Should You Buy A Used Car Privately Or From A Dealer
The answer depends on your priorities. Do you want the process to be easier or cheaper? If you want it easier, then buying from a dealer makes sense. Theyll usually accept a trade-in. They have much more experience handling all the required paperwork than the average private seller. And aside from taking care of things like registration and transfer of title, dealers will also offer a warranty.
When it comes to price, however, youll usually do better with a private seller, especially one seeking an urgent sale. A private sale can produce amazingly good value for money – but there are potential pitfalls to watch out for. Sellers arent required to disclose possible problems or provide a warranty, so any mechanical issues will be your responsibility after purchase.
Thats why its so important when buying pre-loved through a private seller to conduct a test drive at all speeds in a variety of driving environments, ask to see a service history and roadworthy certificate, hire a mechanic to inspect the car and provide a written report and obtain a written receipt that contains full buyer and seller details, sale price and vehicle identification number .
You should also use Budget Directs free PPSR car history report. This will tell you if the car has any finance owing or previous insurance claims and whether it has been stolen or written off. And better yet the tool is completely free to use!
Buying Used From Private Sellers
You can often find great deals on cars for sale through private sellers. Sites like Craigslist and Auto Trader can help you connect with sellers who have used cars in your desired make and model. You can purchase a Vehicle History Report to be certain you know the complete background of the car. Here are some benefits to skipping the car dealership and going straight for a private seller.
- Save money: Buying a used car from a private seller can save you as much as 12 percent, according to pricing experts. If youre good at negotiating, you may be able to shave even more off that purchase price, although you wont have the power of a trade-in as you might at a dealership.
- Quick turnaround: Typically, you can finalize a used car purchase fairly quickly with a private seller. Many are motivated to sell, so you wont deal with stacks of paperwork and multiple visits to a lot.
Invoice Price Vs Msrp
Both invoice price and MSRP describe the cost of a vehicle, but its critical to understand how they differ so you can negotiate a fair price.
The MSRP, or manufacturers suggested retail price, is the price at which car manufacturers recommend dealerships sell their vehicles.
The cost difference between the MSRP and the invoice price can vary proportionally and numerically. For example, an economy car with no options in the base trim level would likely have a slight difference between the MSRP and the invoice. On the other hand, a popular luxury vehicle may have a significant difference in invoice price and MSRP.
What is the invoice price? The invoice price is the amount paid by the dealer to the vehicles manufacturer. The difference is kept as profit if a dealership can sell a car for more than the invoice price. The invoice price typically includes the vehicles base price and any additional costs incurred by the manufacturer, such as advertising.
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What To Do When The Car Salesman Wont Negotiate
If the car salesman wont negotiate, it can put you in a bit of a sticky situation. It is important to think about your position.
Firstly, do you really want this specific car, and this car only? Or, would you be happy to explore the market and find a better deal on your new car? Remember, there are other dealerships!
Alternatively, think about the maximum price you would be willing to pay. Does the current price exceed this? If not, you may be disheartened about not being able to get a discount, but if the car lands within your price range, why not take it?
Of course, you could always walk out the door in the hope that the car salesman will change his mind. However, there are no guarantees, so this is a risk to take.
Why Paying Cash Is A Good Idea
There are several benefits to walking into a dealership and paying cash for the car you want instead of taking out an auto loan with a monthly payment schedule.
1. You’ll spend less on the car you want: Because you are not relying on a car loan to pay for the vehicle you need, you will not be paying any additional money for your car by way of interest, so your car costs less overall.
Take a look at a car loan of $32,000 at a 6% interest rate over five years. Paying cash means you will save over $5,000 because you are not paying interest on a loan.
2. You already know what you can afford: This makes finding a car within your price range an easier task, and there are no monthly payments to contend with.
3. Negotiations are more effective: Its easier to negotiate with cash in your pocket since you know what your limit is and the salesman knows youre a serious buyer. You may have heard that cash talks, and this old adage holds true when you are paying cash for a car. If you have cash, the salesman set up and listen, since they are looking at a guaranteed sale. This means theyre usually willing to budge on the asking price
4. There is a potential for discounts: Because of the upfront payment without the wait, some dealerships are likely to knock some off the purchase price just for cash buyers or offer other incentives for buyers.
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When Talking To The Salesperson
- Be friendly and polite, but avoid letting the salesperson know your top limit.
