Set A Target Value For Your Trade
The other bullet in your money gun is your current car. If youve got a vehicle that youre getting rid of, you have a number of alternatives to consider. The first step would be to determine what your vehicle is worth. You can obtain an estimate via online valuation sites according to your location, the vehicles general condition and the number of miles on the odometer.
You can obtain a more accurate assessment by checking its Carfax History-Based Value . These free estimates are specific to a models vehicle identification number and are based on a wider set of variables than most websites use when looking up a VIN. Carfax History-Based Value includes the number of owners, vehicle use , open recalls, service records, accident history and registration history.
You can usually get the most money by selling the car yourself, but thats a time-consuming process. Though youll be offered far less for it, a far easier way is to trade it in when you buy a new vehicle and use the proceeds as all or part of your down payment.
Another alternative is to offer it directly to the used-car department of a new-car dealership, particularly one that sells the same brand of vehicle as the one youre getting rid of. At the least, you can use a bona fide offer from a new or used car dealer as a negotiating tool later, should you decide to trade the car in as part of the new-vehicle transaction.
How Much Is A Used Car
When negotiating prices on used cars, it’s helpful to know how much they typically sell for. On average, the typical used vehicle sold for $21,558 in 2020. Prices for used vehicles and new cars rose during 2020 thanks in part to a wave of consumer spending triggered by the release of economic impact payments. Decreased supply of used vehicles paired with more consumers having ready cash to spend in the form of stimulus checks helped raise used car prices year over year.
In terms of how much should you pay for a used car, that depends entirely on your budget. If you’re paying cash for a used vehicle, then the amount you have on hand will likely determine how much you can spend. If you’re planning to get an auto loan, then you may have a larger used car buying budget to work with. Remember to check the best car loan rates to compare financing options.
When Should You Tell A Dealer Youre Paying Cash
For this reason, most salesman will ask you upfront if you will be financing or paying cash. NEVER tell them youre paying cash! When asked, just respond by saying probably. If they keep hounding you, tell them youre interested in financing but that you want to agree on the price of the car first.
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Use Car Condition As Leverage
Take time to check the condition of the car both inside and out, looking for general wear and tear and for any signs of damage. After all, you can use the vehicles condition as a bargaining tool to get a better deal. If you spot:
- The general condition is worn or poorly kept
- Any dents, scratches, or signs of damage
- An incomplete service history or MOT
- Damage to the upholstery
- Any technical faults
Then you should use that information to do a deal. This is an effective method on how to negotiate used car price.
Negotiating A Car Price: Faq
How much should you offer when negotiating a car price?
If youve researched the vehicle and know its fair value, start with a lower price. This gives the dealer room to negotiate a counteroffer. Just decide ahead of time how high you are willing to go to avoid paying more than what you can afford and be willing to walk away.
How do I negotiate a car price when paying cash?
Wait to share how you plan to pay for the car after negotiating the price. Car salespeople make money when you finance your vehicle. If they know you plan to pay cash, the salesperson may be less willing to negotiate the purchase price of your car.
How can I get the best deal on a new car?
Before buying a new car, check out car manufacturers special offers and incentives. You may find that some makers offer better deals than others. Rebates and 0% APR financing offers can reduce your total cost to own.
How do I negotiate a used car price?
Whether you are negotiating the price of a new or used car, the process is relatively the same. Offer a lower price than its current value and negotiate up to the highest price you are willing to pay.
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Determine Your Budget And Financing Options
The first thing to consider when buying a new car or used car is figuring out what fits in your budget. There are many factors to consider for the car you want to buy and how you’re going to pay for it but they all stem from “What can I afford?”
If you are purchasing a car you are likely going to be buying it with cash or financing it with an auto loan. Determining your budget for the car price depends on this decision.
If you are going to buy a car with cash make sure that it will not deplete your savings completely. For example, if you want to buy a $20K car in cash and have exactly $20K in savings, you may want to reconsider using all of your cash for the car purchase and either finance part of it or lower your budget for the car. It’s always good to have a sufficient amount of savings available for a rainy day.
