How to Negotiate for a Used Car

by Brett on June 16, 2010 · 75 comments

in Cars, Manly Skills

A couple of months ago, I wrote about how to buy a used car. I went through all the steps except for negotiating because it’s a topic deserving of its very own post. A post which I’ll tackle today.

Now to begin, here’s my honest confession: I suck at negotiating.

And it becomes really apparent whenever I negotiate for big purchase items like cars. When Kate and I had to buy a “new” car last year, I stunk it up. It wasn’t for a lack of trying. I was actually excited about the chance to improve my negotiating chops. I felt ready to walk into the dealership and make a deal.

But I punted. When the dealer started putting out numbers, I hemmed and hawed.

Thankfully, Kate is a kickass negotiator. I think it’s her Italian heritage that makes her so good. Maybe the Polish. I don’t know. She’s just good at it. She saw that I was flubbing it up and took over the reins and got us a good deal.

As we drove away in our new car, I’ll admit that my manly ego was bruised. And I could tell Kate was disappointed that I hadn’t been able to take the lead.

I thought, “I’m the man damnit! I should know how to negotiate and not have to let my wife do it.”

Perhaps that’s not too mature. I’m definitely lucky to have a wife who knows how to haggle like an Arabian bazaar merchant. But I’d like to be able to hold my own in this arena as well.

So I used the experience to double down on my efforts to improve my bargaining skills. In an effort to prepare myself for the next time we have to buy a car, I did some research, asked guys I know for their negotiating tips, and went along with a friend who was buying a car. Here’s what I learned along the way.

Knowledge Is Power

In the negotiation game, knowledge is truly power. And in the car buying business, the car salesman usually has the most information. Think about it. When the average buyer walks into the dealer, he’ll immediately divulge to the salesman which car he wants, how much he can pay per month, and which vehicle he’s trading in.

Meanwhile, the salesman gives away no information that would help the buyer. Information like how much the car really cost the dealership, how low they’ll really sell it for, or what’s the real value on the buyer’s trade-in.

Who do you think’s going to get the better deal in this scenario? The dealer, of course. He’s the one with all the information!

Thus, to minimize the amount you pay for a car, you need to do two things: 1) hold your cards close by not telling the dealer exactly what you’re looking for or how much you’re willing to pay and 2) find out as much information about the car you want to buy before you walk into the dealership.

Know How Dealers Make Their Money

When you’re talking with a dealer, it’s important to know that dealers make money three different ways with each customer.

  1. They can make money on the front end of the purchase by selling the car for more than what they paid to buy it.
  2. They can make money on the back end, selling you things like financing, extended warranties, and dealer add-ons like rustproofing.
  3. If the dealer includes trade-in value, they can make money on the difference between what they pay for your car and what they get when they sell it.

Most buyers just focus on #1. However, car dealers might actually make more money on numbers #2 and #3. Thus, when you start negotiating for a used car, take into account things like financing and the trade-in value of your current car when calculating the final price.

How to Negotiate for a Used Car

Buy cars that are at least two years old. Why two years old? Well, they’re new enough that they still look nice and probably don’t have a lot of problems. But more importantly, a new car’s wholesale value drops between 45 and 55 percent of its original sticker price after two years. What a bargain!

Read Consumer Reports annual auto issue. Consumer Reports annual auto issue comes out every April and has a used car section that gives you info like lists of most reliable and least reliable used cars and frequency-of-repair records for recent model years. This information can help you create a list of used cars you want to check out.

Get the big picture value. Once you have a list of possible used cars, get an idea of how much they generally go for by checking the Kelley Blue Book’s Guide to Used Cars and the National Automobile Dealer’s Official Used Car Guide. Don’t just rely on the website versions of these value guides.  The websites won’t give you a car’s wholesale price, just the retail value. The wholesale price is what dealers use to determine how much they should pay for a car. After paying the wholesale price, dealers jack the price up for retail. You want to buy the used car for as close to the wholesale price as possible.

However, don’t take these values too literally.  The values in the Blue Book or Official Used Car Guide don’t reflect the specific situation in your specific market. For example, your town might have a glut of Astro Minivans (Why are you buying an Astro Minivan?), so the price on those will be less than the blue book value. So you’ll need to…

Fine tune your estimate. Find out what the going price is for the cars you want in your area. Check out autotrader.com for prices in your area.

Check the dealerships to see if they have the car. Look on autotrader.com, call around to the dealerships or check their websites to see if they have the used car you want and what they’re asking for it. If they have the car you’re looking for, swing by the car lot and write down the car’s Vehicle Identification Number. You’ll need it later.

CarFax. Get one. CarFax gives a comprehensive report of a vehicle’s history. The report will tell you how many owners the car has had or if it’s had any accidents. That sort of info can help get you a lower price (or steer you away from the car altogether). For example, if the car belonged to a rental fleet, it probably had a bunch of different drivers who had varying degrees of driving skills. Some may have gunned the engine at stoplights and others might have kept their foot on the brake. Bottom line, an old rental car has a lot more wear and tear than a similar car that had only one owner (especially of the old lady variety). Consequently, the old rental car should have a considerably lower price than the one owner car.

To get a CarFax report, just visit CarFax and enter the Vehicle Identification Number. They cost $34.99, so try having the dealer get it for you. “Show me the Carfax” seems to work on tv.

Research financing rates before you walk into the dealer. Ideally, you should pay in cash when buying a used car, but sometimes you just don’t have ten grand lying around to blow in one fell swoop. That’s when auto financing will come in handy and car dealers would love to help you finance your new used car. Remember that dealers make money on the back end by getting you signed up with dealership financing.  A bank actually funds the loan, but the dealer acts as a middleman who gets a commission for signing you up. Consequently, the salesman will pressure you to finance with the dealer.

But here’s the deal. You don’t have to finance your car with the dealer. You can use any bank that you want. To avoid the pressure of inking a car loan at the dealership, shop around for different auto loan rates. Check your bank. When the dealer starts pushing you to the little finance office, you can tell them you’ve already been approved for a car loan and what the interest rate is on that loan.

Of course, the dealership still wants to get that commission from their bank, so they’ll start negotiating auto loan rates with you. You might even get a better deal going with the dealer. Who knows! Just have your financing ready before you step foot on the car lot. You’ll save yourself some money.

Take care of the trade-in. If you’re going to trade-in a car to buy your new used car, do some research on your current car. You want to get as much money as you can on the trade-in. Dealerships will low ball you on the price so they can turn around and sell it for a hefty profit. Ask for the wholesale price or as near to wholesale price as you can. Again, to find the wholesale price on your car, check out Kelly Blue Book or the Official Used Car Guide.

If you don’t want to deal with the dealer, you can always sell the car yourself at retail price. It’s a bigger hassle, but you might get more money that way.

Time to start dealing. Alright. You know the wholesale/retail price and the going price for the car in your area. You also have a few auto loans with competitive rates lined up. It’s time to do business.

Step into the dealership with a set “walking price” fixed in your head. If the dealer refuses to meet this price, you know you’re walking away.

If you’re shopping as a couple, make sure you’re both on the same page and get your “routine” down. When one person gets up to walk, the other gets up too. You don’t want one person hard balling while the other jumps in with, We’ll take it!”

Make an offer. Most dealers build about 20% gross margin into the used car’s asking price. That means they ask for 20% more than what they paid for it. So offer 15% below the asking price. Tell the salesman you know that there’s about a 20% gross margin in the price and that you want him to make a profit, but you’re not going to let him take you to the cleaners.

