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.