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Don't settle for a price that may not be fair
Last updated: May 2014
The first rule is, don't fall in love with a car. Cars are commodities, not people. The used-car market is huge, and in every category, there is more than one brand to choose from, and more than one model that should fit your needs. Even if you have your heart set on one specific model, be assured that it's not the only one for sale.
In general, negotiating the price of a used car is less harrowing than when buying a new car. There are fewer opportunities for dealers to add on extra-cost items and other charges. And a private seller is unlikely to have the experience and resources to play hardball negotiation games.
Still, never negotiate under pressure. Salespeople may assure you they won't pressure you but then do it in a subtle way. A common sales tactic is to claim someone else is interested in the same car. Even if it's true, don't feel you have to make a deal immediately; there are always other cars out there.
If you're buying at a dealership, negotiate one thing at a time. First settle on the price for the vehicle you're buying, then discuss your trade-in or financing terms separately. Salespeople often try to get you to focus on your monthly payment. Using it as the focus, the salesperson will lump the whole process together, which gives him or her too much leeway to give you a "good deal" in one area while making up for it in another. This is the first step down a slippery slope of being manipulated with numbers and overpaying for your vehicle.
Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds. Be courteous, but hold to your original figure after receiving any counteroffer.
If you must move your offer up, do it in small increments. If the gap between the two sides is, say, $1,000 or less, move your bid $100 at a time. State clearly when you have reached your last offer, and stick to it. Don't be afraid to say your offer is fair, final, and good for 24 hours only. If the seller won't budge, be prepared to walk away rather than pay more than you know is a fair price.
Used car buying guide
Learn more about choosing a used car, avoiding a lemon, buying and selling a used car, pricing and financing, and more in our used car buying guide.
FAQs
Make a realistic offer, but one that's also bold enough to anchor the negotiation to a lower point. A savings of 5% or so below the market value (not the price they are asking) is a reasonable starting point for negotiations. Another way to look at it is to do about 15% to 25% below the maximum you're willing to pay.
Can I negotiate a lower price on a used car? ›
Many discounts will likely still be available when you're ready. Despite the MSRP sticker price of a car, you can make any offer, and a good salesperson should be willing to consider a reasonable price based on the car's condition.
What is the first thing you should know when negotiating the price of a car? ›
The salesperson will probably begin the discussion by focusing on the vehicle's MSRP (manufacturer's suggested retail price) or on your monthly payment. Don't take that detour. If they start with price, make sure you negotiate from the bottommost price and work up, not down from the MSRP.
What should you always negotiate a car deal on? ›
In most cases, you'll still need to negotiate the value of your trade, the cost of financing and the price of any add-ons. If a car is in high demand, a dealership can charge far more than the sticker price. When demand is lower, you can expect to pay less than the sticker price.
What not to say to a car salesman? ›
5 Things to Never Tell a Car Salesman If You Want the Best Deal
- 'I love this car. ' ...
- 'I'm a doctor at University Hospital. ' ...
- 'I'm looking for monthly payments of no more than $300.' ...
- 'How much will I get for my trade-in?' ...
- 'I'll be paying with cash,' or 'I've already secured financing.'
Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds.
Is it OK to haggle at a car dealership? ›
Can you ask a car dealer to lower the price? Yes, you can negotiate on the price of a car. However, it helps to do your research on the vehicle's fair market value and out-the-door price beforehand so that you know how much room you have to haggle.
Can you lower a no-haggle price? ›
That said, most dealers who advertise no-haggle policies, especially larger ones, have ingrained it into their business model. This means you are usually unable to negotiate the price of a no-haggle vehicle. You may, however, be able to find exceptions at local dealerships with less strict guidelines.
How do you negotiate a lower price on a used item? ›
How to Haggle in 10 Easy Steps
- Always tell the truth. Keep your character intact, people. ...
- Time it right. The end of the day is a great time to get your haggle on. ...
- Ask for a discount. ...
- Use the power of cash. ...
- Use your walk-away power. ...
- Know when to be quiet. ...
- Say, “That's not good enough.” ...
- Let them know your budget.
When you tell a sales rep how much you can pay, they'll move all the numbers around in the deal to fit that payment. That may entail a large down payment and/or very long-term financing. Unscrupulous dealers will also tack on fees and add-ons to bring the payment up to the maximum you said you could pay.
To make sure you get a car priced within your means, follow the 20/4/10 rule. This car-buying rule is based on the size of your down payment, the length of your loan term and the percentage of your income that goes toward transportation costs. If you follow it, budgeting for a car becomes much easier.
What are the main dos and don'ts when buying a car? ›
It'll help you through the dos and don'ts of the dealership experience.
- Do: Research Your Purchase.
- Don't: Go to a Dealership Without Already Having a Financing Offer.
- Do: Talk to Your Insurance Agent Before You Buy.
- Don't: Start the Conversation by Saying You'll Pay Cash.
- Do: Know Your Budget and Credit Score.
You're not supposed to bargain if an item has a price tag, nor should you bargain in a restaurant. Do not haggle for items from local cooperatives as many of them have fixed prices which makes it unsuitable to bargain.
What to say to a car salesman to lower price example? ›
When negotiating, it helps to be able to justify what you're asking for, he adds: “Instead of saying, 'I want to pay this,' try something like: 'I've looked at five or six different cars that are similar to yours in the market. The price range goes from $19,500 to $20,700. I'm comfortable making an offer of $19,100. '”
How to negotiate a 20k car? ›
Easy tips for getting a better price on your next car. The best way to negotiate a car's price is to obtain multiple offers from dealerships and use the lowest offer to either improve on the discount or match the sale price at a location closer to home.
Is 10% down enough for a used car? ›
It's good practice to make a down payment of at least 20% on a new car (10% for used). A larger down payment can also help you nab a better interest rate.
What percentage is a lowball offer on a car? ›
It's normal to offer a bit less than you're willing to go up to if the buyer doesn't say "firm" on the price, but not less than 70-80% or so.
How much of a discount should I get for paying cash for a car? ›
But when a person pays cash for a car, there is no such incentive for the dealership. It's not going to make money from financing and will be less likely to want to give a discount since it doesn't want to lose money on the deal.
How much can you talk a dealer down on a new car? ›
Unfortunately, it isn't an exact science because it changes from car to car and dealer to dealer. However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb.