Then zip your lip. Just stare at the salesman and wait for him to speak. Don’t hem or haw like I did. That just lets the salesman know you’re not confident with your offer.

He’ll probably say stuff like, “But our asking price is lower than the retail price! You’re getting a great deal!”

Tell him, “I don’t care about the retail price. I care about the wholesale price and what you paid for it. The closer we can get to that wholesale price, the more likely I’ll drive out of this lot with this car.”

He may act insulted. He may go to the back to confer with his manager. Remember, he’s going to make you feel like you’re bleeding him dry and he’s doing everything he can to bring the price down. Don’t let guilt or obligation get to you. This is business. You want to buy a car; he wants to sell one. If he doesn’t like your offer, he won’t take it. No harm done.

Point out things that might make the car hard to sell. Dealers want to move the cars off the lot, the faster, the better. Point out how unpopular a standard transmission is or that the car doesn’t even have a CD player or how there’s a big tear in the seat. Say, “That’s going to make the car hard to sell, but I’m willing to drive it off the lot right now for x price.”

If he counters with a higher number, ask for 10% below the asking price. If he counters again, tell him you have an appointment to see the exact same car with another dealer and walk out the door. Before you leave, give him your phone number and tell him to call you if he changes his mind. He’ll probably call. A profit is a profit, no matter how slim it is.

Turn down dealer add-ons. If you’re buying a used car from a dealer, they’re going to try to sell you a bunch of add-ons like rustproofing or detailing. Just say no. If you live in a place that requires a rustproofing, you can probably do it cheaper somewhere else.

Be ready to walk away. In any negotiation, be ready to walk away. Be flexible in your choice and don’t get too attached to one car. Remember, there are plenty more automotive fish in the sea.

Have any more used car negotiation tips? Share them with us in the comments.

{ 75 comments… read them below or add one }

1 Michael June 16, 2010 at 1:24 am

Hey, man, don’t deny your wife the opportunity to shine. It’s never bad to be good at things, but if your spouse is truly excellent at some task, there’s no reason not to let her take the lead on it. My 2c.

2 Brett McKay June 16, 2010 at 1:31 am

I don’t have a problem with Kate taking the lead on things. She’s better at certain things than I am and that’s fine with me. But with this she wanted me to take the lead-she’s good at bargaining but she doesn’t like to do it. She expected me to step up and I punted. And she was really disappointed. And we’re not always going to be together buying things, so it’s something I wanted to get good at myself. Man.

3 Andy June 16, 2010 at 2:26 am

For anyone who’s taken finance in college, dig out that finance calculator and brush up on its use. Pulling that out during any any major purchase requiring financing is “like pulling out a crucifix in front of a vampire” (to quote my finance professor).

A common tactic is to get you to pay more than you want to by tweaking the length of the loan. A finance calculator, properly used, allows you to see your true end cost, which can be quite a shocker. So know not only how much you want to pay each month but what total cost is acceptable to you because this will determine how long you want to finance.

And, most importantly, don’t let your emotions get involved. Be ready to walk if the price isn’t right. Unless you’re buying a collector car you’ll find another one at the right price (assuming your price is reasonable).

4 Erick June 16, 2010 at 2:28 am

Another thing to note, before you waste half a day at the bank like I did, is that most (if not all) banks won’t finance a car with a “branded” title. That is a car that has been totaled and reconstructed, or been in a flood, or something similar that would negatively affect it’s value.

A lot of people will tell you that a branded title car isn’t worth owning, but I got a sweet deal on an ’03 Civic with a reconstructed title. It had less than 50k miles when I bought it and has been smooth sailing for me for the past 15k miles.

Another thing to note is that a branded title generally voids any warranty the car has, which can be a useful fact in your arsenal when talking down a seller of a branded car.

5 O.B. June 16, 2010 at 3:06 am

One tip I heard from one of my law professors: When you’re negotiating – leave your significant other outside, and when the dealer makes his “final offer” tell him that you need to talk with your significant other (who’s standing outside), then, have your significant other do a little show -that he/she is not pleased with the offer. You can then go in and maybe get a bigger discount.

6 Rob June 16, 2010 at 5:30 am

edmunds.com has a lot of great articles about buying a used car as well. There’s a few articles on negotiating and a series about how one staff writer went “undercover” selling cars for a few months, so there’s a lot of information about little tricks salesmen use and how everything works behind the scenes. They have their own pricing system which they claim is more accurate than KBB, but I don’t really know from experience. But there’s a wealth of good information there.

7 Erik June 16, 2010 at 7:07 am

I think one of the toughest things for most people is being able to walk away. Once you get that clear in your head, making the other demands and standing firm on them gets a lot easier. Get it in your mind that you want the car only if you can get it for your price, make sure that when you go talk to the dealer you believe everything you say.

I’ve never bought a used car, but this article reminded me of real estate. Especially in New York City, where shopping for an apartment can be made much better by the ability to make your offer and walk away.

8 Darshan Donni June 16, 2010 at 7:07 am

Herb Cohen puts it very well in his book “You Can Negotiate Anything”. He states there are three factors that affect a negotiation; power, time and information. How you use these factors to your advantage in a negotiation, is what this book is all about. Brett, I think you can use this book to get started ! :)

9 Josh Knowles June 16, 2010 at 7:40 am

Thanks for this article. I suck at deal making too.

Last time my wife and I bought a car we ended up walking away from one dealership. The salseman was just way too pushy. Turns out that dealership pretty much has a reputation for pushing salesmen and questionable service.

A couple weeks later we bought a car from the dealership in my hometown from a salseman I knew. And by that time we had saved up a little more money so we could pay cash for it. I could tell they were a little sad that we didn’t apply for financing.

10 Dave June 16, 2010 at 7:53 am

I remember being surprised to learn that new cars could often be sold below the list price, profitably. Often, the dealer gets a bonus at the end of the year (or quarter) according to how many cars they’ve sold. In some cases, this can be a significant amount and it gives them not only a chance to sell at what is apparently “no profit”, but also it gives them a big incentive to get cars off the lot near the end of the fianncial quarter.

11 Bob Rahm June 16, 2010 at 8:15 am

If you are not willing to walk away from the deal, you’re not negotiating, you’re begging.
Bring Autotrader printouts with you in your negotiating package.

12 Lee June 16, 2010 at 8:57 am

These tips will be very useful to me, within the next year, I think. Unfortunately, when my wife and I had to replace my car last March, we were not in a position to readily refuse any reasonable offers, so I probably spent 1000-2000 more than I really needed to for my car. However, when you have just totaled your work vehicle and HAVE to have a replacement, SOON, your negotiating power is lessened.

That said, my wife and I know that her car now is nearing the point where we should replace it, before we are forced to replace it because a major part fails and it is not worth the money to fix it, and we are then thrust into the same situation. These tips will be very useful in arming myself when going looking for a car for her. Thanks for a great, well written article!

13 Adam June 16, 2010 at 9:02 am

Rob…That article at edmunds is great. I was hoping to suggest that as well.

I always like to negotiate the “lowest out the door price” (including tax, title, tag) and figure out the monthly financing through my bank. Approximatively, an extra $7 in your monthly payment @ 5% is an extra $1000 for the dealer.
I feel like when I’m shopping around for the “out the door price”, I get the best apples to apples comparison instead of dealing with monthly payments, money down, interest rates, etc. at the dealer.

14 Jared June 16, 2010 at 9:12 am

As Rob said, edmunds.com is an excellent resource when buying a used car. They provide both customer (retail) and dealer (wholesale) price guides specific to where you live, which can be very helpful in negotiations.

