Negotiating the purchase of a used car

Trading in at the dealer is a mistake for most. Retail is the highest price you will pay for the vehicle at a dealership. As you can see, they pay you the least for the trade-in and charge the most for the vehicle on the retail side; herein lies the spread and it gives you an idea of how much you can negotiate.
You as a consumer can pretty much be rest assured that the dealer paid less than or the wholesale price. You need not be armed with much more here as a basis for your negotiations. HOWEVER — the options in the car, its repair and collision history and the mileage of the vehicle will affect the price either positively or negatively. Many factors play into the actual price such as: demand, the local economy and the dealer’s cash position.

The Asking Price: Most people do not realise that the asking price of a vehicle is just that — THE ASKING PRICE. There are many ways to negotiate the best price of your new or used car purchase. If you are like most people, this can be a difficult procedure to carry out.
To an experienced salesperson, your first reaction when viewing the vehicle for the first time, can usually determine how negotiable the price of the vehicle will be.
During the viewing of the vehicle, do not play into the seller’s hands by letting them know how much you like the vehicle. For example; colour, options or vehicle condition.
Before test driving the vehicle, you should test every option available, both inside and outside the vehicle. Point out all faults and non working components found at this time for negotiating the price later on.

If at this time you have found nothing wrong with the vehicle, it is up to you to decide whether or not you like all of the driver comforts of the vehicle. Now it is time for you to test drive the vehicle. During the test drive, be sure to point out all noises and obvious problems with the vehicle whether small or large.
Make sure to question everything you are unsure of. There are no stupid questions or comments at this time.

The Offer: Now it is time to negotiate the selling price. Even if you want the vehicle very much, still do not let the seller know this. Act like you have researched the average price of the vehicle and always come in with a price at least $1 000-$2 000 or 20 percent less than the asking price.
Be ready to commit to the deal if a reasonable price is agreed upon. Cash is a great motivator in closing the deal. In most cases a person who is looking to sell a vehicle will not turn down a reasonable cash offer. If

the seller turns down your offer, either make a new offer or wait for a counter offer.
After you make your initial offer, do not speak again until he/she answers. Do not try and justify your lower answer, simply keep quiet and wait in silence until he/she speaks. This may be the most awkward silence you have experienced to date, but it works. For example, if you have looked through local papers and found that a particular car is worth $5 000, you do not want to pay more than that unless the car is in exceptional condition. If the asking price of the vehicle you are looking at is $5 000, your offer on the vehicle should be at least $1 000-$1 500 less than that.

If the person does not accept, they will usually counter offer with a price in between the asking price and your offer. Experienced sellers usually advertise the asking price of the vehicle a few hundred dollars higher than what they are willing to accept for the vehicle, to leave room for negotiating with educated consumers. If you, the consumer, are not aware of the fact that negotiating is an option, you will be paying too much for your new or used vehicle.

This is called leaving money on the table. Essentially, by failing to make an offer, you have left money on the table. That money is now in the seller’s pocket!
LOW BALL OFFERS: We’ve all been offended by low-ball offers before and really we shouldn’t be. Someone will always try to take advantage of the situation and when dealing with used car dealers specifically, I see no reason not to. If the car is priced at $10 500, you know he paid a few thousand less, so why not offer $8 000, cash, right now.

Take it or leave it. Believe me, the dealer has made low ball offers so he will likely take it in stride and try to meet you somewhere in the middle.
If you know what you are willing to pay, be ready for his counter-offer. You can hold fast at your offer, or move toward middle ground. Depends on how much you want the car. There is always another car. Let me repeat that: There is always another car!

Before making your final purchase, there is a word to the wise: check out what the insurance rates on that car or truck will be. I cannot tell you how many times a person would call saying: “I’d like an insurance quote on a car AFTER they had already signed the purchase agreement only to find out that it was triple what they thought. Prior to negotiating on your vehicle at all, it would pay to know the current market value of the car or truck you plan to see.