Buying a used car can sometimes feel a bit daunting, especially when it comes to negotiating the best price. Everyone wants to strike a great deal and save some cash, but that can often be easier said than done. That’s why we have created this guide that should give you some pointers on how to negotiate when buying a used car. While we won’t claim that you are guaranteed to get a discount with these tips, they can definitely help, so carry on reading to find out more.
Table of Contents
What Are Some Common Used Car Negotiation Mistakes?
Not Doing Enough Research
This is a big one. If you know more about the market value of the vehicle you are less likely to be ripped off. You can do this by looking at similar models for sale, taking note of their specs, mileage, condition, etc.
Focusing Solely on Price
While getting a good deal on a used car is important, focusing solely on price can lead to making some hasty decisions. Sometimes, a lower-priced car may have hidden issues that will end up costing more in repairs and maintenance down the line. Instead, think about the total package you are buying – Is the car in good condition? Does it come with a warranty? Who is it being sold by, and do they have good after sales support if you are buying from a dealer?
Overlooking the Vehicle’s History
A vehicle’s history can have a big impact on its value. If it has been in a crash, serviced poorly or has had some other sort of issue in its past (blown head gasket, rust, etc.), then it is going to be worth less than if it had a completely clean history with good service records. Obtaining a vehicle history report is also crucial to identify potential problems, such as undisclosed accidents, flood damage, and odometer fraud. Checking the vehicle’s title and registration can also reveal if there are any liens or outstanding loans on the car, which is one of the most important things you must check for when buying a used car (remember, you don’t won’t to be left paying for somebody else’s loan).
Finance-Related Mistakes
Not Securing Financing Beforehand
One common mistake people make when negotiating a used car purchase is not securing financing beforehand. Many buyers walk into the dealership without knowing the interest rates or loan terms they qualify for. This leaves them vulnerable to high-pressure sales tactics and financing schemes that beneficial to the seller and loan provider, but not them. To avoid this mistake, research what sort of financing you can get and shop around for the best provider.
Having a Monthly Payment Mindset
Another finance-related mistake buyers often make is focusing too much on the monthly payment, rather than the total cost of the car. Dealerships may present low monthly payment options by extending the loan term or manipulating interest rates. It’s important for buyers to take a step back and consider the total price of the vehicle and not just the monthly payment. A simple tip for a buyer is to break down the total cost by dividing it by the number of months in the loan term to compare these numbers and make an informed decision. This can often be quite an eye opening experience for some after they realise that the low monthly cost advertised is actually significantly higher than it would first appear.
Ignoring Trade-In Value
Lastly, many buyers tend to overlook the value of their trade-in, if they have one, while negotiating the price of a used car. A trade-in can significantly impact the final cost of the car, but some buyers might not know the true value of their current vehicle. With this being the case, have a look at some auction sites and dealer websites to see what sort of prices your car sells for. While you aren’t going to get those prices as a trade in, you will have a better idea of whether or not you are being ripped off. Additionally, it’s a good idea to get multiple offers from various dealers to ensure the trade-in is being accurately assessed.
Negotiation Techniques to Avoid
Not Being Prepared to Walk Away
One common mistake when negotiating for a used car is not being prepared to walk away from the deal if it doesn’t meet their needs or expectations. Buyers should establish their budget and key requirements before engaging in negotiations. This way, they can confidently walk away if the seller is not willing to meet their key requirements or stay within their budget. Even if you are sure you want to buy a particular car, it can be a good idea to walk away initially just to gather your thoughts on it.
Failing to Stay Calm and Composed
It is crucial for buyers to remain calm and composed during negotiations. When emotions run high, they can cloud judgment and lead to poor decisions. Buyers should take their time, evaluate their options, and not feel pressured to make a quick decision. Maintaining a calm and composed demeanour is essential to effective negotiation.
Not Asking Questions
Finally, a lack of questions can be a significant hindrance in used car negotiations. By asking the right questions, buyers can gather crucial information about the car’s condition, history, and true value. This information will help them make a more informed decision and strengthen their negotiation position. Buyers should not hesitate to ask the seller about maintenance records, accident history, and any recent repairs or replacements.
Frequently Asked Questions
What are common mistakes when negotiating at a dealership?
When negotiating at a dealership, common mistakes include not doing enough research, talking about monthly payments too soon, and not shopping around for financing options. It’s important to understand the car’s value, be prepared to walk away, and compare various financing options before committing.
How can you avoid overpaying for a used car?
To avoid overpaying for a used car, research the market value and track comparable sales in the area. Inspect the car thoroughly and ask for a vehicle history report. Be prepared to walk away if the price is too high, and negotiate based on the car’s value, not the asking price.
What tactics should be avoided during price negotiation?
During price negotiation, avoid emotional outbursts or ultimatums. Instead, keep the discussion focused on facts and the car’s value. Do not disclose your budget or financing information until necessary, and avoid getting caught up in the excitement of the negotiation process.
How does paying cash impact negotiating?
Paying cash can sometimes allow for more negotiating power since it removes the need for financing. However, some dealers might prefer financing deals since they can earn more from interest and fees. The key is to know when to reveal your payment method and use it to your advantage.
What’s the main difference in negotiating with dealers vs private sellers?
Negotiating with dealers typically involves more formalities and potential fees, whereas private sellers often have more flexibility in price and terms. Dealers might be more skilled negotiators as it’s their profession, while private sellers might be more motivated to close a deal quickly. Dealers can usually provide you with more after sales support and you may also be able to get a used car warranty.
How much can you expect to negotiate off a used car’s asking price?
There’s no set number, but one could potentially negotiate as much as 10-15% off the asking price or even more if some more serious issue is found or if they want a quick sale. Factors such as the car’s condition, supply and demand, and the seller’s motivation all affect the final negotiated price. Be prepared with research and market value data to support your negotiating position.