15 Sean June 16, 2010 at 9:37 am

Create competition (or at least the illusion of competition)

Since I knew I wanted to buy a particular kind of car, I went on the Internet and found all those that were for sale that were 2 or 3 years old. I test drove most of them to make sure they were not obviously broken and to get the dealer’s attention. I also got them to confirm their asking price.

The one I liked was more than I was willing to pay, so I told the dealer that and showed him the printout and business card of the cheapest one. I got some excuses and so forth, so I told him I’d sleep on it. He “went back to his manager” and came up with a great price which I took on the spot.

16 Danno June 16, 2010 at 9:39 am

Bring something to occupy you when the salesman does the “talk to my manager” shtick. The dealer always has cameras & microphones in the negotiating rooms and the sight of you reading a magazine instead of fidgeting can reduce the game-playing.

17 M. R. Jones June 16, 2010 at 9:40 am

i recently helped my girlfriend buy a car a few months back, and i was able to get her a really good deal. we went to a small dealership near D.C., a very small dealership. anyway, they were asking $9900 for an ’06 corolla with 48,000 miles, with a $400 service fee. they told us they would only give $400 for the trade in of her old car. i asked if they could do any better, or throw anything in to sweeten the deal. she said she couldn’t do anything else, but i insisted that she take off the service fee. she agreed, but i still wanted more for the trade in. she said to go across the highway to CarMax, get a trade in quote, and they would match it. little to her surprise, CarMax was willing to give us $2500 for her ’99 Buick Regal with over 100,000 miles. she was shocked and called her boss, who immediately said no to matching CarMax. so, we she took off the service fee ($400) and my girlfriend paid the $9900 cash. we both drove over to CarMax and walked out of there with a check for $2500. when it was all said and done we only paid $7400 for an ’06 toyota. i guess the lesson of this story is to shop around. CarMax gives amazing deals, and their quote is good for one full week.

18 Michael June 16, 2010 at 10:11 am

One of the biggest money makers for the dealer was not in the article, and that is the money made in the shop. Car repairs completed by the dealership are at or near the top in money made for the dealer. This can be used to your advantage when negotiating by simply letting the dealer know you will bring your vehicle there for all service, even if you do not.

Carfax reports will almost always be paid for by the dealer if you demand one. I have bought dozens of vehicles over the years, and I can’t remember a time when they would not provide it.

Dealers make very little money off new car purchases, unless the buyer is stupid enough to pay full retail. I believe the average for most new vehicles is around 200.00 profit for the dealer.

19 Chris Mower June 16, 2010 at 10:14 am

I’m an awesome negotiator… when it comes to buying stuff in any country but America. When it comes to cars, I’m not that great, although I negotiated the dealership down about $4000 on my last car. Not sure if that’s good or not but when it’s a difference of $12,000 or $8,000, I’d much rather pay $8,000.

20 Greg June 16, 2010 at 10:31 am

Two things to remember: 1) the salesman does this every day (several times a day) 2) no two used cares are exactly alike.

If financing, get pre-approved from your bank or credit union. Negotiate the rate with F&I.

Know how much YOU are willing to pay. Let them negotiate up to that.

Most commission and bonus are base on the month. End of the month is the strongest time to buy.

Look for cars that have been on the lot over one month…the longer the better (floor plan, it costs the dealer money to sit on a car). Especially look for cars out of place at the dealer (a Corolla on a Lexus lot).

Always be willing to walk (but leave the door open).

21 Chuck June 16, 2010 at 10:37 am

Instead of KBB, when buying a used car, the best possible source of information is the Black Book. You do have to pay to get access to it, but it provides up to daily value of all used cars based on actual auction final prices – which is where your absolute bottom dollar figure should come from.

I own my own company, so I ordered it that way. You’re supposed to be an “industry-related business” to be able to buy it, so it may do some talking if you don’t have a business under which you can buy it.

blackbookusa.com

22 fdurst June 16, 2010 at 11:35 am

I have to agree with the first Michael’s comment.
As for your justification: “But with this she wanted me to take the lead-she’s good at bargaining but she doesn’t like to do it.”
There are many things in my life that I don’t like to do, but I do a better job than my spouse (the opposite applies as well) and those become my tasks.
I sometimes wonder if this website doesn’t confuse “manliness” with “stereotypical masculine behaviour”, and the intro’s to articles such as this one don’t dispel that thought.
Being able to negotiate is a valuable skill, regardless of motivation; but to be ashamed that your wife had to bail you out? Would you have felt the same way if your brother or best buddy had your back?
Didn’t think so.
fred

23 Jeff June 16, 2010 at 11:36 am

It has been mentioned that a car dealer practices negotiation several times a day, while your average buyer has limited experience in this area. To gain some practice, go out to a few dealerships that carry vehicles you have no intention on buying right now. This is an easy way to remove the emotional component of a good negotiation.

I did this a few times to check out new vehicles I might buy in the next few years as used units. This prepped me for my more immediate need of getting a truck, while getting primary research on the 4 door jeep done. Once I dusted off the skills, it was off to buy the used truck I was after.

24 Scott Sampson June 16, 2010 at 11:54 am

My friends and I have a system that works fairly well. When someone needs a car, they find one they like (test driving, shopping around, etc) then we go to the dealership. The buyer tells the friend the max price he’s willing to pay, then leaves. The friend, who has no emotional attachment, then negotiates. For every $1 he gets under the max price he gets a piece of it (usually $0.25-$0.50).

The last time we did that I was the one doing the negotiation. I told the salesman the deal, “I’m negotiating, I get paid if we make a deal”. He thought it was funny, but was OK with it. We had financing set up so he couldn’t haggle with loans, rates etc and it came down to price+trade in. I got up to leave a few times, but eventually we got to a price. My friend got the car he wanted, and I got a $250 for a few hours work.

25 Brett McKay June 16, 2010 at 11:57 am

Thanks for the great additional tips everyone.

@fdurst-

Actually, sir, I have had the experience where a man-my friend-had to have my back because I flubbed it, and yes, I did indeed feel just as badly as I did when I flubbed it with Kate. If going into something excited with the hope of being competent and then feeling ashamed afterwards when you fail is “stereotypical male behavior” then I guess I’m just a stereotypical male.

26 Leo June 16, 2010 at 12:20 pm

Brett,

As many have noted, the sales people are the pros. I just went through the whole car buying process last Jan, and based on that positive experience, I’ll never negotiate again. Instead, I research what cars are available, and email the dealers I’ll be buying the car in 24 hours, and letting each dealer know the outcome of the purchasing decision. Last Jan, I emailed 8 dealers. 5 responded with ok offers, 1 with a great offer. I called and accepted. by the time I got to the dealership, the price was set.

If you walk in cold, your begging, and the dealership has the advantage. If deciding outside of the dealership, the buyer is in control.

27 Brett McKay June 16, 2010 at 12:42 pm

@Leo-

Thanks for the comment. I had read about a variation on your method where you send faxes to different dealerships and see who responds with the best deal. But I guess email is the better route in this day and age! I had wondered if dealers would actually respond to these messages and it’s cool to know that they do. I would definitely try this next time.

28 Bill June 16, 2010 at 12:46 pm

Hi, Brett. Just wanted to let you know that I appreciate how you’re shaking off misguided commentors like that first guy and fdurst. Most of us readers know exactly what you mean and how it is intended. Regardless, you shouldn’t need to defend yourself on this, but I’m glad that you do.

Love the website. Take care.

