Cars are the second largest purchase most of us ever make, and unlike real estate, many of us repeat the process every few years. This is why knowing how to negotiate a lower price on a new or used car can save you a lot of money over your life. Here are a few tips on how to negotiate used car prices with any seller.
Know What You Can Afford Don’t make the mistake of committing to a car purchase until you know what you can afford. Know how much cash you have on hand. Then subtract from that the sales tax, the licensing fees, the registration and any other costs you’ll have to pay out of pocket. Then give yourself margin, so that you have money to take the car to a mechanic for inspection and make any minor repairs. The remaining balance is your upper ceiling. If you know what number you can’t go above, you’ll negotiate hard to stay below it.
What if you’re financing the vehicle? Don’t make the mistake of basing a car purchase on a monthly payment. Too many people buy more car than they can afford, thinking they can afford it, and then have to stretch out the loan term to keep the monthly payment low. Then they get into trouble when they realize they have to pay for gas and insurance on top of that. Understand what the total cost of ownership is and ensure that the car price is less than that. If the car is too expensive, find another car.
Know What the Car Is Worth This is where internet enabled cell phones are a lifesaver. Do a search for the market value for a used car while you’re standing in the lot at EchoPark Automotive. Enter the model, year, and mileage of the vehicle to get a rough estimate of what it is worth. More advanced calculators allow you to enter a rating for its condition, so that it subtracts a few hundred dollars for the bad paint job and several thousand for structural damage from a wreck.
The next step is researching the history of that particular vehicle based on its VIN. If the car has been declared salvaged or otherwise ruined, don’t buy it. You can’t resell it, and you may not be able to insure it.
Be Willing to Walk Away You can only really negotiate for a car if you’re willing to walk away. Be willing to end the discussion and the potential deal if they won’t lower their price or refuse to meet reasonable demands such as a request to take it to a mechanic.
Be Willing to Haggle Haggling or negotiating is a lost art in the West. We’re used to walking into a store and paying the list price. Too many people think it is rude or morally wrong to negotiate used car prices. For example, they might ask about discounts and then accept the first slightly lower price. Instead, recognize that this is a game you can play. You can ask for a lower price or that the person throws in related gear like a bike rack or good tire iron.
