Getting the Best Price

The most difficult and intimidating part of buying a used car is negotiating the price. Most of us rarely bargain for the things we buy. So, it's no surprise that we feel uncomfortable negotiating, especially for an item whose value is so difficult to evaluate. This section will acquaint you with the process of negotiating and provide some tips for success. We will also provide some advice on warranties and service contracts.

First of all, the single most important thing you can do to negotiate a good price is to prepare yourself psychologically to get up and walk out. Always remember that you carry the highest trump card: the 180-degree turn. If you are always prepared to walk out, you'll always maintain the upper hand in your negotiation.

Another important factor in successful negotiating is the attitude you bring to the process. Try to remain unemotional, detached, and deal in a straightforward manner. You should never exhibit a strong desire for the car. On the other hand, you should not be belligerent and exhibit an attitude that indicates you don't think the car is worth very much.

If you are bargaining with a professional, there will be times when you are waiting for him or her to respond. Professional salespeople often use silence to intimidate a buyer. Don't be intimidated. And don't let long periods of time in which the salesman is "talking with the sales manager" about your deal make you uncomfortable. That is simply a tactic to wear you down, make you nervous, and make you feel like you just want to "get this thing over with." Try not to be nervous. Instead, do something that indicates you are serious about looking other places. Bring the classified section of the newspaper with you and begin circling other cars that you want to check out. Or review your notes on the other cars that you've seen. Also, you should always give the salesperson a time limit. By sending the message that you have other options, you'll increase your bargaining power.

Here are some additional negotiating tips to help you to get the best price on a used car:

Find out how much the car is worth.

You really can't begin to negotiate until you've determined the car's actual value. Like any other commodity, a used car will have a wholesale and a retail value; you need to determine both. The value of a car can be found in two basic ways. First, consult the N.A.D.A. Official Used Car Guide for the value of the car and the options that come with it. The range between the wholesale and retail value of the car is your bargaining range. And second, review the classified section in a large newspaper and see what people are asking for their cars. Prices in the classified section should be somewhere between the wholesale and retail values printed in the N.A.D.A. book.

Road test first

Never begin negotiating until you have road tested the car and checked it out mechanically.

Determine your maximum price

Before you begin negotiating, determine the most you would pay for the car. For most cars, this should be below the asking price.

Use a notebook

Keep a notebook with you and take notes. Don't hesitate to refer to notes on other cars while the seller is telling you about the current car under consideration. These notes will help you refresh your memory and indicate to the seller that you have other options.

Touch and comment

Use the same technique that new car dealers do when they inspect your trade-in. While you review the car, visibly point out, either to yourself or to a partner, the various problems that you note. An exaggerated touch of some loose parts, or running your hand along body damage can put the seller in a defensive position. In addition to noting the problems audibly, write them down.

Start low

When you've determined that you like the car, your first offer should be 20 percent below the most you would pay for the car.

Prepare to counter

Most of the time (and nearly every time if you're dealing with a used car dealer), your first offer will not be accepted and the seller will make a counteroffer. Your response, as a rule of thumb, should split the difference between your first offer and the most you're willing to pay for the car (not the counteroffer).

Take a second look

If the negotiation gets bogged down and you are not getting much movement toward your price, ask to take another look at the car. This indicates to the seller that you may have some second thoughts, and the seller may fear that you might see a problem you hadn't noticed the first time around.

The final offer

If the seller's second counteroffer is below the most you're willing to pay for the car, consider accepting the offer. If it is not, your third offer (which should be your final offer) should be close to what you would be willing to pay for the car. At this point, you should make it very clear that you honestly believe you're offering a fair price and that your last offer is final.

Be ready to walk

You must be prepared to walk away if your third and final offer is not accepted. You'll be surprised at how many times you are called back. Remember, if you've determined the fair value of the car and it's not offered, you can probably find a better deal elsewhere.

Don't forget that there are items other than price to negotiate. The car may need repairs or you may want more time on the warranty. Remember, if the seller agrees to any of these extras, make sure you get them in writing.

TIP: Negotiating a Shortcut

Some people get a thrill out of negotiating and will carry the process out to four, five, or even six counteroffers. Most of us, however, could do without the process altogether. One technique that you can try, especially if you've found three or four cars that you really like, involves no bargaining at all. It goes like this: After you have carefully determined a fair value for each of the cars that you are interested in, go to the seller(s) and state up front that you are only going to make one offer for the car. Be honest; simply say that you don't like negotiating and that you have determined what you believe is a very fair price for the car. Make your offer, and be prepared to walk away and not listen to a counteroffer. If you have second thoughts later on, you can always call back with another offer. However, if your price is fair and your approach is reasonable, there's a good chance that the seller will respect your seriousness and give you the car at the price you offered.

from The Car Book 1998 by Jack Gillis