29 Thalia June 16, 2010 at 1:07 pm

The salesman will attempt to focus the conversation on the monthly payment. You should completely refuse to discuss the monthly payment unless you have a financial calculator. If you feel comfortable “carpet trading,” you can modify the 4 variables– interest rate, term, purchase price, monthly payment. Don’t let them rush or confuse you. Absolutely focus on the purchase price of the car, if possible don’t muddy the water with a trade-in. Read this article from Consumerist: http://consumerist.com/2010/03/beat-the-four-square-dealership-ripoff.html

In regards to negotiation, you need to keep your feelings detached. Imagine the negotiation is a cerebral game, and you can walk away without injury– if you don’t get this car, you’ll get another one. Courtesy and implacable will, as you defend your family and your hard-earned money.

30 22rifle June 16, 2010 at 1:35 pm

I am a salesman. Not car, but I do sell used items with an average ticket of over $3,000.) Very few people know how to negotiate well.

What my cost is does not matter. The extra profit I make on this one because my cost is low balances out the loss I took on the last one. What matters is whether the value I can provide is good enough for you to exchange your item of value (money) for it.

Want a lower price? What do I get in exchange? A sale? That’s usually not enough. A promise you will send people in? Lies. Never happened yet. (Plenty of referrals here, but never from a promise used as a bargaining chip.)

Oh, and don’t come try to get a lower price by telling me I am too high and am stupid for asking the prices I ask. Or otherwise abusing me verbally. Or getting angry at the price I quote. You just erased all chances you will get a better deal. Period.

What works here? Be respectful. Try to find the spot that works for both of us. Seek a win-win instead of trying to beat me down. Come in with that approach and you might be surprised what can be worked out. I am still limited by the numbers, but you can bet I will do my very best to make the deal work.

31 YOMorales June 16, 2010 at 1:40 pm

Hello Brett:

This might look like spam, but if you have negotiating issues, go and get a copy of Secrets of Power Negotiating (I’m not affiliated to this, btw):
http://www.amazon.com/Secrets-Power-Negotiating-Roger-Dawson/dp/1564144984

I just bought this book a couple of months ago and wish I had it years before; so many mistakes I could have avoided. The book basically teaches you a lot of behavior and tricks (called gambits) that you can use and that other people will likely use on you. Shortly after reading it, I cataloged a lot of tricks that past companies and people played on me, and also began playing them with good results. Definitely, it should be in any man’s book shelf.

32 Steve Harris June 16, 2010 at 2:07 pm

I am a car salesman, both new and used.

I really appreciated the comment in the article that mentioned letting the dealer know that you understand that they need to make money. There are many times where the customer is not willing for the dealership to make money and I have sent them packing. Any reputable dealership (like mine) won’t try and make a large profit on you if you are willing to allow them to make a small profit on your investment.

I’ve had customers that, after I asked, told me that they feel I should make $1400 profit on my $30,000 investment. I showed them my invoice, showed what I make in “holdback” (the bonus paid to the dealership that has been mentioned previously) and told them about my financing spiff from the bank. I made $1400 profit to the penny and there was no back and forth, no waiting to approve with the manager, and he was enjoying his car in 45 minutes after we started the negotiation.

I guess what I’m saying is, be straight with the salesman if you trust him. I you don’t… leave. There are actually a few of us in the world that sell cars for a living, but aren’t out to rob you. Customers are worse then me most of the time.

33 Joe June 16, 2010 at 2:28 pm

When I was shopping for my new car a few years ago, I found the folks at http:/FfightingChance.com/ very helpful. It runs about $40 to get a full write up on dealer mark ups, hold backs, and options costs. You also get a list of what people have paid recently for the same vehicle, and what they got the options for. Some really powerful negotiation tools are to be had. Of course, its up to you what you do with the information…
I had used them before when shopping for another car. When I was looking for a Mini, their dealerships don’t negotiate, so, when I went to ask the FightingChance guys about it, they called me instead. Didn’t take my money, but told me useful information in getting a deal, and how the dealerships work. You save what their package cost in the final analysis. I’d do it again for any car I’m planning on buying.

34 John June 16, 2010 at 2:35 pm

I lived in Ecuador for about a year and down there every purchase involves haggling with the price. Everyone had different strategies. Most people employed a tactic where they would ask for the price of an item, offer about 50% less and then settle somewhere around 30% off the original offered price. What I found however is that there was a better way. If you know exactly how much the item is worth you can know how low they’ll sell it for and you can start and end there. After a while, I knew what things were worth and didn’t even bother to ask people what their price was, I just told them what I was going to pay. They would usually come back with a counter offer, but I would stick to my original and not move. Most of the time, after two counter offers on their part, they would concede to my original price. If not, i would start to walk away and then they would concede. And they would sometimes try to make you feel bad, but you have to understand no one is going to sell a product and loose money on the deal, so if you know how low they are willing to sell for you can stick to that and both of you make out on the arrangement. But you have to realize, if you move an inch, they’ll take a mile. If you move from your original offer at all, you’ll move more then that by the time you’re done. If you make an offer and they’re still willing to talk to you, its probably a reasonable offer, hold to it.

And its true, knowledge is power. Knowing what the lowest reasonable price is puts worlds of power in your court.

35 Curtis Holomey June 16, 2010 at 2:51 pm

I used to sell cars for a living, and I’m here to sy this is an excellent, well-informed guide! I have a little to add though. I’m Canadian, so things might work a little bit differently, but not by much.

Book value matters very little to you as a customer (from the dealer’s perspective, as it is wholesale guide. Dealers are wholesalers, you are not). Dealers use it as a maximum price purchase guide only, and most of the time they will not pay you black book or above (black book is lower than blue book). This is because they do in fact need to turn around and sell it, because if you’re trading in a vehicle, they are taking a portion of the sale price in the form of a vehicle , which means they have to sell your trade in before receiving full payment for your purchase. Also, remember that banks will not finance vehicles for more than 15% over black book.

The average car sales person moves 10 cars a month. The average comission paid to the salesperson is 15-20% of the gross profit on the deal. Gross profit varies per deal, and salespeople never know how many cars they will sell in a month. If they goet low-balled by 10 customers in a month, they could potentially walk away with only $1,000 for the month (Here in Edmonton, Alberta, that’s just enough for rent in most 1-bedroom apartments). A good amount to pay is $1,000 over dealer cost. It’s a fair price to everyone involved, and looks great on a credit application.

I’d also like to mention the Sales Managers. Salespeople do not have the power to make price adjustments, at least not very much. All the final numbers have to go through their managers. And their managers are hired to make the company the most money. When salespeople try to get their managers to come down in order to make the deal, it can sometimes be like pulling teeth. It’s in the salesperson’s best interests to make you a deal doing anything they can to make it happen, so that they will retain you as a customer for your next purchase.

Salespeople are in it to make money to pay their bills like everyone else. This requires 2 things:
1) They sell the vehicle for more than was paid for it.
2) They well a good number of vehicles.

Somewhere in the balance between making a lot of money on a deal and making more deals for little money lies the balance that good salespeople find. That balance will provide the customer with a fair price, the salesman with a paycheck, and the sales managers a reason to work more easily to keep everyone happy.

Oh, and don’t let them puch you around! They need YOU, not the other way around!

Hope this helped!

