How to Negotiate Used Car Price
Shopping for a pre-owned or used car might begin online as buyers research their different options. Buyers might begin their used vehicle hunt knowing exactly the car they want; they might zero in on a specific brand or even a particular model. Some used buyers want a newer model and updated features. Others are fine with older models.
Most buyers also focus on getting the fairest price possible, and the price on the sticker isn’t necessarily the price buyers are willing to pay. Negotiating helps buyers score the best price on any car; here’s how to negotiate used car prices at the dealership.
Research the Car Online
Before visiting a dealership or making contact with the sales team online, car buyers should research their vehicle options to find the best vehicles for their driving needs. This can help buyers streamline the buying experience and eliminate unnecessary back and forth with the dealership.
Visiting a dealership without any direction can result in frustration for the buyer, but it can also turn the shopping process into an overwhelming ordeal. Simplify the process and look at different cars online; some buyers might be drawn to a particular body type like an SUV, but other buyers might have an exact model on their mind.
Ideally, buyers should narrow down their choices to a few models. Then they can begin to research the prices of these used models online. To better understand the value of their favorite cars, buyers can visit Kelley Blue Book. The site can be used to find resale and trade-in values of vehicles, but buyers also can find prices for a particular model in their area.
KBB can help buyers get an idea about the price for the same car at different dealerships. Looking at the resale value of a car also can help buyers understand the model’s fair market value. Researching prices can empower buyers and help them with negotiating.
Understand the Budget
Buyers should know their budget when shopping for a vehicle. Set a limit and stick with it. How much should buyers reasonably budget for a car payment, though?
Nerdwallet recommends that buyers allocate 10 percent (or less) of their take-home pay for a car payment. Take-home pay isn’t the same as salary; an individual’s take-home pay is the amount left over after taxes and other deductions like health insurance or 401K contributions.
Buyers also need to remember that if they are financing their vehicle, the interest rate will impact their monthly payment. Higher interest rates might mean that buyers can afford a less expensive vehicle. However, the down payment or a trade-in can help lower the price of a vehicle and the monthly payments.
How to Negotiate Car Price
Once buyers find the model they want and understand how much that model should reasonably cost, they’re ready to start visiting or reaching out to dealerships. Some buyers might find their perfect car among the advertised inventory of the dealership’s website.
Before talking about the deal, buyers should take a test drive of the vehicle. The perfect car might not seem perfect on the road; it could be uncomfortable to drive or maybe the buyer finds it cumbersome. If the test drive seals the deal, though, it’s time to negotiate.
Buyers should keep in mind that the dealership wants to get the best (or highest) price possible. However, the dealership also knows that the buyer wants the best price, too. The dealership might be aiming high while the buyer might want to go much lower. Meeting in the middle might be the goal.
Using a trade-in can help begin the negotiation process. Remember, buyers should know the trade-in value of their vehicle before visiting a dealership. Understanding the value of their vehicle will help them get the best price for their trade-in.
The price of the trade-in will lower the price tag of the vehicle. At this point, buyers could be satisfied with the deal and move forward.
However, if buyers feel that the price of their trade-in is unfair, there may be continued negotiations. Buyers can point out the value of their trade-in via KBB and try to negotiate a better price using the information from the site.
The price of the used car also could be the main point of negotiation. Again, buyers can use information from KBB. They also could pull in prices from other dealerships.
Negotiation is, unfortunately, a back and forth process. Each side wants to get the best deal. However, the buyer must feel comfortable with the price before moving ahead.
If, after negotiating, the price is still too high and the dealership can’t budge any more on the price, buyers might just need to move on to another dealership. It’s ok to walk away. Again, buyers must be comfortable with the deal to move forward.
Investopedia advises giving the salesperson contact information before leaving. They might be in contact, or the buyer also could never hear from them again.
Inspect the Car
When buying a used car, Investopedia recommends having a mechanic to inspect the vehicle. Buyers also use sites like Carfax to find out the vehicle’s history; Investopedia explains that buyers can find out the odometer reading, accidents and other details about the car.
Reviewing the detailed report can help buyers feel better about the purchase or even uncover issues that encourage them to walk away.
The Down Payment Can Help with Monthly Payments
For buyers who are trying to get the lowest price possible for their car, the down payment also can help to reduce the large sticker price. While some buyers have set aside a decent amount of money for the down payment, though, others might have very little to pay up front.
How much is the ideal down payment? Experian recommends a down payment of 10 percent of the purchase price of a used car.
Used Carzing to Find the Best Used Cars
Buyers shopping for a used car can search for all their options with Carzing. Search for cars by make/model, price or body type. Those who know their budget can begin their search by entering their price range; Carzing will then let buyers use additional search options to view only used models.
Buyers also can narrow down their results by selecting other criteria, too. Select to see only models in specific colors, opt for certain equipment (like a backup camera) or choose fuel type to narrow down choices to electric or hybrid models.
Carzing also lets buyers get pre-qualified for financing. This can help buyers better understand their loan options; they can view their options and find the financing that fits their budget.
By using Carzing, buyers can visit the dealership knowing the price they want to pay and the financing they want. At the dealership, buyers can focus on completing the credit application, taking a test driving and reviewing the details about the car.
When the buyer is satisfied with the negotiations, they can finalize the deal and drive off knowing they found the best car at the best price.