If you are planning on financing the car, make sure you understand how much you can afford to pay in monthly payments. Ideally you want to keep your debt-to-income ratio as low as possible for your financial health. If the monthly payments fit in with your monthly budget and you are not overextended, that will help you determine the car price you should be looking for.
Lastly, don’t forget to account for the costs associated with vehicle ownership such as car insurance, gas, title fees, sales tax, etc. They may seem manageable independently, but together they can add up significantly.
Negotiating For Used Vs New Cars
Regardless of whether a car is new or previously owned, there is one principle that applies to both situations: Successfully negotiating down the purchase price can save you a lot of money.
The main difference will be how much you can negotiate off the retail price:
- New cars. It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.
- Used cards. You tend to have more wiggle room with used cars. Depending on how much information you already have about the cars value and condition, you can start by requesting a larger price discount and then negotiate from there.
Either way, it is essential to shop around and be prepared to walk away if you dont get the perfect deal that works for you. The dealer might try to seduce you with the attractiveness of the overall package, but the price of the car is what ultimately matters to your bottom line. If the price is not right, walk away. There will likely be another opportunity to buy a car down the road.
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Ask The Seller To Sweeten The Deal
The best negotiations are win-win deals. The buyer wins, the seller wins . . . everybody wins! Theres a healthy give-and-take involved, and sometimes that goes beyond the price tag. If a seller doesnt want to budge on price, you can get a little creative and ask the seller to throw in something extra so youll agree to pay them what they want.
If you and the seller take the car to a mechanic who finds a problem with the carmaybe it needs new brake pads or the tires are worn downthats something you can use to either negotiate a lower price or sweeten the deal.
You can say, If Im going to give you $10,000 for the car, then I want you to throw in brand-new tires. It doesnt hurt to ask!
Read Up On Negotiation Tips
Salespeople expect you to negotiate your cars price. Dont feel bad asking, but make sure you have a plan.
- Come prepared with price reports or comparison sheets. Check websites like Edmunds and Kelley Blue Book. If you know what a fair price for the car is or that another dealership is offering a better deal, share that information. It will give you a leg up in negotiating.
- Stay firm. Even if you are nervous about asking for a better deal, try not to show it. Be confident and tell them the price you want to pay. Firmness also means confidence in knowing what you deserve. For example, if you know you have good credit, use that to your advantage when discussing dealership financing.
- Be prepared for the long haul. Its not uncommon for the negotiation process to be lengthy. Prepare for an extended stay at the dealership by being well-rested and minimizing any chances of becoming irritable or rushing due to hunger, thirst or other distractions.
- If you cant get to the price you want, dont be afraid to walk away. You may find another car and a better deal elsewhere, or you may go back to the dealership another day and try to negotiate again. Walking away shows you are serious about getting a good deal.
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Get A Detailed Quote Before Haggling
Make sure you know exactly what youre negotiating for when buying a new car. Some salespeople may use whats known as a stacked deal. This is where they include loads of options such as paint protection, floor mats or an extended warranty, before removing these items to drop the price when you start haggling. This allows you to think youre getting a great deal and are an expert negotiator, when in fact its the dealer whos deploying their skills. Our insider tips on the tricks used by car dealers should give further help in this area.
Know What Youre Buying
Obviously, a pristine, low-mileage 2012 Toyota Camry is worth far more than a high-mileage, abused example owned by a heavy smoker with a lead foot. You need to know what youre buying, and the process is quite different when you can see and inspect the car. First, look up the range of values on the specific model youre interested in. A quick online search of resources like Kelley Blue Book or NADAGuides can help you get a realistic picture of its value. After that, its time to go see the car itself.
If buying from a dealer, try to tune out the salespersons happy talk or stories about how the car belonged to a friend and concentrate on what is before you.
Assuming a visual inspection and drive test is possible, start by looking the car over closely. Dont be lulled into security by the quick detailing job most dealers perform to make used inventory sparkle. Check for rust, variations in the paint and panel gaps .