36 Bill June 16, 2010 at 6:55 pm

Great article and timely, too, as I’m about to buy a used car. I do have one question that I haven’t been able to get answered, on the here or elsewhere, and maybe someone here has an answer. This will be my first car purchase and have the ability to pay in cash. I know this can’t hurt my negotiating posture, but does it help (outside of not having to pay interest rates)? Or does the salesman only care about the amount he actually gets, regardless if the money comes directly from me or from a bank? If this would help, is it a fact I’d want to keep close to my chest? Thanks again for the article and any answers.

37 fdurst June 16, 2010 at 7:03 pm

“Actually, sir, I have had the experience where a man-my friend-had to have my back because I flubbed it, and yes, I did indeed feel just as badly as I did when I flubbed it with Kate.”
Then why did you not intro your article with that story, instead of succumbing to the stereotyped article you published?
You even recognise your error in the last line of this paragraph here:
“I thought, “I’m the man damnit! I should know how to negotiate and not have to let my wife do it.”

Perhaps that’s not too mature.”

The article would have been better if you claimed embarrassment for letting your buddy down, instead of pulling the “I’m the man” card.
‘Cause manly men aren’t intimidated by a woman who knows what she’s doing. Especially when she’s your wife.
fred

38 JJ June 16, 2010 at 8:56 pm

The hardest part for me is not getting attached and being able to walk away. I’m not someone who can be happy with a bunch of a different cars. I get my heart set on one, usually an unusual one. So I know I can’t really walk away-that the dealer is the only one to have the one I want in the area. So I never feel in a position to negotiate.

39 Fin June 17, 2010 at 12:42 am

All hail, Fred Durst, a man who has never had an immature thought in his life. He shines as a beacon to all mankind. When he’s not doing it all for nookie, I guess.

Brett, I personally really like when you tell personal stories that show that you’re just human like all of us. I know I’ve had moments like yours. It happens. At least to those who haven’t evolved to Fred’s level. Thanks for putting it out there.

40 art June 17, 2010 at 8:19 am

@ Erick: The reason why banks won’t finance salvage cars is usually insurance. In some states, insurers are only required to sell you liability and will not offer collision or comprehensive on a salvage title. That makes the loan a high risk for default, because if the car gets totaled again you don’t have the money to fix it or an asset to be repossessed. My wife and I went through this a few months ago, even though we weren’t planning on financing. We could have saved $1-2k with a salvaged car, but weren’t able to get comprehensive or even personal injury insurance. Personal injury was the deal breaker, since we aren’t in a position to self insure for $100k. In the end we got two identical trade in estimates from different dealers for our old car, and knew what every dealer in the area was asking for the new one. We went in knowing exactly what we were going to pay, and there wasn’t much negotiation.

41 Juice June 17, 2010 at 4:20 pm

“be ready to walk away” That is the ticket in all negotiating. If you don’t get the deal you want, go get it somewhere else. If you have the luxury of time to shop, you will get what you want in time.

42 chriss June 17, 2010 at 5:11 pm

Brett- I’ve always wondered how one’s dress affects car salesman. That is, if I go in wearing a nice suit, are they going to assume I am wealthy and try to hit me for more money, or are they going to treat me with more respect because I look more authoritative (even though any shmo can wear a suit)?

On the other hand, if I go into a dealership casually dressed (jeans and t-shirt), will they assume I’m more middle-class and not try to take advantage of me (as much), or will I lose some respect if I’m buying a higher priced car while wearing jeans and a t-shirt?

I’m in my mid-20′s, and was very frustrated when car salesmen treated me like a kid a few years ago when I was car shopping. After they discovered I would be paying cash for a brand new Acura TSX, they treated me with more respect. I got to wondering how the situation would have been different if I hadn’t have walked into the dealership in shorts and a t-shirt.

Thoughts?

43 Jonathan June 18, 2010 at 9:18 am

@ Bill:

Actually, dealers PREFER if you finance your vehicle, because they are paid percentages and fees by the lenders they use. They make more money if you finance than if you pay cash, so oftentimes they are LESS likely to negotiate the price of the car with you if you’re paying cash. They realize right off the bat that they won’t make any finance income on the transaction, so they’re trying to make up for it in the price of the car.

I actually work for a reputable dealership that doesn’t haggle at all, and I don’t think I could sell cars any other way. It’s a process that leaves the customer at such a disadvantage. Just like Brett said, why would you play poker with somebody if they can see your cards?

But back on topic, I actually sold a Dodge Caliber to a customer a year ago for $10k. He came in and said “I want a Dodge Caliber for $10k, and I’m paying cash.” I showed him one I had available for the price, and he bought it. While we were doing paperwork, he looked at me and said “Thanks for making this so easy.” I responded by telling him that HE made it easy, because he came in with cash and knew which car he wanted. His response floored me.

This man went to FOUR major dealers in the area the night before, and none of them would sell him a car. He told them the EXACT same thing he told me, but they didn’t want to do a cash deal. They wanted to finance, and he wasn’t interested. They all passed up an easy sale because they wanted the finance income. CRAZY.

44 Chuck June 18, 2010 at 11:27 am

@chriss
You know, I think it’s more age than the way you dress. Stereotypes are a mental shortcut, and many people use them in many different ways. I think most folks would think that there aren’t many mid-20s folks who could pay cash for a TSX.

In your case, you’re a younger guy looking at a car that younger guys drive. They probably get lots of younger guys through that want to drive, but have no intention of buying. Dress like you normally would. Wearing a suit may look nice, but when it comes to numbers, what you have on won’t matter as long as you stick to your price and only pay what you want to pay.

It may be tough to be taken seriously at a car dealership when you’re that age, but at least in my case it was true for almost every other “big people” thing, as well.

45 Pota June 18, 2010 at 1:41 pm

On other negotiating tactic that I did not see here, but has been quite successful for me, is to first tell the salesman that I will pay cash. Then ask him if he can drop the price if I finance through him. If he can/will drop the price, just go ahead and take a loan and make sure it is a simple interest loan with no pre-payment penalty. As soon as you get the loan docs, just pay it off. The sales guy gets the sale, dealer gets the loan origination fee from the finance company and the dealer kickback and you get a lower price.

46 JF June 21, 2010 at 3:50 pm

Always, ALWAYS wait until the end of the month. This is perhaps the only time that the incentives of the salesperson and the dealership align. The salesperson wants to sell the car by the end of the month for commission. The manager wants to get rid of the car before the first day of the month because of the way the dealership finances its own lot. They use a system called floorplanning (they don’t actually pay cash out of pocket for the cars on the lot) and the interest is calculated based on end of month, so if they no longer have the car on their books the last day of the month, that’s a cost savings to them. To deny you your asking price, they have to be confident that someone else will buy it in the next month for enough over your price to make financing it for an extra month worth their while. Just note that if you are going to finance using your bank, you will need about a day to close the deal – it’s slower than when you finance at the dealer. If you go in knowing your bank will finance you at X%, it’s rare that the dealer won’t match it. But if they quote you 5%, don’t just jump on it because it sounds like a great deal. You may be a 3% credit risk, and now the dealer gets a bigger commission because they got you to agree to a higher interest rate.

47 Keith Lumry June 22, 2010 at 9:53 am

The best peice of advice I did not see here is never buy from a car lot. Always buy from a private seller.
If you do buy from a car lot, negotiate your best price, indicated you are interested in trading your car but when you are quoted a trade in value, simply refuse to trade your car. Sell your car yourself. Even if you sell for less than you want to you will sell for twice the amount you will get with a trade in. NEVER TRADE YOUR CAR!
Finally, do not fall in love. No matter what kind of car it is ther is another one out there for less money. Always be ready to walk away.

48 M June 24, 2010 at 1:17 am

Does these apply in the Philippines? Or in the US only?

