Negotiation skills and buying a Used Car

Parent Cafe
21

Once when I had to buy a car (this was '88 or so), it happened that one of my co-workers was a former car salesman. Here’s what he told me:

Know two things that all car salesmen know:

  1. A buyer who comes onto a lot is going to buy a car, here or elsewhere.
  2. If the buyer leaves, they will not come back.

So know that in the end, they are highly motivated to sell you that car.

My co-worker told me: Tell them your bottom line up front, and let them know that it is in fact your bottom line, and you won’t budge from it. They won’t believe you, so you’ll have to show them. Every time they come back with a lower proposed price, tell them No until they meet you. Be fully prepared to walk if they don’t.

It worked. I’m not a negotiator either, but it wasn’t hard. I just kept saying No. At one point, I gathered my things and said, “I guess we’re not going to be able to agree,” thinking it really was the end with this dealer. And to my surprise, the salesman said, “No, let me try one more time.” And lo and behold, he came back with my price.

22

I have a whole different approach. I only buy used cars. I’ve never bought a new one.

When you buy a car new, the average condition of the car is the same for all new cars. Therefore the best you can get is average. Its value depreciates like the average car, etc.

Over time, cars depreciate, some people drive them more, and some people drive them less. Some people take better care of them etc. Nonetheless, the standard deviation on the valuation of the car is actually quite small compared to the mean of that vintage.

Therefore when looking for a used car, I don’t want average. I don’t want good. I want excellent. If you can hold out for that rare creampuff, you can get a great deal because there is only so much over book value that you can pay because you could only insure it for book value. Options are far less expensive on used, so I only buy cars that are fully loaded. I’ve used this tactic often. My position is that I can only pay about $500 to $1000 over book value. I’ve walked out of dealerships and been called back 15 minutes later.

I’ve gotten cars for book value or slightly above that had a utility far greater than the book value because of the rare excellent condition they were in.

The other thing I’ve found, especially on Japanese compacts is that the creampuffs are almost always the ones driven by women. Men will drive a car into the ground, but women will often put the car up for sale long before it’s expiration date, often as soon as the warranty expires.

Finally, there is no substitute for the independent mechanic who you develop a personal relationship with and who you trust. I’ve been going to the same Japanese car mechanic for 20 years and we take care of each other. I never complain about the price, and he makes sure the cars stay in perfect shape, erring on the side of safety. He’s expensive but worth it. I’ve saved fortunes on the cars. I make sure that I will be able to take the car to my mechanic on the phone call before I head out to the dealership. That’s non-negotiable. If a dealer or owner says that I can’t, that dealer doesn’t exist as far as I’m concerned.

23

My husband is an excellent negotiator, but after shopping all over town, he bought a used car from Carmax. The pricing was very competitive despite the no haggle element. Kelly Blue book’s website is useful for researching fair market value taking condition and mileage into account.

24

This is just it. Bad attitude. Why is this a “trick”? You determine what you are willing to pay for a car and you stick to it. And why should a dealer sell you a car at a loss (as you asked in the OP)? He is entitled to make a little profit as its his business, but you can determine how much you want to pay and whether or not its a profit or a loss is not your concern. Its not a matter of sticking it to the seller and making him take a loss. Why take such a negative attitude. If you want a certified car with any kind of warranty, there is a cost for that. Otherwise buy off craigslist. They don’t have rent and overhead and employees to deal with. Dealerships do. And if you try to give the dealership the shaft, remember, you might be coming back to them for maintenance on your certified car.

25

Didn’t you buy a car back in 2009? Asked for for and got lots of help here on cc from kind and generous posters: http://talk.collegeconfidential.com/parent-cafe/800093-help-my-car-just-quit-on-me-p6.html How did that go? What did you buy? Were you able to get the price you wanted? Was it certified preowned? How did the negotiations go? What did you learn from that experience that you can share with posters here?

26

Great inputs, thanks.

