When you purchase a vehicle from a used car lot, you might expect there to be a little bit of haggling over price. It’s just part of the process, and it’s something that consumers either love or hate. On the one hand, you can potentially negotiate your way into a better deal and a lower price. At the same time, negotiation can also be a little bit stressful, especially for those who have never done it before and may not know the best strategies for getting the price they want.
How to Negotiate Car Price?
Before you go to select a used vehicle, there are a few basic points to keep in mind. The first is that, while a little negotiation is acceptable, there is really only so much that dealers can do to get you the price you’re after. Their profit margins may not be as much as you think, and they obviously need to make money to stay in business. Be willing to negotiate, but also be realistic in your expectations.
Also understand that the price you’ll get for a vehicle hinges on the fair market value of that vehicle, which means, of course, that you’ll find more wiggle room with older cars and trucks than with brand new models. A big part of the negotiation process is picking a car that’s in your price range.
How to Negotiate Used Car Price
With those points made, here are a few additional tips for successful negotiation.
Choose your vehicle wisely. We recommend trying to negotiate for used cars that are roughly two years old, if possible. These cars will have lost as much as half of their original sticker value, so you’ll have some wiggle room, yet they still look basically new and have plenty of life left in ‘em.
Know about what the vehicle is worth. Get all the car’s information—including the mileage—and input it to KBB or NADA to get a sense of what the car’s actual value is.
See what similar cars go for in your area. Autotrader.com is a good resource for this.
Ask the dealer to provide you with a CarFax report. This will give you additional information on vehicle history, and potentially give you some leverage to get the price down a bit—especially if the vehicle has been in an accident, etc.
Make an offer for 15 percent off the asking price. Understand that the margins most dealers are working with are around 20 percent. You’re not going to get any more of a discount than that, and may not get higher than 10 percent, so 15 is a good starting point.
Be willing to walk away. If you don’t like how the negotiations are going, cut your losses. That’s one of the most powerful tools in your negotiation toolbox—your ability to walk away.
The bottom line: You can always negotiate on price, just so long as you have the right expectations. Learn more from the Get My Auto.