49 James M June 25, 2010 at 1:07 am

The true art to negotiation is not to negotiate. You need to determine the value of your trade and the value of what your buying. Never be in a hurry to buy, use the dealers trick of diminishing the value of your trade on the car your buying from them. Walk around the used car your buying and point out anything that even remotely lowers the value. When your negotiating never give up any personal information and make it known that your “looking” but not ready to buy. Make a ridiculous offer to the salesman and tell him that if he is ready to sell now and sharpen up his pencil that you could be willing to do business but you do not need to. Getting you to commit to buying a car if the salesman can make it work for you is their biggest trick. Never give them any money or commit to buying anything. When they come back with a counter offer that is hugely in their favor just stand up and start walking out the door, that changes everything. Stick to your ridiculus offer but do not lie because they will know instantly that you can’t buy the same car down the street for $3000 less because you would have already bought it. Do not take the car for a test drive because after driving a car that is superior to your trade you will become emotionally attached to it for no reason than it is better than what your driving right now and this will effect your ability to be objective. Car salesmen are dicks so be a dick back but be polite and always hint that you are just hunting around, even though they know your lying and generally you will buy a car within a week, that is no reason to give them any advantage.

50 Sir Lancelot June 25, 2010 at 3:16 am

I agree with the importance of not falling in love with a car, yet, as a car lover, I could never buy a car I’m not in love with, however humble it might be, just like I ciuld never get married with someone I don’t love.

I’m in the process of buying a car I fell in love with and I’m trying to look uninterested as the price is too high, but it’s just the colotr and spec I was looking for and there aren’t many around. I had a first look around trying to pretend I wasn’t very impressed and told the salesman (and owner) the car was too expensive and he immediately cut down the price 900$ to the lower thousand. I told him I might drop by one day with a trusted mechanic. It’s been two weeks since. The car has been re-painted (possible accident?) and the are some imperfections in the paint job, so I’ll try to make him discount the price of a re-paint. I’ll also consider any imperfection sthe mechanic might see to re-negotiate the price. Additionally, as an ace up my sleeve, I have several printouts with the listed used price of the model, which is lower than the asking price. I’ve studied the model thoroughly so I hope I can use my superior knowledge and his need to sell (the car has been advettised for months) to get a good deal.

So basically I’m trying keep a cool head while listening to my heart at the same time. Wish me good luck.

51 Bill Jones June 25, 2010 at 12:40 pm

Try this. Write a card with the vehicle you wish to buy, the price you’ll pay and your name and phone number. Give it to (preferably) the owner or at least the sales manager.

He’ll call.

52 Tom June 25, 2010 at 1:58 pm

The only way to get a great deal on a used car is to buy a car directly from an owner. Why pay a cent to the middleman car dealer. But its not a cent, its more like a few thousand dollars. Buy direct! For example, I bought a totally clean 1995 Dodge Caravan for $4850 with 69,000 miles on it in 2001. I still have it and it runs well at 214,000 miles. Original engine and transmission. Use full synthetic oil; it really helps. You don’t need a warranty on a used car. Have a mechanic check it if you are unsure. Get your own financing from your credit union. The internet and local papers have plenty of ads from people selling their own cars. Also, never trade in your car to a dealer. You can always get more real money by selling directly.

53 Also Tom June 25, 2010 at 5:07 pm

I put in many years selling cars in dealerships, and have never seen cameras, microphones, or or any concerted, organized effort to mislead customers. I’ve seen incompetence, but not sinister plots. The truth is, most dealerships are understaffed, and the good ones are busy enough so that there’s no time to play games. They focus upon turning the inventory and keeping their noses clean to avoid issues and customer service problems. These days, with so much information available via the internet and with cars having become commodities at set prices stabilized via the web, factory dealers need to maintain high customer service scores to make $ through bonus structures that can be extremely lucrative to the ownership.

When shopping for a car, bottom line is:
1. Do your research, know the product you’re buying- (it’s possible to spend more $ on cars & transportation over the course of you life than on your housing, depending upon where you live and especially if you overspend on cars like most folks, yet you’ll spend years preparing to buy a house and spend no effort learning about cars?)

2. Walk in the front door, shake hands and treat folks with respect- with the amount of poor behavior that terrified, ill-prepared customers exhibit, you’d be surprised how far being upfront and nice to your dealership staff will get you.

3. Cut to the chase, and don’t play games. Let me repeat- …..don’t play games!!!. We can smell a gamer a mile off, and will give you no extra consideration. Sure, you may get an extra $100 bucks off of a $10k car, but remember what I said about car’s being commodities today? We all know it, and 90% of the vehicles I sell go out the door within a very small range of variation in pricing. And, very often, the guys who get the worse deals are the ones that think they worked the system. Frankly, I may not want to work too hard to put together a deal if I think there’s a decent chance of you making my life difficult in the coming weeks. I won’t sell you a piece of junk- I don’t have the time to deal with your issues. So, I may be happy to see you walk.

4. Remember, we’re human and dealers work extremely hard, often 60hrs/week. I have two college degrees and a Master’s, and I choose to sell cars. Good money, it can be a lot of fun because most most folks are great to deal with, and I genuinely like people. Even the tough ones, because very often they turn out to be the most fun.

54 Johnny June 25, 2010 at 6:18 pm

As someone who has worked as a Used Car Manager at a franchise dealership, I feel obligated to shed some light on some of the information in the article and comments.

First of all, if you tell a salesman that you know there is a 20% margin on any given used car, he/she will probably laugh. There is an extremely low supply of used vehicles right now. The current demand for used vehicles is relatively high because people are trying to save money and see good value in buying used as the article points out. These factors combined with the seemlessly endless supply of information(pricing, supply, wholesale values, etc.) that the internet provides has resulted in dealer profit margin getting lower and lower every year. Also, most dealers no longer price based on cost unless they have a truly unique vehicle. More and more dealers are moving towards “market based pricing”, using software that gives them information such as similar vehicles being offered by competitors to price their vehicles in line with the market.

I have read multiple comments saying to “always buy from a private seller.” While I have bought cars from private sellers in the past and had good luck with them, I have also appraised MANY trade-ins that had major mechanical issues that the average person would look over. There is a reason that a dealer’s retail price is going to be higher than a private seller’s price on any given vehicle. Most reputable dealers(certainly not ALL dealers!) fully service and detail their trade-ins/auction purchases. They do this for several reasons. One is that most warranty companies will not write a warranty on a car without proof that a 100 point inspection was performed, and basic maintenance services were done. Any dealer I worked for always wanted to present a superior product that made no appologies, thus justifying a higher price than a competitor, let alone a private seller. They don’t want you coming back in 6 months complaining that you need to replace your brake rotors and tires. On that note, dealers do remember how much money they made on your purchase, and if you grinded them down to nothing, don’t expect too much help when your power window stops working a few weeks after you bought your car. Conversely, if they did make a fair profit, most dealers are quick to help out when an unexpected issue comes up soon after your purchase.

At the end of the day, car dealerships are not in business to rip people off, as many consumers perceive. Most of their employees are hardworking people who are just trying to support their families. I’m not saying that there aren’t any dishonest people in the car business! That is where research and word of mouth referrals come in handy when deciding where you want to buy a car. The real good salespeople work almost exclusively off of referrals. The reason for this is that people are much more likely to buy a car(or anything) from someone who they can trust. I know salesmen who have become legitimately good friends with people they first met while selling them a car!

Most of the tips here on how to negotiate are pretty good. My point is that negotiating for the lowest PRICE possible does not always mean that you are getting the best DEAL possible.