We seem to have some that believe the KBB’s fair price is a good guideline and some don’t. I am in the “don’t believe” group. The TrueCar site initially did offer real information and the dealers took legal actions, based on what I read on line. TrueCar now has to change their approach.

My colleague got a new car and disclose the price he paid. I went on to the some of these sites and found his purchase was way below the best ever deal given. In other words, KBB might give you some reference so you will not grossly over pay. But I don’t think their numbers are real.

Have been doing a lot of on line researches. CC parents, most of us, are among the best consumers in terms of getting all the facts and information to make our decision. At the end of the day, it is how badly you want the car vs. the dealer wants to sell it.

This car we have put two offers in has been on their lot for over 90 days. The manager told us their cost and the CPO cost. Per him, they are selling me the car at their cost. My offer is about 8% lower than that. Their asking out of the door quote is about 15% below the KBB’s average CPO price. The dealer also offers close to 0% financing.

I don’t have to have this car but I would really like to have it.

Will see.

The problem here is we don’t know what is the fair price. More than likely, in this situation, is whatever the dealer could get them out of my hand.

We left after making the “final offer”. They simply shake our hands and sent us out of the door.

I don’t know if this is a mistake - I studied the car very intensively before I show up. That appears I am so into this car. And I really enjoyed the test drive - it is a fine car. may be I should have just casually dropped in like I were going to do some tire kicking.

27

I know this goes against common wisdom or whatever, but have you checked prices for new cars similar to what you are looking for used? I recently purchased a Subaru Impreza for one son, and I couldn’t find many used that weren’t close enough to the new price to make it worth purchasing used. I could have had CarMax ship a car to close by, but I would have had to pay hundreds of dollars (shipping from WA to east coast, for example).
Also, I know you didn’t ask about this topic, but you may want to check insurance rates before you buy. I bought my other son a used Scion TC last year (used CarMax, and it was easy, but certainly not the "best deal"around). I just assumed bc it looked similar to a Mazda 3, Honda Civic, etc. that insurance would be similar. The insurance on that car is really high. I think it has to do with it being a 2 door, and it’s considered sportier. On the other hand, when I called about insuring the New Subara, I learned that it would be $250 less per year than the cost of insuring the 5year old car he had before.
Good luck. Let us know how it turns out.

28

NADA and Consumer Reports also have used car pricing info. If you check multiple sources, you at least get an idea of what is in the realm of possibility pricing wise. Sometimes dealers call you after you walk out with better pricing. If they don’t, I suspect you aren’t close enough for them to feel a deal is profitable.

29

Is this for your new Bugati or Lambourghini :slight_smile:

You have been to this dealer, and made offers twice on this car that you don’t need but would like to own? They have said no to you twice? I serously doubt that you are going to get them to say yes. What is so special about this car?

My older Volvo was certified from Volvo…and when I went to buy it, it was in the auction line at the dealership. I was prepared to pay cash for the car and told them so. I also gave them my TOP price, and was clear that I would not go above that amount. It was $2,000 less than they wanted. I left. I wanted the car, but I didn’t need the car. By the time I got home, there was a message on my answering machine telling me the “manager had reconsidered” and could take my price. I went to the bank, got a bank check, and bought the car.

This dealership is not contacting you…and you have been there twice. That should tell you something.

Are you a member of Costco or BJs? They have car buyer programs, as do some professional organizations. You might want to look into these. They are for new cars, and I’m not sure if they have them for used…or not.

30

KBB is known to provide inflated prices for new cars. Over at the Edmunds boards, very few people take KBB seriously. The NADA Blue Book is more respected as a reference. I’ve found that the room for negotiation depends on the popularity of the car. It’s difficult or next to impossible to make a dealer budge for a desirable car. When things are really slow, they are desperate for any offers. In 2009, when the economy was in the tank and dealers were desperate for a sale, I managed to get a great price for my wife’s car only dealing on the internet. I made my offer, and the dealer accepted it. Drove to the dealer, gave him my credit union check, and was out in under an hour. Even the attempted extended warranty sale was pro forma and the pitch was given half-heartedly.