- If youre a cash buyer, dont tell the salesperson this straight away. Dealers make bigger profits on finance deals, so let them bargain the cars price on this basis. You can then decline the finance deal later in the process.
- Start off by stating an amount lower than what youre actually prepared to pay you can then gradually increase it if necessary.
- When you make an offer, dont speak again until the salesperson replies.
- Be as positive as possible about your aims. For example, dont say Can I have a discount? Instead, ask How much discount will you give me?
- Some negotiators start by saying theyre not prepared to pay the price advertised, but remember they ARE there to do a deal!
- If youre struggling to get a discount but you want the car, offer to close the deal there and then if you can both agree a price.
- Dont be afraid to walk out if the dealer isnt prepared to negotiate or move much on the price.
When youve agreed a deal, its still possible to get out of your car finance arrangement.
Find out more about ending your car finance agreement early.
How Much Will Dealers Come Down On Used Cars
The short answer: yes but it depends. You have to know how to negotiate used car prices, know what to research and understand exactly how much the listed price is negotiable. There are a multitude of other considerations as well. You have to find out: Does the dealership have a non-negotiable, one-low-price policy? Are you buying a certified used car? Were others successful in getting a lower than listed price? By doing your research beforehand, you’re in a better position to get a lower price on a used car.
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A Tough Negotiating Market For Used Cars
Negotiating isnt easy right now with the huge demand for used cars, says Used Car Dealers Association of Ontario executive director, Warren Barnard. Used car prices have crept closer to those of new cars.
The price you see listed on online marketplaces that you might see from a dealer, theres likely not a lot of wiggle room around there, Barnard says. The dealer has paid a lot more than they normally would have for that vehicle, so dont think that the dealer is gouging the prices. Theyre not.
Barnard adds that negotiation is easier if you come prepared with your research. If you have seen several used car dealers selling the car you want, you can use that as leverage.
Will Car Prices Go Down
The prices of new cars will not go down soon. Since the COVID-19 pandemic began, car prices have reached an all-time high. In fact, in November 2021, the average used car cost 41% more than before the pandemic. According to money expert Clark Howard, the cost of vehicles will gradually improve throughout 2022.
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Walking Away Might Be Ineffective
When it comes to knowing how to negotiate a car price, leaving the showroom in a huff – real or manufactured – is not as effective as it once was for getting the price down.
Since so much vehicle information is available online, both would-be customers and dealers know roughly what the right price is.
However, if the salesperson wont budge on the price, you know where the door is.
With a new car you’ll need a new vehicle breakdown cover. Get a quick quote at startrescue.co.uk today.
Find Ways To Save Money In The Long Run
If your used car dealer will not budge on price, another way to negotiate with them is getting them to throw in perks that will save you money in the long run. Barnard suggests asking for in-kind services, like winter tires or oil changes.
Another way to reduce the costs of the vehicle is to trade in your old vehicle. The dealer will take money off your used car purchase based on the value of your old car. Because theres high demand for used cars right now, youll get top value for your trade-in, Barnard says.
Asking good questions can also save you money in the long term. Barnard recommends looking into things like the mileage of the car or, if its a used electric or hybrid car, the quality of the battery, since this is a very expensive part to replace.
And while you may not be able to save money on the purchase price of a used car, you can save on the insurance costs for it. Comparing car insurance rates from multiple providers will ensure youre getting the lowest premium for your coverage needs. And the good news is: used cars tend to be cheaper to insure than new cars since their overall value / cost to replace is generally much lower than that of brand new vehicles.
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Negotiate With A Private Party
Once you find a vehicle, you want to buy it from a private seller. You first want to get the vehicle identification number , so you can review the vehicles history. This will keep you from wasting time trying to buy a car with a severe discrepancy.
I recommend reviewing the on the vehicle. This will keep you from wasting your time attempting to buy the car.
When contacting a private seller, be polite and ask many questions. This will give you an advantage when you start the negotiation process later. You can cross the vehicle off your list if you dont feel good about an answer.
Ask the seller these types of questions:
- Whos name is the car titled?
- Why are you selling the car?
- How long has the vehicle been for sale?
- How many miles on the car?
- What was the vehicle used for?
- Do you have the maintenance records?
- Did you buy the car new?
- What is the overall condition?
- Does everything work?
