How Much Can You Get Off a Used Car Price?
If you have ever tried to buy a used car, you have definitely realized that the first price the dealer asks for is not the final one. Buying a used car is like a battle of bargaining with car dealers. Every car dealership that sells used cars tries to earn the majority of its profits through the sales of used cars. Used cars generate the most revenue for them. But it depends on the buyer to learn how much they can get off a used car price.
It is very difficult to find out the actual market value of a used car. The used car price depends on a lot of individual aspects that cannot always be correlated to come up with an accurate calculation. The buyer needs to be knowledgeable first and foremost to actually stand a chance of lowering the price in a negotiation battle with a skilled salesperson.
Why Used Car Prices Vary So Much
You might have noticed that the same model of used cars can be sold in different car dealerships for different prices. There can be several reasons behind this:
- Each dealer is trying to make a high profit in accordance with the cost behind that car.
- Even though the cars are from the same car model, the condition of each of them is different.
- The higher priced cars might be CPO cars, as in, Certified Pre-Owned cars that have warranties.
There is no fixed Manufacturer’s Suggested Retail Price (MSRP) when it comes to used cars. They do not possess a factory invoice or a fixed sticker price. For this reason, the price is whatever the dealer feels the vehicle is worth. And the price system and payment situation can change with whether a customer is paying cash or in installments.
When buying a used car, a lot of things come into focus about the vehicle. The car’s condition, vehicle accident history, mileage everything needs to be considered when buying the car. Each car has different problems and repairs over its life, so each can be sold at different prices. But the price can be estimated compared to other cars of the same age, year, make, model, mileage, and repairs.
New Car VS. Used Car
There are striving markets for both new and old cars in the United States. But in this economy, the sale of used cars has long surpassed the sale amount of new vehicles. New cars have a sticker price that the dealers have to abide by in normal demand scenarios. But, for a used car, there is no such issue. So a car salesperson tries to push a customer to buy used cars from their lot as there is a higher profit margin for used cars.
The fair price of a used car is something that can just be guessed and estimated. There are various websites and platforms that can give an idea about the price of a used car from just a few descriptions. What the best price is for a specific car depends on the buyer and the seller. But if the comparison of which car is better to buy, the answer is favorable to used cars. These days, a lot of certified pre-owned cars are available that have all the benefits of a newer car at a lot less cost.
How Much Can You Drive the Price Down?
Driving down the price of a used car before coming to an agreement with the dealer is very common in the used car market. Car buyers tend to look for ways to lower the price of the car they want to buy. In most cases, the dealers set a price with at least a chance of 5% profit that can go up to 25% depending on the demand for the car.
So, let’s say a car costs the dealer $15,000, and they would sell it for $15,750 in the case that there is not much demand for that car. But they ask for $20,000 initially. In this case, it is up to you to do some research to find the car’s demand, current market value, and condition before the negotiation. You can easily buy that car at $16,000 or less.
In some cases, dealers sell the cars at no profit just to get them off of their hands. But in most cases, the quality vehicles all have a similar price range. If the majority of similar quality vehicles are being sold for $10,000, then you have to drive the negotiation in a way to bring the price to somewhere around $10,000. For a car of ordinary quality and demand, you can lessen the price by up to even $10,000 if you know what you are doing.
Tips to Lower the Price of a Used Car
The main way of lowering the price of a used car before buying is to be smart. There is no way of fooling the salespeople. So we have to be smart about approaching the negotiation. If you gain an idea about how the pricing systems work and what the deals are for buying cars from the different dealerships, then you can make better results in the negotiation process.
Research the Prices of Different Dealers
It has become very easy to browse different used cars and knows their asking prices. You don’t even have to get out of your house. You can consult different websites to check how much they are asking for similar cars. What other sellers are selling and how much other buyers are paying for different cars can give you a perspective on the market status. This will give you the necessary idea before going in to buy your own car.
Look for the Vehicle History Report
The vehicle history report of a car lets you know what the life of the car had been in possession of other owners. This will help you scrutinize the condition of the vehicle. The report will also let you make the final decision of whether or not to actually buy the car. You can try to lower the price for high mileage issues, previous accidents, etc. You can have the upper hand with detailed knowledge about the car.
Negotiate the Price
You can check the possible price of the car you want to buy from Kelley Blue Book and other websites and then use that information in the negotiation. This part is the most important step in buying a used car. The negotiation can let you buy a good quality car at the best possible price. But this needs a good strategy.
- Understand the possible worth of the vehicle.
- Make a plausible initial offer on the back of the asking price. This is called the counteroffer.
- Come to an agreement that works for both parties.
- Do not be desperate. Assume that you might have to walk away if the deal falls through.
Keep an Eye Out for Deals
There are often deals that are offered by different dealers. When some cars stay on the lot for a long time, dealers try to sell those off at a lower price. So these deals can be very helpful in acquiring good vehicles for low prices. Sometimes there are choices of a monthly payment, warranty, and in-house financing deals. Learn about each of them and negotiate the terms before accepting.
For Exceptional Cases
In the used car market, there are some situations where the used cars are actually more expensive than the newer, better models. Many customers prefer to collect antique cars that have become much higher in value than their actual worth. Sometimes, luxury cars and redesigned sports cars can sell for thousands of dollars.
For these exceptional cases, the price cannot be lowered. In fact, these cars are often put up for auctions that can even increase the price of the vehicles because of high demand. As these cars are sold as luxury goods because of their unavailability and uniqueness, the target customer base is also different.
To this day, I am pretty sure that everyone knows there is a negotiation process to go through before buying a used car. We all want to buy used cars as they are cheaper than new ones. But a lot of people still get nervous about facing a salesperson and haggling over the price of a car they want to buy. Just because they are not comfortable with the bargaining, they are buying cars at a higher price.
We can take a lot off of the initial asking price of a used car. Negotiation is nothing but a mix of knowledge, confidence, and communication skills. With these, anyone can try their hand at lowering the price of a car on the lot. But as customers, we have to be understanding of the dealers’ business, just as the dealers need to be respectful towards the customers. Ant business transaction is a two-way relationship that needs to satisfy both ends to make them successful.