31

@1214mom Yes, I started the process by shopping around for insurance. Only after I have a firm believe I could finance the insurance, then I start calling the dealers.

Also, their asking price is way below 50% of the original MSRP.

You know me well T1 :slight_smile:

Mid-life crisis

32

I used to be a great negotiator back in the day when I bought and and sold collectibles. I used some of those techniques when my husband and I bought our home 25 years ago. Essentially, you can’t get emotionally attached to the item, so you are believable when you give your rock bottom price.

With our house, we offered $x with some contingencies. Seller said no way. But then seller had the audacity to say they would only accept one more offer from us. (Note to seller, don’t do anything to provoke my ire!).

We offered exactly the same price, but withdrew the contingencies. Our realtor thought we were crazy, and my husband started waffling, but I told him we couldn’t afford more than $x, so if we didn’t get it, we were better off.

They accepted out offer within 12 hours.

Ahhhh, the memories!

33

DadII, if this is indeed a luxury sports car of any kind, I honestly think the likelihood of a reduced piece is even less.

My uncle worked for a sports car dealership. Because many of these were sought by the right driver…they were willing to keep them on their lots for an extended period of time.

34

Yeah, you made the #1 mistake in car buying – you fell in love.

Or, as my advisor told me, you have to be fully prepared to walk away, and it doesn’t sound like you are. So, they’ve got you.

35

KBB is not bad, but there is no common idea of what “fair price” really is anyway! KBB is a consumer tool, the real value if what the car will bring is the auction price, and that is kept close.

As other have noted, no two used cars are the same, and that makes pricing tricky. There is a lot of gambling on both sides, and sometimes dealers have cars that they acquired for less than auction price, and that means they can sell them for less than usual… although they would prefer NOT to!

So buy it! If you believe that this is their real cost, why are you expecting them to take a loss? If you don’t believe them, why are you making a major purchase from liars? 15% below is beyond what I would consider “normal” error in KBB, that sounds like a pretty good deal, so why do you think you can squeeze more out of them?

This car is a unique item, there is no real “fair price”, there is only what they are willing to sell it for and what you are willing to pay for it. Yes, they would like to make a profit, just as you would like to keep as much money as possible. None of that really matters, though, unless you are comparing it to another car that would also make you happy.

Yes, you’ve made mistakes, but what really matters is what you want to do from here. I would not consider their current offer to be any more negotiable, and I would not be surprised if they sent that car to auction soon. If you want this car, then you should move soon, or find some other car at some other dealership as an alternative - I suspect that you are close to becoming the kind of customer that they try to hurry out the door because you appear serious about using up time but NOT serious about buying.

36

I bought a used car last summer. I did a LOT of research beforehand and had it narrowed down to 3 specific cars I wanted to test drive. I showed up to the dealerships (there’s an auto mall close to where I grew up and where I was buying the car so lots of dealers) with printouts of the specific cars I wanted to test and didn’t even look at any other cars, was very upfront that I needed to buy a car that day and was only willing to pay XYZ amount out the door. Drove a Jeep Compass, VW Tiguan, and Nissan Rogue. Liked the VW the best, but the dealer was totally unwilling to sell it to me for less than sticker price, claiming that he was already taking a $5k loss on it. Dad (who was with me but had been silent until then) asked if the dealer was accustomed to selling cars at a loss, because if so he wouldn’t be open very long. Guy was stumped. Credit union (who I had full financing with) refuses to finance anything over KBB value, so I told them I had to walk away. No excuses, just “I am not willing to pay more than X amount” and that was it.

I walked away and got a call from my credit union asking if I was planning to buy the car (because I had already filled out some paperwork.) When I said we couldn’t agree on a price, she took down what I was looking for and said they would help me look and wouldn’t send me suggestions unless it was within my price range.