Know When To Walk Away
Before you enter the negotiation for a car, it’s important to know both your ideal price and the maximum amount you’re willing to pay. If the dealer isn’t willing to offer something within your range or displays aggressive sales tactics, don’t be afraid to walk away.
In some situations, even suggesting that you’ll walk away may be enough to get the dealer to work with you. But if not, you can go to another dealer in your area.
Note that this is easier said than done if you’re on a tight deadline to buy a new car. As such, it’s best to avoid waiting until you absolutely need a new vehicle before you begin the process of buying one.
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Negotiate A Better Price With Car Guide
If you want to save time and money during the process of buying a used car, check out Car Guide today.
Car Guides Buyers Report enables you to access a mix of proprietary and industry data relating to the car youre considering buying. Our Buyers Report which also includes true cost of ownership, will provide you with all the information youll need to confidently negotiate a better price.
Pros And Cons Of Negotiating A Car Price Online
Image via Flickr by crash71100
The choice to negotiate a car price online or offline usually comes down to personal preference. While some people feel more comfortable haggling face to face, others may prefer to have the time to carefully devise a negotiation strategy by going online. You can decide whether negotiating online is the right option for you by properly weighing its pros and cons.
The main advantage of buying a car online is that it allows you to take your time. You can do research to find out the market price of your desired vehicle and determine whether the dealer is offering you a fair deal. If you feel that the price is too high, you can counter with a lower price.
Additionally, communicating with a dealer online enables you to control the pace of your negotiation. When you’re haggling with the dealer in person, the conversation can move at a quick pace and get confusing. In such a situation, you’re more likely to make a costly rash decision. If you’re communicating with a dealer via email, you can slow down the negotiation process if you ever feel that the situation is beginning to flare up. This allows you to stay calm and have the presence of mind to focus on getting a good deal. Being in the comfort of your home also helps you maintain your composure.
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Research What Incentives Are Available For The Car You Want
Automakers, like Honda, Toyota or Ford, might offer dealerships and consumers incentives to choose a particular car model. Know what these incentives are ahead of time to make sure youre getting them included in your final price.
And if youre planning on financing the car, check to see if there are any low-interest-rate offers available from automakers for the specific car model youre considering. These offers could save you more money in comparison to a loan from a bank. But make sure you have a backup plan lined up in case you arent approved for the promotional interest rate.
Can You Negotiate Used Car Prices
Thats what we believe too, which is one of the reasons why we created Car Guide.
Even if you dont think negotiation and haggling is your strong point, youve got nothing to lose. The worst that will happen is youll have to decide whether youre happy to pay the asking price. And if it all goes to plan, you might even bag yourself a bargain!
Read on to learn how to negotiate a better deal and possibly lower price with confidence.
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How To Negotiate Car Prices With A Salesperson
Use this cheat sheet to negotiate the best auto loan rates on new or used cars!
The best way to learn how to negotiate car prices effectively is to prepare for the situations and conversations youre likely to encounter with the salesperson and finance manager. Feel free to print off this cheat sheet and bring it with you! Without further ado, heres how an informed, prepared car buyer can expertly negotiate.
Salesperson: What do you want your monthly payment to be?
You: Im not concerned with the monthly payment, I am only focused on the total out-the-door price.
Salesperson: So youre paying cash?
You: I havent determined exactly how I plan to pay for it. I am only concerned about the total out-the-door price.
Salesperson: So you have a monthly budget in mind?
You: I have a total out-the-door price in mind, so I would only like to discuss that at the present time.
Salesperson: OK, how much cash will you be putting down?
You: I havent decided that yet and I wont until we establish an acceptable total out-the-door price.
Salesperson: What are going to do with the car that drove here, will you be trading it?
You: I havent decided yet. We can discuss that as a possibility after we agree to an out-the-door price.
Salesperson: Now that we have agreed to the out-the-door price, what about the car you drove here, will you be trading that in?
You: I might, it depends on whether or not you can match or beat these written offers that I have already received.
New Year Plate Clearance Sales
Dealers keen to unload older stock in December are even more motivated in the New Year. Once Jan/Feb arrives, theyll want to shift as much previous-year stock as possible. This is called plate clearance because it relates to the date stamped on the vehicles build plate.
Plate clearance sales can offer juicy discounts, especially as March draws closer and those older cars take up showroom space reserved for new vehicles.
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