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Can I Negotiate the Price with a Used Car Dealer


Published October 2, 2018

The answer, in short, is yes. What you need to be aware of, though, is that unlike new cars, used cars donít provide the dealer with below the line, off the sticker discounts and incentives based on reaching sales goals. When buying a used car itís a simple equation of what it cost the dealer to acquire the vehicle, what costs were incurred in making the vehicle fit for sale, and how much the dealer needs to make to keep the lights on and the doors open. Then the dealer adds a buffer to that amount, checking the various pricing tools available so that they have some wiggle room if they have to negotiate.
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New Car Dealer versus Used Car Dealer

Take another look at the equation above. Assuming that the New Car Dealer and the Used Car Dealer both acquired the same make, model, and year, their costs at this point should be fairly equal. The New Car Dealer will likely have higher costs in preparing the vehicle, as they use their own repair facility, and the cost of keeping the lights on and the doors open is higher than the typical Used Car Dealer. That means that itís likely that theyíll either price the used car higher, making any negotiation begin at a higher price or be willing to accept a lower margin, which then results in an inability to haggle over the price.

Understanding the Used Car Dealer

First, you need to understand the Used Car Dealer. Theyíre local residents who operate a small business in your community, just like your dry cleaner or insurance agent. First, the dollars that they make stay in the community. Youíd be surprised how many car dealerships that you think are locally-owned have been sold off to large conglomerates based hundred or even thousands of miles away from your community. And as a member of the community, the Used Car Dealer understands the value of good, strong relationships with the other members of the community. Theyíre not looking for a sale thatís not in the best interest of the buyer, because as a local business, the Used Car Dealer relies on word of mouth.

How to Negotiate with a Used Car Dealer

Imagine the Dealerís Viewpoint: If they donít know you personally, youíre a complete unknown to them. Are you just there to kick tires or are you a serious buyer? The faster you can establish your seriousness the quicker you can move into the negotiation stage, as dealers rarely haggle with tire kickers. Remember too that the dealer has to make some money on the deal as well.

Be prepared: Do your homework by getting online and researching the car in which you are interested. Visit several sites to collect data on the average selling price in your area. Not only will this back up your offer but it demonstrates that youíre a serious buyer with real intentions to purchase a car.

Ask for Backup: The Used Car Dealer should be willing to share with you the initial inspection report from when the car arrived at the dealership and what work has been done to make it not just road-worthy but as solid and reliable as possible. They should also be willing to share with you the vehicleís history, through an online service or another source, so you know if the car has been previously damaged, if there are open recalls, or there are any issues as to ownership.

The Trade-In: Itís a misconception that Used Car Dealers wonít accept trade-ins. But be serious about what youíre offering. If the Used Car Dealerís lot is packed with cars from Audi, Mercedes-Benz, and BMW, itís unlikely that the dealer would be interested in your 10-year-old Nissan Altima. In this case, youíre better off selling the car as a private party as all the Used Car Dealer can offer you is what they could expect to collect if they take the car to auction. Most likely you can do much better than that in a private sale.

Financing: The Used Car Dealer can be a great source for financing options, as they work with many lenders. This is a particular advantage to those buyers who might be credit challenged. But before you walk into the dealership, do a little research first. Contact your bank, the local credit union, or even online lenders and see what sort of rate you qualify for. Walking into the dealership pre-qualified gives you negotiating power, as youíve demonstrated that you can come up with the money. If the dealership offers you a better deal, youíre free to take it and decline the offer from the other lenders.

If you do your homework up front, walk in with pre-approved financing, and understand that the Used Car Dealer can drop the price only so far, you can come out with a win-win deal with very little negotiating involved.
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