely, every dealership also has a cut-off point, which is the lowest price they can offer the vehicle at without selling it at a loss. This isn’t a price that’s advertised so it’s impossible to determine exactly what it is, but do you remember when you appraised the car using that one website? There were two prices you were given, right? One indicated what you could expect to pay when buying from a private seller, the other from a dealership – and there was probably at least a $3,000 difference between the two. Although the dealer’s cut-off point might actually be lower (note: “might” translates directly into “not likely” if the car’s in good condition with a clean history), it’s a good idea to use the lesser of those two estimates, the private party value, as the assumed bottom line.

Tip #3 Have The Upper hand
A commonly held law in the car buying world: “He Who Talks The Least Is Winning.” It’s true, because the more information you give the dealer to work with, the more ammunition he has to go in for the sale. Think of yourself as a young black male and the car salesman as a cop – the less you say, the better. Don’t try to out-strategize him, he knows all the tricks of the trade and has access to the same resources you do – you can’t outfox a fox. Don’t volunteer any more information than is absolutely necessary, and of course – stick to your budget. If you begin negotiating with a dealer and he finally stonewalls at a price about 2 grand out of your range – be prepared to walk away. Shake hands with the man, thank him for his time, but politely yet firmly explain that his final offer just simply isn’t good enough. At the point, depending upon how early-on in the negotiation process this occurs, two things will happen:

1.) The dealer will backpedal furiously (albeit smoothly) and attempt to continue negotiating
2.) The dealer will politely shake your hand in return, clap you on the back, and say, “I’m sorry
that we couldn’t help you out, you take care now.”

If the dealer opts for #1, congratulations, you’re still in the game. If he chooses #2 then don’t worry – nothing is over, but it is about to get harder. Should you find yourself staring down the barrel of #2, don’t flinch – it’s incredibly important that your actions make it unmistakably clear that you will not be persuaded to spend more than you had originally planned. The most effective way that you can do this is to walk away from negotiations that do not end with a price you’re happy with. If you walk away, the dealer will realize that you’re playing hardball and that you only intended to pay either your price, or no price at all. After you’ve walked away and the dealer has fully assessed the situation, later that day or (more likely) the next day, he will call or email you and attempt to resume negotiations. Once he has approached you, you now have the upper hand in the negotiation process – at this point, you could request that the dealership throw in everything except hookers and some blow and you just might get it. Now of course as we said before, every dealer does have a certain price that they absolutely will not go below, and if they have already offered that price and it still didn’t suit you, then the negotiations are over. The dealer might give you a courtesy call to thank you for your time, but he won’t be making any more offers. It’s time to move on.

Remember, these tips are only helpful if you’re simply shopping for the most cost-effective vehicle, as most consumers are. If you’re in the market for a specific type of vehicle, however, you need to face the distinct possibility that the vehicle you want might be completely out of your price range and you’ll need to decide which is more important: your budget or the car. Just remember, buying a used car is a pretty aggressive game, but it’s not an impossible one to win.

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9 Responses

  1. Matt says:

    Good stuff, but probably shouldn’t have thrown in that racist analogy about a young black man talking to the police.

  2. […] How To Negotiate The Price Of A Used Car […]

  3. Joe says:

    Matt? What about the hookers and blow? She probably should have left those out too.
    :damn, sarcasm is sooo diffucult to convey when written:

    Get real kid! I’m not racist, and a cop or a black guy will laugh at that. Maybe not out loud, but they will.

    Suzanne– that’s one of life’s simple pleasures — having that salesman call you back on Monday morning to “see what we can do,” yes you are right. You know you’re back in the driver’s seat then.

  4. Value guides are just that, guides. Part of the problem is dealers use ones with different values than what the general public can get.

    The NADA (National Auto Dealers Association) Used Car Value Guide that dealers use, has only two pricing scales – retail and trade-in – for any vehicle. The difference between the two suggests the profit margin that a dealership, or independent dealer lot, can hope to make on the vehicle.

    Additionally, there is a national value guide for used cars, and for those dealers who want it, regional issues. While I am not an auto dealer, I know this since I am on the advisory board of the NADA Classic, Collectible and Special Interest Car Appraisal Guide; and my payment for that task is a comp subscription to NADA value guides, the same ones dealerships obtain.

    You can buy the NADA Used Car Value Guide through NADA’s publishing arm, or at some auto parts stores, but it will show high, low and average values. If a person could get a copy of the guide that dealerships use, you’d have a better idea, going in, as to how much you might – emphasis on “might” – be able to negotiate the price down.

