Purchasing a used vehicle is a fantastic way to save money on a car that you can drive for years to come. Brand new cars depreciate at an alarmingly fast pace. In fact, vehicles that are just one year old are often sold for more than 20% lower than the original price.
But this doesn’t necessarily mean that you’re always getting a good deal when purchasing a used vehicle. Used car dealerships are notorious for overpricing their vehicles to make a higher profit on cars that are worth thousands of dollars less than the asking price.
This leads many people to ask themselves: “should I buy a used car or just go brand new instead?”
Thankfully, the prices of used vehicles are generally open to negotiation. But, this can be extremely intimidating too, especially if you don’t know much about cars or are unsure of how to haggle with a car salesperson.
So, here are some tips that will help you whittle down the price of a used vehicle so you can get a great car that fits into your budget.
1. Research Reasonable Prices in Your Area
The worst thing you can do when looking at used vehicles is to come unprepared. Sales representatives will often throw around phrases like, “you won’t find a lower price anywhere” when talking about the specials and promotions they offer.
However, these could be bold-faced lies.
You’ll have a better chance at lowering the price on a vehicle if you can prove that your offer is reasonable – or that you have other options. If there is a specific manufacturer or model you want, enter it into Kelly Blue Book to see what the fair resale price is, depending on the car’s condition.
This will immediately alert you if a car is overpriced and give you a range to negotiate within. You should also do some online or in-person price comparisons in the area to back up your offer.
For example, say you are trying to understand how to buy used cars in Albuquerque, NM – where Toyota is the most preferred car brand. In many cases, dealers won’t budge on price for these vehicles due to the demand.
But, you see that the 2015 Toyota Camry you want is being sold somewhere for $1,000 less than what a dealer is offering you. By researching this ahead of time, you can show the salesperson that your counteroffer is rational, otherwise you will just go to another dealership or private dealer where you can get this lower price.
2. Time it Right
As you probably know, car sales reps tend to work based on commission – with most dealerships offering bonuses from time-to-time. This keeps their team motivated to close deals to hit their set number of sales and receive a bonus on their next paycheck.
While commission-based sales generally hold salespeople back from lowering the price too far, these bonus incentives could actually help you close a better deal.
So, by shopping for used cars at the end of the month, quarter, or year, you have a better chance at negotiation because the salesperson may be scrambling to hit their numbers.
3. Start Off Strong
It is important to show the dealer that you know what you’re talking about and set a strong first offer. There is no need to be rude, of course, but you should be quite confident that your offer is fair and reasonable.
First, be sure that you know exactly what your budget is so there is no temptation to accept a higher price. Take a look at your finances to determine how much you can afford to pay upfront. Ask around with several banks to see what type of loans you can secure before you step foot in a dealership.
Once you are ready to start the negotiation process, be sure to start low.
You know that the dealer most likely will not accept the first offer and will quickly counter, so don’t be afraid to low ball here (within reason). The best rule of thumb: start with 15% lower than the asking price and go from there.
4. Don’t Get Sucked in by Add-Ons
Sometimes dealers will throw in “special deals” instead of lowering the price, such as adding rustproofing, an extra oil change, or free detailing. These are just shiny objects they are trying to distract you with. In truth, they cost the seller next to nothing to offer.
Chances are that these add-ons are totally unnecessary. Or if their on-site mechanics do the job, it might not be done properly. You’re usually better off turning them down in exchange for a further discount.
5. Be Ready to Walk
Even if you find your dream car on the used lot, you need to be prepared to leave it behind if you cannot afford it. Salespeople will sense desperation if you really want a car – so, be sure that you are willing to walk away if you cannot get them to back down to your price point.
There are hundreds of thousands of used cars that you can easily find through an online search. Don’t get hung up on one car if the dealer is unwilling to negotiate. You will find it somewhere else, or the threat of leaving may incentivize the seller to agree to a lower price.
Conclusion
There’s no need to be scared about haggling with a used car salesperson. It is quite common to haggle, and if you play your cards right, you could score a fantastic deal.
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