Ended up going back to the Nissan dealership and got a great price on a VERY gently used car (only had 8.5k miles on it when I bought it) for the price I wanted and much better customer service, much more willing to work with me. The finance guy even said he was surprised VW wouldn’t make me the deal I wanted because it was reasonable and the end of the month.

VW called me back the next morning–after I’d already bought the Nissan.

I’ve been very happy with the Rogue and think I made the right decision. Friends who know a lot about cars say I’ll be happier with the Nissan anyway since VWs are so pricey to maintain.

I think what made it easier for me was knowing that I wasn’t going to ever see these people again–despite their friendly nature, they’re not my friends, they’re doing their job. I also knew exactly what I wanted to pay going in, and knew which specific cars I wanted to look at and didn’t look at any others (I think I sat in one other because the Jeep guy REALLY wanted to sell me a car, but didn’t even test drive it because I didn’t like it.)

Ended up getting exactly what I wanted for the price I wanted and have been head-over-heels in love ever since.

I did buy the extended warranty only because the mileage was so low and I know I’m going to have this car for a long time. I also ended up buying a protection package in which if I blow a tire, break a window, lose a key, or get a ding, they’ll repair it for free for 3 years, because I was driving across state lines into unfamiliar terrain less than a week after I got the car, and I got a $500 instant rebate so I was playing with house money.

Overall, not a terrible experience (especially once I left the sleazy VW dealership) but not one I’m excited to repeat in a hurry.

Last thing: I probably did get somewhat lucky because shortly after I bought my car they introduced the new body style of the Rogue, so they were probably trying to get rid of the old ones in addition to it being the end of the month.

37

I just bought a used Mini from the only dealer in Oregon (so not a lot of opportunity to comparison shop). The sales woman was about five feet tall, looked 18 (if that), was dressed in a hoodie and black jeans, and had a tattoo of a mini on her hip. (I don’t actually know about the tattoo.) It was absolutely the best negotiation ever. We drove the car, left the dealership, researched prices, and sent her a text with an offer based on blue book. Immediate reply: “I’ll check with my manager as soon as I finish with this customer.” Three hours later we got an offer letter at our price back from her, we signed, texted it back, called the finance guy with my SSN, and picked up the car with a 0.9% loan the next day. We might have left a few bucks on the table, but not many, according to the Blue Book. Oh, and Miss Turns-Out-to-be 24 (who has worked at the dealership since she was 18–for eight years) is the dealer’s top sales person. Yes, I asked how she’d ended up selling cars.

38

Prediction. DadII will buy this car…for the price the dealership is asking now…if it still even there to buy.

It sounds like this isn’t a common car they have on their lot. They know he is interested…and they know he likes and wants the car. They have absolutely no incentive to come down on the price, nor should they based on the data posted here. And he has already used up their time (and likely most of their good will).

39

My H just turned 60. I got him a motion activated light for outside the garage.:slight_smile:
My 58 th birthday will be coming up in five months however. Time to start plotting!

I agree that negotiating for specialty items would be difficult.
If it is exactly what you want, then just pay it.
Whadda gonna do with the money you save, buy another lens? :wink:
We did order a car from the dealer once, unfortunately, these days it is much easier to get a manual transmission that way. Hard to get much of a discount though.
Like to get another manual, but would rather buy " gently used".
The main thing would be to start car shopping well before your main vehicle is beyond repair, but if your current vehicle is only 5 or 6 yrs old, I’m surprised that you want to replace it already, unless you were in an accident.
That reminds me of my favorite car, Toyota SR5 sport coupe. It was also a dealer demo, & I drove it for about 5 years, but then I was in an accident with an ancient Mercedes that was as heavy as a tank. I believe it may have put a dent in the bumper of the Benz, but it cracked my frame.:(.
Not safe to drive after that I was told.