Tip 3: Get a Sense of the Seller
Tip 3: Get a Sense of the Seller
Now you’re finally ready to talk to the seller!
If you’re looking at a car on a dealership lot, try to time things so this step occurs around 7-10 days from the end of the month. Salespeople generally have monthly quotas to achieve, so may be more motivated to sell near the end of the month. However, don’t leave it too late, since you want time for some back and forth, as well as the vehicle inspection and any work you want done before buying the car. (It’s always easier to get things done before buying than after!)
So, at this point you know:
- The objective value of the car you’re interested in from comparisons with other listings, KBB pricing, and eBay completed listings.
- Its value to you, based on your budget and alternative vehicles you’ve looked at. And you have some idea of its value to the seller, based on their asking price. However, the asking price just represents what the seller hopes to get for the car (plus likely some room for bargaining). That amount could be very different from the amount they are actually willing to sell the car for.
Now you want to try to get an idea of how much the seller is willing to sell the car for, so you know how much to offer. Obviously you want to offer less than the asking price, and generally less than you are ultimately willing to pay, but not so little that the seller is offended or writes you off as not being serious.
So, how do you figure out what the seller really wants for the car?
One technique is simply to ask them. This can work well with private sellers. Something like:
- “How much would it take, in cash, for you to sell today?”
Private sellers are generally selling for a reason: they’re leaving the country, or they need the money for some reason, or they’ve already bought another car and it’s just costing them to keep this one insured. Regardless, your ‘offer’ may sound quite attractive, and they might come back with a number much lower than the asking price. Even if they don’t, their answer will probably tell you something.
Back in my college days I had to sell my car to move across country for school. I was asking $6500 and eventually sold for $2200 the day before I left. The buyer was smart enough to ask a question like this, and I honestly told him to make me an offer and if I didn’t get a better one by the end of the day the car was his. You probably won’t get that lucky, but it doesn’t hurt to ask!
Here’s another question that works well for both private sellers and dealers:
- “Are you flexible at all on the price?”
Of course they are. Almost everyone selling a car is at least somewhat flexible on the price. But their answer may tell you how flexible. I was looking at a car a while back with a sticker price of $29,900. The dealer’s answer to that question was something like “Sure, I mean, nobody pays sticker price. Of course, if you offer me $25,000 I would have to say ‘Sorry.’”.
That’s a ton of valuable information! Very different than if he’d used $29,000 or $22,000 in his example. From his answer, I’m guessing he would sell the car fairly quickly for say $28,000, would likely get down to the $26,000-27,000 range, and if I were willing to wait him out long enough, might even eventually sell for close to $25,000, but probably not less. Those are all guesses of course, but they help narrow things down. (It’s also important to remember that this is just an example; certainly not every car will be priced thousands of dollars above what the seller is willing to accept! That’s why we go through this process to try and get a sense of how much room they have to negotiate.)
If you get the sense that the seller is looking for much more than you’re willing to pay, don’t give up completely. You will probably have to move on with your car search, but there’s no harm letting the seller know where you’re at.
In the example above, say my budget was $24,000. I could say something like “Sorry. $24k is the most I can afford. I totally understand you’re looking for more, so I appreciate your time. If anything changes in the future, please feel free to give me a call.” You might not hear anything. But quite possibly, especially if the seller is a car dealer, you’ll hear back in a week or so with an offer of, say, $27,500. They probably won’t get down to the price you’re looking for, but anything’s possible—if the car still hasn’t sold a couple months down the road, you might get your $24k, or close to it.
Now, if it does look like you’re close to a deal, it’s time to get the Vehicle History Report and have the car inspected. So read on…