Negotiation skills and buying a Used Car

[cosmicfish]

I used to sell cars, used and new, for about a year - sold more than a hundred in that time, but hated every minute. Won’t go into that here, but let me parse through some things on here…

1. Search cars at dealers for several weeks before planning to buy and take note of price changes of similar cars to the type you’re searching for…you can get an idea of how long it’s been on the lot from the car fax report.

If you have time for this kind of thing, sure.

2. Go in to buy at the end of the month.

Absolutely. Both salesmen and managers get paid based on the cars they sell each calendar month, so on the last day or two they are generally willing to take a lower profit if it means they make their bonuses.

Go in alone and say the car is for your spouse and she/he is away but has to agree on car. Gives you an opportunity to step away and think about the offer they’re making while you place call and more time to think while talking it over with spouse. Also gives you reason to walk away and if they are anxious to sell that car, they will start making reductions.

You don’t need excuses - just be willing to walk out. Any excuse you give a salesman is a tool they will try to use to get the sale. People don’t like being proven liars, and the dealers know that, so if you give them a reason you can’t buy the car they will help you to fix it. When they do, it becomes that much harder for you to turn down the deal.

3. Have a “buy now” price in mind for what you want to spend but don’t divulge this number…unless you tell them a lot less…depending on your research for what similar cars are going for. Earlier in the shopping process, have someone write down the various license and dealer fees … and calculate what the sales tax will be. Tax, fees, and sale price will be your “out the door” cost. The sales price and some of the fees are negotiable.

Most fees are not negotiable, and if they are then they aren’t fees, they are something you are being sold. Absolutely get all your info up front, and remember what matters to you. Dealers want to maximize the price you pay for the car, their finance departments want to maximize the amount you pay in interest (to them, of course!), the most common tactic in the world is to use the numbers they don’t care about (term, mostly) to lower the number YOU care about most (monthly payment, generally) without touching the numbers THEY care about.

4. Start your negotiating price lower than the fair price. Like $500 at least. You don’t want to start with the fair or average price unless you are truly going to get up and walk out of the dealership if you don’t get it.

Again, people don’t like to be proven liars. If you offer a price, expect to honor it, because there is a part of your brain that will want to make you. Likewise, be aware of the “If I, will you?” sales technique for the same reason - once you commit out loud, it is hard to back off. So if you have to give a number, give a low number but one you can live with it. If you go TOO low, of course, they will try to shift you to a cheaper car - they can make more profit there if you do, and make you feel like a cheapskate (and thereby more willing to spend) if you don’t. There’s a lot of psychology behind all this.

5. Don’t start negotiating on price until you’re ready…have all car history info on the car, have checked on car repair websites for that make and model year, googled owner complaints on the make and model year, know what potential repairs that car is prone to based on how old it is.

Yes. Negotiating sucks, and you don’t ever want to go into it unless you are willing to buy the car, and that means knowing what you are getting into.

6. Have alternative cars in mind at rival dealerships and don’t be shy about saying you’re aware of other cars and don’t mind a long drive if necessary to check out those cars.

Yes, absolutely, but the most common counter-tactic is to drag things out - if you spend 6 hours at dealer A, they know you will more likely take a bad deal there than risk spending another 6 hours at Dealer B, especially with no guarantee of a better deal.

7. Don’t get suckered into buying an extended warranty on a model/year with a great record for customer satisfaction and repairs. That’s what you do the research to find out.

Extended warranties are a tricky subject. Overall, they are a bad deal, but they are right for some people. Just remember that the costs and even content of the warranties are negotiable as well.

8. There will always be another similar car…unless you really need the car right away, be patient and keep looking for the car and price you want.

Absolutely. You get your worst deal when you are in your worst bind.