How Much Can I Negotiate Used Car Price?
If you are new in the automotive market, one thing you should know is, in the current auto market, considering buying a used car over a brand new car is quite a clever decision. The main reason for this is the depreciation cost of the car. Most new cars depreciate about 20% within the first year and lose almost 60% of market value within three years. It might be dispiriting for the car owner, but a piece of pleasant news for used car buyers.
But the used car buying process can be challenging for you if you are new to the used car market. At first, you have to fix your mind on a specific model, then learn its price according to its current condition, and after that, negotiate the price with its owner. It might look easy now, but things can get complex in the process. So, let’s learn ways how you can negotiate and buy a used car.
How much does a Used Car Cost?
Once you have fixed your mind upon what used car model to buy, now it’s time to learn how much a used car like that typically costs. Usually, most used cars cost almost 50% less than when it was new. But during the pandemic, due to the global microchip and inventory shortage, both branded new car and used car prices have risen. The good news is, used car prices are decreasing in 2023, but still not as low as it was before the pandemic.
How much you should spend on a used car depends on your budget. You can purchase a used car by paying cash, going for a monthly payment, or getting an auto loan. If you are planning on buying a lower price used vehicle, it is better to pay cash. But if you are going for an expensive used car, it might be wiser to get an auto loan. Before getting an auto loan, check ways how you can get an auto loan and compare several financing options.
Few Steps Toward Buying a Used Car
The best way to learn how to buy a used car is to research. You should research every little detail before physically going to buy a used car. Knowing these little facts will surely help you get the best price for a used vehicle. Here are a few ways you can research before buying a car:
Start Researching Online
The best way to research used cars is to start researching online. This pricing homework requires less time than in-person research. Research the model you want, its mileage, safety, and technology features, and how much its features and price differ from other similar vehicles. Also, check car websites to learn how the prices differ from site to site for the same car or other cars.
You can use Kelley blue book, National Automotive Dealers Association, and Edmunds pricing tool to compare the pricing and other information. Compare their suggested pricing with the manufacturer’s suggested retail price (MSRP) and see whether it lies relative to the MSRP. You can also check used car dealership websites to see car reviews, detailed, searchable listings, buyer guides, etc.
In-person research requires hard work. But this way, you can get a careful visual inspection of the car you want. You can talk to car dealers or private sellers face to face. This will help the negotiation process to get easier.
You can also go for a test drive, check the vehicle history report to confirm the odometer reading, see the maintenance report or whether there were any severe mechanical or cosmetic damages, and ownership history. If you see any reluctance in the seller’s behavior, it is better to stay out of such dealings.
Negotiation Skills to Get a Fair Price on Used cars
Negotiation is considered a form of art. Not everyone can negotiate in accordance with the situation. So, if you have good negotiating skills, you are more likely to get a better deal than others. Here are some tips on how to negotiate effectively:
Try to Be Strategic
Before the negotiation begins, you have to set a goal. First, decide the amount you are willing to pay, then start the negotiation process with the amount rationally lower than that. Never Start the negotiation with the maximum price.
Be as polite as possible with the people you are going to negotiate with. Your gained knowledge on a used car purchase can surely get you the best deal. So let those people know that you have done your homework and know what the car is worth. If the dealers say that they can’t go lower than the sticker price, you can always walk away.
Try to Be Persistent
There may be situations where the sales manager is not interested in the offer you have made. So rather than agreeing to their offer, be persistent and check other dealers. It might be possible that they change their mind and call you back to say that they are willing to reconsider your offer. Be more confident, and don’t let them intimidate you with their position.
How to Negotiate Used Car Prices with Private Sellers?
If you want to buy a used car by paying cash, then buying from a private seller might be an option for you. But do check which one will cost less, buying from a private seller or a car dealer.
Whether you can negotiate the price of a used car depends on the seller. Usually, when a seller is in need of urgent cash, you might be able to negotiate down the price. But if that’s not the case, you might have a hard time negotiating the car’s price.
Begin negotiating with less amount than you have originally planned for or are willing to pay, so you can leave room to work the way up. For example, you have set your mind on spending $10,000, so your opening offer should start from $9,000. In this way, both you and the seller can keep bargaining until it reaches the amount you have initially planned for.
How to Negotiate Used Car Prices with Dealers?
Buying a used vehicle from a dealer is more advantageous than buying from a private party. The reason is it’s faster and easier. Car dealerships can assure fair market value on the used car purchase.
You can purchase the car by paying cash or using an auto loan. Also, you won’t have to go through the hassle of complex paperwork since most of these will be done by the car salesperson. It is one of the best ways to get a good deal and save money.
Ways to Talk Down the Price with the Dealer
Your negotiating style has a lot of impact on the car salesperson. As you have already done your research on a used car purchase, you will be able to negotiate better. Then check how much trade-in value you can add. Check your budget to find out how much you can afford to spend. Also, determine your opening offer and the highest price you want to invest in. Be confident while bargaining with the dealers, and don’t let them intimidate you with their negotiation.
Ways to Negotiate Certified Pre-Owned (CPO) Car Prices
CPO cars come with warranties and are mostly offered by luxury brands. These vehicles are thoroughly inspected and cosmetically or mechanically well maintained, and any damages are addressed by the dealers. Also, it is quite confirmed that the car was well-maintained by its previous owner. As a result, CPO cars cost a bit more than other used cars.
So you need better negotiating skills for such cars. While negotiating, check all the details and paperwork related to the car, such as their vehicle history report, inspection report, warranty, etc. Check service loan cars, trip interruption protection, safety features, etc. Also, Do not forget to check whether the initial guarantee is left or has already ended.
If you have already decided which car you want and decided how much a used car like that should cost, you are already halfway there. You can check online sites such as Kelley blue book, Edmunds, or NADA to find out the worth of a car by providing them with little information about the car. You can buy from a private seller, or you can also go for dealers, as both have some pros and cons. By thoroughly inspecting and negotiating, you can surely get a fair price on your desired used car. Check out Zippy Cash for Cars to get more tips on buying a used car!