55 John Jakobsen June 25, 2010 at 7:41 pm

Reading through all the comments and advice here, I was thinking how I might express my thoughts as a dealer to impart some clarity to the dealmaking process as seen from this side. Also Tom has hit the mark so there is not much more for me to say. I have on many occasions encountered customers who believe that they are entering enemy territory in my store, and make the process a nightmare for both of us. I would much rather have in front of me an informed consumer, who has done their homework and is willing to cut to the chase.
1. Know what you want and what you are willing to pay for it. Kelly’s has been mostly reliable over the years, but recently the used car market has been so strong because of the weak new car market, very often their prices are markedly lower than the actual market. That goes too for your trade. By all means, check KBB.com for your trades value, but also check what dealers are asking for them on Autotrader and cars.com.

2. Financing. Know what you can pay monthly but don’t negotiate on payment no matter how much the salesman tries to steer you there. Check out your credit at annualcreditreport.com (its free once a year by law) Pay the extra for your FICO score so you can shop online for financing rates. Compare the online rates to the dealers. Remember the only things negotiable are price, trade, interest rate and term.

3. It’s been said many times before in this thread, but it’s worth repeating. Don’t be afraid to make a reasonable offer and if it’s not met, walk away. The dealer will usually not let you go if it gives him a reasonable profit. He will usually give you a good counteroffer at least before you go. I know it will be tough, but give it a day and if you don’t hear from him, be prepared to give him a call and accept his counteroffer. Don’t be embarrassed, he will respect you more for giving it some thought and due diligence and giving him a fair price for his merchandise. If it happens to be sold, rest assured that they didn’t make just one of that make and model.

56 Car Jockey June 25, 2010 at 8:15 pm

As a man in the retail automobile business since 1977, I’d like to add a couple of quick points:
John Jakobson is of course, correct. He is a businessman looking to do business. Games are counterproductive. An educated buyer is much easier to make sense with; and a good businessman wants to cut to the chase.

As I looked through the article, I noticed a couple of times that using untruths as a bluff or ploy were suggested. Not good. Also, tearing down the car you’re interested in isn’t helpful. If it truly is a car with limited appeal, the dealer already knows that and will act accordingly.

Now, for the one simple way to get yourself a deal. The closing point is the most valuable in regards to negotiation; but here’s the tip. You don’t have to say that you’re leaving or make it confrontational. You don’t even need any communication skills. Just tuck in your shirt. Now this isn’t 100% effective; but it is with younger salespeople as well as those somewhat lacking in the confidence department. Remember next time… try it… tuck in your shirt. I’m not kidding….

57 J June 26, 2010 at 10:45 am

The past few cars I’ve purchased, I’ve gotten a deal acceptable to me by making it clear that I’m serious about buying and not just shopping.

I get the impression that in this economy, there are plenty of potential buyers that would love to buy but can’t come up with the cash or get financing. I try to live within my means and usually don’t buy more car than I can afford to pay with cash. By letting the dealer know they are not wasting their time and can make a sale that day, they get serious about trying to close the deal.

I’ve used this with both a final price in mind (“I’ll write you a check for $XXXX right now.”) and a general price range (“If we can get together on a price, I will buy this car today.”) with success.

This, of course, ties in with previous comments of knowlege of what the car is worth and the willingness to walk away. Service issues aside, I’ve also had good luck with dealers far enough away (50-90 miles) that they know if I walk out, I’m not making a second trip back that far so they give me their full effort to close.

58 Ryan June 28, 2010 at 10:01 pm

For gods sakes don’t read Consumer Reports. That is the most god awful biased rag of crap to be written on cars… ever. Real men know this, and take this into account.

59 Jack Skysail June 30, 2010 at 3:54 pm

a loan for a USED car???? bank financment for a 5000 bucks car? what a strange idea.
buying such a car is best done whit cash here. u put the amount you are willig to pay on the table, cash on the nail. wheter it is a ferrari or a used opel. you will be suprized how fast the salesman is turning into a polite, customer oriented human beeing.
true, it is not working allways, but when you walk away you will still see the regrett in his face that he need to allow money walk out of his office……..
another tirck is to ask him how many cars he allready sold this week, very politely of course. to be polite, respectfull and do not get personal is the first rule IMHO.

60 Jason July 2, 2010 at 1:38 pm

Pretty good guide, (Im a car dealer), one thing I wanted to add was about the rental cars.

Rental companies make a good chunk of their money selling their fleet cars after they are done with them. It is in their best interest to make sure they are in good shape. In my area anyway (Western Washington) the rentals sell their cars at around 1.5-2 years with miles no more than about 25K. These cars are usually in fine condition and are very well maintained.

61 Andy L. July 18, 2010 at 10:11 am

All the tips are fine, however these are my rock bottom tips:

1. Unless you are a sales professional, do NOT attempt to negotiate at a dealership.
Why? On average, you will not win. Before you step foot on the lot do this:
a. know exactly what you want and how much its worth
b. figure out how much you want to pay for it
c. communicate this information to the dealer
d. if they give a positive reply, visit them. if negative or they ignore you, go elsewhere.
2. Never borrow money for a used car. Never. A real man pays cash for everything except his house.
3. Always get an independent mechanic to inspect the vehicle. Always.
4 Get everything the dealer promises in writing. Everything!
5. Never, under any circumstances, try to negotiate! Dealers negotiate for one reason only. To screw you over!
Experience is my guide.

62 Jeb July 19, 2010 at 4:08 pm

Some great advice my father gave me years ago: Never tell the salesman what you do for a living or get into any substantive small talk. This probably falls under “Then zip your lip.”

63 DrJon July 22, 2010 at 12:39 pm

A few tips to get the absolute best price. As others have alluded to, there are certain times at which it is in the best interest of his business to move cars off his lot. That is to say making a profit is not necessary, and thus handing it over to the buyer, at cost, is within reason. Waiting until the end of the month is one way to hopefully catch them at such desperate times, however I’ve found that nearly all dealership have a salesman scoreboard in the main office (how many cars sold by each salesperson). Walk straight in the main office, look at the board, if its full you move along, if its empty, youre in luck.

Most importantly, in this day, used car salesman are hurting, and its possible to get them to show you their invoice. You’ll know exactly what your working with, and you can come to a mutually beneficial price (the best negotiations/deals end up with both parties happy). Don’t be scared to even offer less than they bought the car for, see where it goes. I recently drove off a lot with a car less than their invoice price with free oil changes and detailing for a year.

Your biggest weapon is walking out the door.

64 Alex Ekkelenkamp July 22, 2010 at 5:16 pm

This is the most important thing I’ve learned in buying used cars (and there have been a lot.)

Don’t have your heart set on THAT vehicle. There will always be another deal you “just can’t pass up.” There will be other cars with all the options you want – often for a better price too.

The key is being patient. If you walk in thinking you’re driving away with that car and are excited about it, you’re much more likely to give in to any pushy salesman… Dealership or private. Be ready to walk away. There will be a better offer.

65 Craig July 24, 2010 at 4:12 pm

minivan

66 Sam August 6, 2010 at 2:09 pm

The best way to buy a used car is to know enough about cars to check out the mechanical condition oneself,and buy from private sellers. Used car dealers have an unsavory reputation for a reason.

67 Driven By Todd August 11, 2010 at 5:57 pm

Man…

I am really surprised that “The Art of Manliness” would have such an Un-Manly approach to a car deal.

All of this talk of research, and how dealers make thier money… just tastless and petty.