    The main thing is respecting the salesperson for what he or she is in the business of doing; and of course, that works both ways. For example, if you ran into someone who actually looked like the salesman character illustrating this piece, you might wonder how professional he is, and reconsider. But then again, there is that old saying that “you can’t judge a book by its cover.” Ultimately, in the first few minutes of interchange, if you don’t feel comfortable with how you’re being treated, thank the person and walk away. That’s the power the consumer has always had, but few use.

    And as holding back information from salespeople, I’d advise against it. This is not akin to dealing with an attorney in a court of law. If you have a trade-in, be honest about its condition; use value guides to get a realistic idea of what you might get. You’ll have to use the “average” value in the books you can get, to figure where to go up or down.

    If you have bad credit, the salesperson needs to know that. It helps them know if they’re going to have to find financing for you. But of course, if they offer you financing through one of their lenders, expect to pay a higher rate, than you would through your own bank. Of course, these days, that may vary, depending on who you’re banking with. It might even be possible that the dealership can do better by you.

    As for CARFAX, it is sometimes “garbage in, garbage out.” I have seen instances where someone I knew selling a car had a potential buyer tell him something about the car, learned through CARFAX, that just wasn’t true. That service is not always the best way to judge a vehicle. If you like something, don’t be afraid to drive it – again, respecting the fact that it is not yours (yet) – and make your evaluation, that way.

    And if you feel compelled to buy a used car off of eBay Motors, don’t buy long distance without having someone you know, or can pay, look at and drive the car you’re interested in. If the seller refuses you that, don’t buy. Again, it’s the power of walking away. Sometimes, the most empowering thing you can say is “no.”

  5. M.Harris says:

    I ran across this piece while searching for a used car. I stopped reading as soon as I ran into the analogy about a young black male and a cop. I am not a male, but I am black and I think this is an ignorant assumption to make; that a black man needs to be quiet when talking to the police. In this case, the more you talked, the more ignorant you seem. I have discussed this with several of my black male friends and NONE of them seem to think it is funny, at ALL! I would seriously consider re-wording this part of your article and think a little harder the next time you need to make a point. There are many other ways you could have cited this example.

    I realize it’s difficult for a person of any other race to even begin to understand the struggles of a black person, let alone a black man. People should really learn to educate themselves more on the current state of Americans as a whole. I truly feel this piece would have been more effective as a whole if the author had put a little more thought into writing it….I did not make it past the black male sentence, so I have no idea what the rest said. Good luck to you in the future and I truly hope you take something from this comment.

  6. Rock517 says:

    M. Harris, mah brutha, I’m down with your struggle. Ok, not really. GET A GD SENSE OF HUMOR. Ms. Denbow is hilarious, an excellent writer, and if you bothered to read some of her other posts you’d understand that. Instead, you immediately go all Jesse Jackson/Al Sharpton and whine. And I highly doubt you “discussed this with several of your black friends.” C’mon, you’re surfing the internet for a used car, came across this, and then took the time to call up your peeps and run what some white chick wrote on a car blog to see what their thoughts were? Puhleeeaze…

    Honestly, we all, regardless of skin color, have difficulties in life we need to overcome, but when blacks like you pull this shit you do yourself and the rest of your race no favors whatsoever. Slavery’s been outlawed for almost 150 years and the Civil Rights movement righted years of wrongs over 40 years ago. You live in THE most free and least oppressive country this world has EVER known. As a result you have every opportunity to do the most with your God-given talents and go as far in life as your ambition will take you. But, instead, you chose to maintain a defeatist, “someone owes me because I’m black” attitude. As a result, sir, you will never go far.

    Oh, wait… Obama’s gonna be president in a couple weeks. All your ills will be corrected. The hungry will be fed. The paralyzed will walk. The world will love us (even France!). And you, as a black male, will no longer have to suffer through the daily struggles that must be *so* difficult. But until then, lose the defeastist/entitlment mindset. Peace out, yo.

  7. Shazam says:

    Oh god damn who gave the bible-belt the internets lol

  8. Toby says:

    Scerew you and your thin-skinned ” You wouldn’t understand how it is to be black” attitude!! Bite ME!!
    I am white. I have plenty of black friends. None of them have this poor me attitude. Maybe that it because I don’t assciate with the “whiners” who do.

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