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Many people skip this step, but its vital: Get under the car as far as possible and look for rust and oil leaks. If you can, hire a mobile mechanic service to do an on-site inspection. These services are widely available in major metropolitan areas and be booked via smartphone apps.
Inside the car, look for splits in the upholstery, worn pedals and carpet , dash cracks and working instruments. Make sure the locks, horn and lights all work properly.
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How To Negotiate For A Used Car
Negotiating a lower price on a used car isnt as scary as it seems. Going in with a clear head and the research youve done is half of the battle. If you do your homework, plan for rejections and manage your expectations, the experience will be far smoother. Having a specific number in mind when going into a negotiation could hurt the entire process. Instead, go in with a price range that youre looking to get and base this range off the research youve done. When youre choosing the range, keep in mind that there are many things that can influence the price of a used car, so plan for those.
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Dont Get Attached To One Car
Buying your next car is a significant investment, and the process can bring stress that pulls your emotions. Remember that buying a car is a business transaction. Your goal is to obtain the best price for a vehicle that suits your needs.
In todays market, its more important than ever to avoid becoming attached to a vehicle. Always keep a backup plan if a deal doesnt go through as expected. It isnt always possible, but its best to purchase a car when you dont need it immediately because you have the time and ability to step away from negotiations.
Automobile production slowed during the pandemic, and manufacturing hasnt returned to its previous volume. If you do find the model youre looking for at the dealership, you may have to pay more for it than you initially expected.
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Email Dealerships For New Car Prices
Many buyers will skip the negotiation process altogether and simply email local dealerships and ask for the best price. It sounds simple, but it works. Chris Abouraad, a former dealership owner and current Sales Team Manager at CarGurus.com, says, âFor new car shoppers, sending emails to local dealerships that have the exact desired model and asking for the best price can result in getting the best price.”
He adds, âIt can also lead to an influx of phone calls and emails from dealerships, so one tip is to create a new email address just for this process.â However, Abouraad points out that this tactic rarely works well for used car shoppers, since each car is different.
Used Car Prices Are Crashing: Negotiate At Least 10% Off When Buying A Used Car In 2023
At YAA, empowering you is what drives us. Car buying, selling and ownership are too often accompanied by hassles and headaches. We do our best to save time & money with real advice from auto experts. Right now, the used car market is going through some big changes, and in 2023, buyers have more leverage. Retail prices are softening, and were seeing more YAA members negotiate better and better deals.
If youre in the market to buy a used car your goal should be to get 5-10% off of the dealers advertised price. Still, some brands are more negotiable than others. In this guide well walk you through what has changed in the market, why you have leverage, and how you can get that 10% off.
Lets dive in!
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How To Negotiate The Best Price On A Used Car
Knowledge is your best resource for getting the best deal. Knowing what other cars like the one you are bargaining over sell for is key to talking down a price. But what else? Here’s where your bargaining skills come into play. Simply accepting the dealers sticker price as the lowest price possible is a good way to give yourself a case of buyer’s remorse. Unlike a new car, which may have never been driven past the dealer’s lot, a used car has been on the road and as a result, it has already lost some of its value.
Ready To Find A Dealership
Not every dealership is a no-haggle dealership, but if you end up at one, be prepared to take what you get on the sticker price of your next car, truck, or SUV. Whether you end up at a no-haggle dealer or not, its important to know what you can negotiate on an auto loan to get the deal that works for you. If youre more concerned about your credit getting in the way than having to dicker with a dealer over cost, then we want to help.
At Auto Credit Express, we work with a nationwide network of special finance dealerships that have lenders available to work with people in many types of credit situations. To get matched to a dealer near you, simply fill out our fast, free, no-obligation auto loan request form.
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Always Check The Paperwork
Without exception, you must read over everything before signing any paperwork. Avoid paying any hidden fees by asking questions, and be comfortable with the answers you receive.
This is another time when having a backup person can be helpful. They can raise questions about things the salesperson skimmed over or give reassurance about your decisions.