Yes I am in the car business but what I know is that men…. real men… get great deals on cars because they treat us… the working man…. like real men.

The grinders that have these sharp pencils and bank rates and all of their un-gentlemanly attitudes get nothing.

If you want to buy a car like a man then you need to buy a car like a gentleman.

You website is great, but your perception of this business is very wrong and your approach is very contridictory to the rest of your publication. Men understand that other men should, and are entitled to make a profit on the transaction and that kindness and genlemanly respect will always get you further than some piece of easily gotten “information”.

You have a great site and quite a nice book, but on this subject you and the commenters are very very wrong.

68 Norman December 27, 2012 at 7:16 pm

I like the post, its informative. I’d also like to add a little bit. I’m a Sales Associate at a Chevy Dealership. We shine in the used department. We sell about 100 Cars a month in our little town. That might not be a lot to some of the big cities but you would need to know the area. We are able to do this largely because of the internet. Another huge factor is our pricing philosophy. A few years ago the owner decided the run of the mill dealership business model just didn’t sit right with him. He felt it was dishonest. The owner switched the dealership to a One Price store. Unlike other dealerships, we don’t raise the prices thousands just so we can talk customers back down to where we really want to be. We spend a lot of time and money researching the market to make sure we can put the best and lowest prices on our vehicles. We don’t just say we do that either. We have tools like RealDeal, VAuto, etc. to prove what we say. We prefer to be upfront and honest about every part of the deal, thats just the best way to do business. That said, we are a CarFax dealer. We have the CarFax for every vehicle ready for our customers so they can see their vehicles history. And its not like we hold it until they buy. If a customer came in just to look and asked for a CarFax, we’d print out a copy, staple it, and from that point it was the customers. Being that we are a one Price store, it doesnt leave much room for profit. That being the case, we are salary paid. I don’t make any money from a car itself. I do look at it as I’m trying to sell anyone a car, I prefer to think I’m helping someone buy a car. As far as financing goes, it is true that we do like the customer to finance through us. Often times if a customer expresses interest in going to their bank I’ll ask a few things. “What kind of rate did your bank tell you? If I can save you some money, can we do the financing here?” We really try to get the best interest rates possible, often times beating a customers own bank. Financing through us does put a few dollars into my pocket but it also keeps a few more in the customers. We don’t recommend the KBB because it is not as accurate as some alternatives. Banks are using NADA. With NADA a customer can get the best idea for what a vehicle is truly worth. I disagree with
“Thus, to minimize the amount you pay for a car, you need to do two things: 1) hold your cards close by not telling the dealer exactly what you’re looking for or how much you’re willing to pay….”
Holding back information hurts the customer more than helps. If I don’t know what to look for, how can I find it?

69 Marcia March 8, 2013 at 4:00 pm

My favorite car buying story is from a friend who lives on Whidbey Island: He knew exactly what he wanted, that the dealer had the vehicle in stock, and exactly what he wanted to pay for it. He took a cashier’s check for that amount and an egg timer, which he set for 20 minutes. Timer went off, he walked out and they chased him when he reached the parking lot. He got the vehicle plus many features added he didn’t bargain for (and didn’t pay for)! Talk about shifting the power!

70 Josh July 7, 2013 at 8:34 am

1) Negotiate on total cost, not monthly cost. Otherwise, things like loan term will confuse the issue. If you’re tight, know what total cost you can afford going in.
2) Tell them up front that you intend to buy a car that day. This motivates the salesman.
3) Shop at a slow time. Again, motivates the salesman if you’re the only one in the shop.
4) Go with your partner (real or fake), and play good cop bad cop. You really want the car, but she’s got the cash in her purse and hates the car. Ask the salesman to help you sell your wife on it.
5) Negotiate on things that you want, and are cheap for the dealer. For example, once you get their final price, call them later, and ask them to throw in snow tires and rims b/c the other shop offered this. My mother successfully did this.

71 jesse December 7, 2013 at 11:58 am

remember when buying a car out of state, you dont pay sales tax at time of purchase and will not be financed, unless previously set up with the financing bank. You can check public local listings for what you will pay, normally around 6% but can get as high as 13% so allow for this in your budget. also, buying cars out of state is a great deal, you can find the car you want and search craigslist in different counties and states where the car is more see and get a better deal. good luck!

72 jesse December 7, 2013 at 12:11 pm

forgot, september is the time for car buying, as they are getting ready for the end of year charts and want as many cars off the docket and lot as soon as possible before they roll over to january.

73 Nathan M. December 7, 2013 at 10:30 pm

I work as a sales consultant for a very reputable Honda dealer in NY state and can share a couple tips that might help you save some cash and give you insight into the car business. An important thing to know is that there’s not one particular dealer that always has the lowest prices and there’s not one particular dealer that always has the highest prices. Every dealer pays the same price for each new car and each car deal is different. Most car buyers use the internet now to purchase cars, which is a great way to research and find reputable dealers, but it may not be the best way to get the lowest price. My sales managers are ALWAYS more willing to drop the price of a car more if a customer is at the dealership instead of trying to shop numbers over email or phone. The dealer wants to see a car drive off the lot and is more likely to drop their price if a person is will to buy from them instead of their competition across town. As far as buying new cars goes, Truecar.com is pretty reliable source to see what you others in your area pay for a car as well as the factory invoice (what the dealer pays for a car) and sticker price. For trade in values, any site like Kelly or Edmunds is a national average which means your car might not be worth their appraised value. Each car is unique, therefore so is its exact value. When trading in a car, a dealer can show you two different ways of valuing your trade. Trade value and trade allowance. The first is what your car is actually worth (or at least what the dealer is going to pay) and the second is a combination of the discount on your new car and what they’ve given for your trade. If you want the simplest numbers, ask for the trade value rather than a trade allowance.
A great way to find a good dealer is to check out reviews online or ask your friends where they have purchased their cars. Most people will be happy to share with you their experience – good or bad. I have noticed that customers play a large part in how their car buying experience goes. Positive people are usually happy with their purchase and negative people are usually unhappy with their purchase. One of the most interesting that I’ve seen while selling cars is that the most happy customers that I ever have are the ones who pay the most for their car. They give great reviews and are eager to send their friends to me, too. Coincidently, the most unhappy people are the ones who pay the least for their cars. They always think they could’ve gotten more of a discount, usually leave poor reviews, and tend to not be repeat customers because they will shop around for the “best” price on their next purchase.

I love my job and getting to help people find a good car that fits their needs. There’s some nice people and not so nice people that walk through the door to buy a car. As long as it’s fair for you as a customer and fair for the dealer, you can make a deal.
Good luck out there and happy buying.

74 KryzR January 1, 2014 at 6:53 pm

At want point in the negotiation should you reveal you may want to trade in your current vehicle. Does doing so up front impact your negotiating “power”? Thanks and thanks to all for the great tips.

75 Jade March 1, 2014 at 2:47 pm

Just in case no one else has mentioned it or seen it, it’s probably better to go ahead and pay for the unlimited carfax checks with your own carfax account. I say this because I’ve seen dealerships selling a car, for example, as a single, private owner car with the carfax to back it up. The problem was, the carfax they proudly displayed only showed records for the state it was currently in. I ran the VIN from my own account and found it had had 2 more owners who’d registered in a different state. Also, “As Is” only means “As Is” if you don’t ask for a warranty. Tell them that’s what’s holding you back. If that isn’t enough, tell them that, if the car is as great as they say, they won’t have a problem backing that up with at least a 3 month powertrain.

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