Negotiating the price of the car is probably the part of the car buying process that people find most difficult. It is where you worry that the sales person is going to pull a fast one on you and make you pay a lot more than you had originally planned. If you go in armed with the knowledge of buying used cars, you’ll feel a lot more confident throughout the negotiations.
Know The Market Value
First of all, you have probably already done your research on what the price of the car should be, but it does not hurt to give things one more look before you hit the negotiating table. For example, you could check out the True Market Value (TMV) tool at Edmunds.com to see what real people in your area have paid for similar cars.
Go into the negotiations with a price that’s low, but still within a reasonable range. If you start out offering $8,000 for a car the dealer’s listed at $15,000, they might laugh you right out of the office. However, if you know that most people are spending about $14,000 for comparable cars, you might be able to start with a price of $13,000 or $13,500. You should also have a maximum amount you are willing to pay for in your head, and if the seller does not come to at least that price, it is time to walk away.
Plan Time To Haggle
Expect the negotiations to take about an hour if you are at a dealership, and less time if you are dealing with a private seller. Before you try to settle the deal, you want to make sure that you are well-fed and feeling comfortable. If you have a bit of a headache or a rumbling tummy, it will be all too easy just to agree to the seller’s demands to get out of there quickly.
The seller is unlikely to take your first offer, and there may be a bit of haggling involved. Hopefully, you will be able to agree on a price that’s favorable to you. If you are at a dealership, the seller will try to tack on many extras, such as an extended warranty, a protective coating on the underside of the car or anti-theft devices. These add to the cost of the car, but they can also give you greater peace of mind, so try to think ahead of time about whether you are interested in these things.
Be Prepared For Dealer Tricks
One thing you need to watch out for is for the seller to attempt to change the terms of your loan to make a higher price more affordable. For example, if you add a year to the loan term, the monthly price will drop. If the seller knows what your target “monthly payment” is, he can undoubtedly try to add many extras and make it fit into your desired payment by lengthening the loan. This may be affordable, but the additional time means that you will be paying more in the long run.
No matter how much you like the car, always remember that you can walk away from the deal at any time before the papers are signed. This is your biggest negotiation tool. The seller wants you to buy because they want the money. If you do not buy this car, there will be other cars that are just as good in your future. The minute you are desperate to have this particular car is the moment you lose your power.
Private Seller Caution
When you are dealing with a private party sale, you need to make sure the seller has the title and can sign it over to you before money changes hands. It is also smart to pay with a cashier’s check from the bank since you will then have a receipt of the payment you made. Also, the seller will not have to worry that you do not have enough money in the account, and he will have no excuse, not to sign it over to you.
Remember, no matter where you purchase your car, you need to call your car insurance company to add this car to the policy before you drive it away.